Xero has released new data from its Small Spark survey regarding the reasons why and how Australians are starting their own small businesses.
According to the survey, there is only two out of ten or 21 percent of Australian business owners who have received any form of financial help to kick start their businesses. However, the majority, which is 79 percent, chose the solo route.
Moreover, there was 46 percent of self-starters chose to rely on their savings while 43 percent are simply diving in on a shoestring.
“This is an incredible figure — that eight in ten small business owners get started with no outside financial help,” said Managing Director of Xero Australia Trent Innes
“It’s astonishing that they’re able to survive and thrive, and there’s no doubt they are doing it the hard way. This success and determination makes us so proud to help small business owners around the country, and continue to build tools and partnerships that make it easier than ever to turn an idea into a business.”
“This shows that by continuing to work on new ways of funding small businesses, we’ll be able to help ignite this important part of the Australian economy,” Innes added.
The survey also got the experiences and opinions of more than 340 small business owners and was able to gather impressive and significant insights behind on how small businesses launch.
It pointed out that Aussies are fast starters since close to two to five, which is 39 percent, Aussie small business owners started their businesses within a year after having the ‘spark moment’ or the time they first had the idea to launch a business.
On the other hand, more than one of five or 39 percent started their business within a month and 38 percent, who were millennials, started their businesses within a week after their ‘spark moment’ compared to other generations.
Next is that Aussies are doing it within their boss’ time, meaning more than half or 54 percent of business owners started their business while working full time.
In regards to funding, 46 percent of respondents answered that they did not receive any financial help and used their savings, while one in three Aussies took the plunge in the shoestring.
Furthermore, only 11 percent of respondents got a loan from a bank for funding and 8 percent got theirs from family and friends.
After having their own business, 48 percent of respondents revealed that they now work ‘much harder’ than they did before, and almost one in two or 49 percent of respondents would love to back to being an employee.
The Small Spark survey also included a poll of small businesses regarding their business confidence into the New Year and got a mixed outlook.
Near half of the respondents or 49 percent said that they were ‘very’ or ‘extremely confident’ that their businesses will grow in over a year. Also, nearly one in three believed their businesses will remain stagnant.
However, 20 percent or one in five Australian small business respondents are having a negative outlook for the next year. 15 percent believe it will be a ‘tough year ahead’ and 5 percent are saying they will struggle to survive until the New Year.
“I’m incredibly confident that we will grow in the next 12 months. I think it’s very important for any small business owner to understand the drivers that are required for business progression or growth. We’ve spent a large part of 2016 focussed on delivering great results for our clients and business partners, which has set us up to grow in the coming year. I’m looking forward to a very positive 2017,” Will Taweel, Founder, Generation Real said.
Starting a business is a long road, but many Aussies have chosen to create their own. More and more small businesses are entering the industry, thus business brokers victoria should become more resilient and innovative to survive the struggles that may come forward.