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Small business owners admitted to pivotal errors they made when starting and what they wish they did differently, including working with an accountant.
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Over 80% of SME owners have made costly mistakes: Xero
19 July 2023
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Small business platform Xero has released research that revealed the decisive mistakes and learnings SME owners wished they knew when starting, with 83 per cent admitting to making costly errors.
The firm’s Do Better Business research shed light on the challenges faced by small businesses and the critical insights for emerging organisations moving into the next financial year.
Xero Australia country manager Will Buckley said small businesses play a crucial role in the economy, with insights into successful firms important to help those amid the difficult economic climate.
“Small businesses make up more than 97 per cent of all businesses in Australia and form an integral part of our communities,” said Mr Buckley.
“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.”
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Approximately 18 per cent of small business owners labelled hiring challenges, working for free and working with the wrong partners or suppliers as crucial mistakes along with working with family and friends, 12 per cent, as another chief blunder they made.
Almost one-fifth (19 per cent) of small business owners reported they spent every dollar of their personal savings in the early years of running their business as another mistake they made.
In light of their mistakes, small business owners provided insight into what they would have done differently if they were starting up their small business again with almost three-quarters, 73 per cent, stating the implementation of a robust financial management practice as a top priority.
That was followed by building a comprehensive 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.
Xero’s research also found it was tougher for younger generations to get into business ownership with Gen Z more likely to face negativity and discouragement from friends and family about starting their own business venture, 77 per cent, compared to Baby Boomers, 60 per cent.
The firm also found the fear of failure was stronger amongst younger business owners and entrepreneurs with 29 per cent of Millennials blaming a delayed start to their business due to not wanting to fail compared to just 12 per cent of Baby Boomers.
“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,” said Mr Buckley.
“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.”
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