The combination of sluggish growth, persistently poor productivity, tight labour markets, supply chain challenges, above-target inflation impacting on higher input costs and customer demand, and 13 interest rate rises are taking their toll on small and family businesses.

Over the past year, there's been a 20 per cent increase in queries from small businesses struggling to manage their debts.

Businesses are also becoming increasingly worried about other business they do business with - who might owe them money or worse be on the verge of insolvency.

Requests for help from small businesses concerned that they are owed money by businesses who are insolvent have doubled compared to last quarter. Three-quarters of these were from small businesses in the construction industry.

Corporate insolvencies are at their highest level in nearly a decade and reached record highs throughout the last year in the construction sector. In recent months we've seen some high profile and well-known construction firms call in the liquidators.

It is often not realised that there are more small businesses in the construction sector than any other industry, so it's a terrible truth that when construction falters many small businesses can collapse.

We are also seeing rising insolvencies in industries reliant on discretionary spending such as accommodation and food services.

There is free financial, business know-how and mental health help available and it is important that small business owners take advantage of this before it's too late.

Being able to speak to someone who understands the pressure of running a small business makes a big difference.

Data released by my office shows that 43 per cent of small businesses didn't make a profit in the last full year of reporting. And some three-quarters of self-employed small business owners are earning less than the average total weekly, full-time earnings.

I can't stress enough the importance for a small business to check the credit history of their trade creditors.

Recently there was some controversy about the Tax Office's move to notify credit agencies about 20,000 small businesses with large tax debts.

But if you're doing business with someone who owes the ATO a big sum, wouldn't you want to know? This is a reasonable way of alerting other businesses that if you were to offer trade credit or finance, you might not be paid either. At the very least you should take that into account if you are considering doing business with them and if so, what terms.

Good business pays it taxes, proper employee entitlements and its suppliers in a timely way. Not paying is an unfair advantage over other small businesses who are meeting their obligations. Some businesses think not paying your taxes is a clever cash flow strategy - until they get hit with the penalty interest rate.

It's equally important to get an expert or trusted adviser to look at your business finances - a check-up for the health of your business.

The Small Business Debt Hotline operated by Financial Counselling Australia provides financial counselling support, particularly for small business owners who have loans secured against the family home and are uncertain about their future.

For small and family business owners, their identities are interwoven into their business and the stakes are so much higher than just a job.

Many have invested a lifetime - and put their family home on the line - to build up their business, which amplifies the emotional challenges.

Almost 50 per cent of small business loans are secured by personal assets, such as the family home, and 27 per cent of all personal insolvencies are business related.

As is often the case when family businesses face difficult economic conditions, other family members pitch in - all hands-on deck to save the family home.

But this also means the dining table becomes the board table and that can create great stress.

New Access for Small Business Owners is a free service developed by Beyond Blue that offers one-on-one telehealth sessions with specially trained former small business owner 'coaches' that work with empathy and knowledge to equip small business owners with straight-forward approaches to managing stress and the feeling of being overwhelmed.

It is common for small business owners to be working long hours, feeling isolated, worrying about cash flow and decision-making and experiencing market pressures all of which makes them susceptible to financial and mental distress.

You might be feeling overwhelmed by the big responsibility of running your own business and it might not be playing out the way you had planned. The passion, excitement and special talents and offer you aim to delight customers with is a long way from "the business of running the business".

Few get excited about lodging a Business Activity Statement with the Tax Office or delving into the numbers to find the story they are telling you about the need for potentially tough decisions now.

READ MORE:

Your "numbers" may point to a bit of a wobble in your business and the need to adjust to improve future prospects to best capitalise on your strengths and financial resources. Or should you be considering a dignified dismount while you still have choices based on the trajectory of financials?

An early chat with your trusted adviser if you have one, or an end of financial year business health check and review, might be something to put in place. The Tax Office has produced some really good learning resources that might be useful in supporting your decision-making. smallbusiness.taxsuperandyou.gov.au/

Business know-how and being able to benefit from the wisdom of others can be key to turning an idea into a successful enterprise or turning around a business not firing on all cylinders.

Chances are someone has grappled with the problems you are now facing.

------------------------------------------------