The latest Westpac research looked at the motivations of small to medium enterprise (SME) leaders in starting their respective businesses.
What it found was that 48 per cent are motivated by the desire to be their own boss, followed by flexibility of work hours (36 per cent), identifying a gap in the market (25 per cent), and being inspired by successful entrepreneurs (20 per cent), which was particularly relevant for Gen Zs (at a much higher 48 per cent). Side hustles are also a key motivator, with 19 per cent being driven by another income stream.
The research also found that for 35 per cent of SME leaders, their business was profitable within the first year. However, on average, it took 2.3 years to turn a profit. In the meantime, 63 per cent of SME leaders fund their current business through their own savings, nearly twice as many as those who used a loan from a financial institution In terms of support.
A total of 28 per cent said their family provided the most help when they first started their business, followed by partners, and then mentors. The finding corroborates previous research that one third of start-ups have turned to the ‘bank of mum and dad’ for funding.
While business owners can reap great rewards, the research also took note of the challenges they face. Cashflow was the biggest hurdle surveyed businesses had to overcome in the first two years of establishing a business (27 per cent), in addition to long hours (17 per cent) and operating without making a profit (16 per cent).
Westpac released the report in conjunction with the introduction of their business loan offerings for start-ups and scale-ups, as part of its commitment to support the next generation of business owners who want to be their own boss and contribute towards Australia’s economic growth and innovation.
