Costly Mistakes Made by Over 80% of SME Owners
Xero Research Reveals Costly Mistakes Made by SMEs in Startup Phase
Small business platform Xero conducted research to uncover crucial errors and insights that SME owners wished they knew when starting their ventures. A significant 83% of respondents admitted to making costly mistakes during this period.
The Do Better Business research shed light on the challenges faced by small businesses and highlighted key insights for emerging organizations as they moved into the next financial year.
According to Xero Australia’s country manager, Will Buckley, small businesses play a crucial role in the economy, making up over 97% of all businesses in Australia. However, they also face unique challenges, especially in a turbulent economic climate.
The research revealed that around 18% of small business owners considered hiring challenges, working with the wrong partners or suppliers, and working with family and friends (12%) as crucial mistakes. Additionally, 19% reported spending all of their personal savings in the early years of their businesses.
Reflecting on their mistakes, small business owners shared what they would have done differently if they were starting anew. Approximately 73% emphasized the importance of implementing robust financial management practices, while 63% highlighted the need to build a comprehensive network of industry contacts. Working with an accountant or bookkeeper and seeking help when struggling were also mentioned by almost half (46%) respondents.
The study also revealed that younger generations, particularly Gen Z, faced more negativity and discouragement from friends and family when considering starting their own businesses compared to Baby Boomers. Fear of failure was more prominent among Millennials, with 29% attributing delays in starting their businesses to this fear, compared to just 12% of Baby Boomers.
Xero’s country manager stressed the importance of fostering an environment that supports business ownership and entrepreneurial endeavours, aiming for a prosperous small business community and a resilient economy.
The research findings aim to assist businesses with the right tools and technology to thrive in the current financial year and beyond, with collaboration between industry and governments for a successful business ecosystem.