Economic uncertainty has failed to diminish the dream of business ownership among would-be entrepreneurs, writes Lars Leber, Vice President of Intuit QuickBooks Australia.
As the co-founder of a startup that launched during the Global Financial Crisis, I know what it’s like to feel as though your business is at the mercy of bigger socioeconomic trends. Small business funding was in short supply back then and that made life very difficult.
But Australian small business owners and operators have had more than their fair share of issues to deal with during the past three years. Fires and floods, lockdowns and supply chain issues, rising inflation and interest rate hikes.
And yet despite these significant challenges, we know that small businesses are a resilient bunch and I’m delighted to hear that so many have found a way to thrive during this extended period of adversity. They should be proud of that and allow themselves a moment to celebrate it.
Eight out of 10 Australian small business owners report feeling ‘confident’, ‘optimistic’ or ‘cautiously hopeful’ for 2023.
It’s quite an achievement that almost half (45%) of the 1,000 Australian small business owners surveyed by us (Intuit QuickBooks) reported slow but steady growth during the past three years. Others have admittedly found the going more difficult, with 26% saying they have struggled to make a profit. But now both groups are looking to make their resilience pay off.
Economic uncertainty has also failed to diminish the dream of business ownership among would-be entrepreneurs, whether that’s quitting the day job to follow a passion or spinning up a side hustle to supplement an existing income. Australian Bureau of Statistics data shows more than 305,000 businesses stopped trading in the last financial year, but more than 472,000 opened their doors for the first time. That’s a net increase of 7%.
Great expectations for 2023
Whether they’re seasoned campaigners who have weathered the storm or newly minted entrepreneurs setting up shop for the first time, eight out of 10 Australian small business owners report feeling ‘confident’, ‘optimistic’ or ‘cautiously hopeful’ for 2023.
They told us that they are focused on increasing sales (52 per cent), improving their marketing efforts (47 per cent), improving or expanding their product offering (43 per cent) and growing their customer base (41 per cent).
Only 9 per cent say they are ‘concerned’. The issues most likely to be keeping small business owners awake include maintaining cash flow (47 per cent), the likelihood of a recession (45 per cent), hiring and retaining staff (40 per cent), breaking even (37 per cent) and rising inflation (35 per cent).
The value of digitisation
Our research shows that many small businesses have thrived during the pandemic while others have struggled, and some are feeling confident about the year ahead while others are worried.
But increased digitisation is the single most important strategy, regardless of whether small business owners are seeing a glass half full or a glass half empty for the year ahead. It will go a long way to determining which businesses build on their current strengths, and which are able to turn surviving into thriving in 2023.
That’s because digitisation puts knowledge at your fingertips, meaning you can see what’s happening in your business right now rather than relying on historical reporting. You’ll know how your cash flow is, what costs are coming up this month, and which new products or services are proving to be a hit with customers.
Automating core business processes like finance, human resources and marketing increases the accuracy of reporting, freeing up precious time for business owners to focus on their core business and doing what they love.
Don’t go it alone
As someone who has walked in the shoes of a small business owner, I know how difficult it is to keep on top of finances while managing everything else you need to do in order to be successful. I believe every business owner would benefit from having a trusted advisor on hand to offer support when it’s needed.
And this advisor will be in a better position to help grow your business if you’ve implemented a digital tool like QuickBooks. So use the start of the year to put work with your advisor on putting new practices in place that will set your business up for success.
The past three years have presented Australia’s small business owners with a perfect storm of challenges. Whether your business has thrived during this time or found it more difficult, you will be stronger for the experience. Here’s to a year of success built on the lessons you’ve learned, the right digital tools and the support of a trusted financial adviser.
Lars Leber, Vice President of Intuit QuickBooks Australia