Xero’s latest research sheds light on the challenges that Australian small-business owners face, as well as the common lessons they have learned in their business journey.
The Do Better Business research, which surveyed more than 1000 Australian small-business owners and leaders, found that 83 per cent of them admit to having made costly mistakes, with 22 per cent citing the hiring wrong or inexperienced staff and working for free or at low cost as their most costly business mistakes.
Other mistakes cited include working with the wrong partners, suppliers and investors (18 per cent) and working with family and friends (12 per cent) were other blunders. Additionally, 19 per cent have reported that they spent every dollar of their personal savings in the early years of running their business.
“Small businesses make up more than 97 per cent of all businesses in Australia and form an integral part of our communities,” Will Buckley, Xero Australia Country Manager, said. “We know running a small business can be incredibly rewarding, enabling Australians to pursue their passions or achieve greater flexibility. But, as our research has highlighted, it also comes with its unique set of challenges, which have only been exacerbated by a turbulent economic climate.
“As the new financial year commences, it’s a timely opportunity for business owners to reflect on the year that was and embrace key learnings that will pave the way for future success,” Buckley added.
The report also highlights the biggest lessons small-business owners have learned and believe they should start focusing on, primarily the need to implement strong financial management practices, (73 per cent), followed by building a strong network of industry contacts (63 per cent), working with an accountant or bookkeeper (46 per cent), and asking for help when struggling (46 per cent).
It also notes the reasons driving Australians to business ownership, with a desire to be their own boss as the number one reason for 64 per cent. This was followed by seeking greater flexibility (61 per cent), and wanting to pursue a passion or dream (41 per cent). However, 71 per cent admit to delaying starting their own business, with financial concerns being the number one reason holding them back (35 per cent), followed by a fear of failure (21 per cent). Despite this, 65 per cent of business owners surveyed by Xero say there’s never a perfect time to start a business, but they wish they’d done it sooner.
Included in the report as well are insights on the sacrifices being made by small-business. One in five have shared missed a significant life moment such as the birth of their child, a wedding or birthday in the early years of running their business. And 86 per cent expressed the wish that they could prioritise their personal boundaries more while running their business, especially around their physical and mental health (43 per cent) and spending time with their family, friends or partner (40 per cent).
“Fostering an environment where Australians feel confident to pursue business ownership and are supported throughout their entrepreneurial journey is essential to ensuring a prosperous small-business community and a resilient economy,” Buckley said.
“We hope that by understanding some of the challenges facing small businesses, together with industry and governments, we can provide the right tools and technology to ensure businesses have the best possible chance to thrive this financial year and into the future,” he concluded.
