Are you among many Australians with a burning entrepreneurial spirit and a business idea in your back pocket?
If so, you’re not alone. According to a recent study by the business management platform MYOB, 76 per cent of Australians have at least one business concept in mind. However, only 35 per cent of these aspiring entrepreneurs have taken the leap and started their own ventures.
The survey revealed that fear of failure was a significant factor, with 42 per cent of those surveyed having had a business idea that they never brought to life.
This disparity between idea and action highlights the challenges faced by those seeking to turn their business dreams into reality. MYOB’s research sheds light on the need for support and resources to help aspiring entrepreneurs turn their ideas into successful enterprises and highlight the importance of self-confidence and resilience in the entrepreneurial journey.
According to Emma Fawcett, General Manager for SME at MYOB, finance remains the biggest challenge when it comes to starting a business. However, the survey also revealed that self-belief is a critical component to getting a business idea off the ground. It takes courage and determination to overcome the fear of failure and the other obstacles that may arise during the process of starting a business.
“It is exhilarating to think of the untapped potential sitting amongst Australians right now, many of whom are actively thinking about new business ideas and how they might turn this into reality. We want to provide support for every business owner starting out on their business journey or looking for new ways to evolve for the future.
“We want more of these amazing ideas to move from the concept stage to become fully-fledged, successful businesses.”
Despite the barriers and challenges that come with starting a business, the results of the survey also show a positive outlook among Australians. Seven in 10 respondents expressed confidence in their ability to start a business, and an even greater proportion, 83 per cent, believed that they could learn the necessary skills with the right help. This shows a willingness to take on the challenge and a recognition that starting a business can be a process of learning and growth.
When it comes to the support system for entrepreneurs, the survey results indicated that the number one believer in their first business was themselves, with 48 per cent of respondents citing self-belief as a key factor. This was followed by their partner, with 37 per cent of respondents noting that their significant other was their biggest supporter. It’s clear that having a strong network of supporters and belief in oneself is crucial in the journey of starting a business.
However, despite this positive outlook, only 21 per cent of those surveyed agreed that starting a business is easy. This highlights the realities of the challenges and obstacles that entrepreneurs face and the need for resources and support to help them navigate these hurdles.
“There’s no denying that starting a business is a big commitment, and it takes an incredible amount of self-belief, particularly as we navigate current economic headwinds,” Emma adds.
“For many, a business idea is an opportunity to pursue a passion project or the creation of something to help others, but it comes with many other responsibilities such as keeping the books, managing inventory, or tracking sales leads, which is where doubt can creep in.”
Ease of doing business
According to the World Bank’s latest “Doing Business” report, Australia has been ranked as one of the best countries in the world for ease of doing business, with a score of 84.7 out of 100, placing it 13th globally. This score highlights Australia’s favourable business environment, which includes streamlined and transparent regulations, access to financing options, and protection of property rights.
In particular, Australia excels in the areas of “Getting Electricity” (ranked 2nd globally), “Dealing with Construction Permits” (ranked 5th), and “Paying Taxes” (ranked 8th). These results showcase the country’s robust infrastructure, efficient regulatory processes, and streamlined tax system, which make it easier for businesses to operate and flourish.
Overall, the data confirms that Australia offers a supportive environment for existing and new businesses and is viewed as a favourable destination for entrepreneurship and investment opportunities.
Funding red tapes
In Australia, the process of obtaining funding for small and medium-sized enterprises (SMEs) can be complex and time-consuming. Despite the fact that Australia is considered one of the best countries for ease of doing business, there are still many red tapes that SMEs need to navigate to secure funding.
One of the biggest challenges facing SMEs in Australia is the need for access to capital. Traditional bank loans are often difficult to secure, particularly for new and growing businesses. Alternative financing options, such as venture capital, are also limited, especially for early-stage companies. Access to capital can impede the growth and development of SMEs and lead to the failure of many businesses.
According to a 2020 RBA report, for many years, small businesses have reported that they have needed help accessing finance with terms that suit their needs. Surveys of small businesses indicate that access to finance remains difficult but improved towards the end of 2020.
“While small businesses access to finance from lenders tightened in the early stages of the pandemic, various policy measures were provided to help support the provision of credit. However, lending to small businesses remains little changed. Businesses have been reluctant to take on more debt in an uncertain environment and, at the same time, many have been able to make use of a range of temporary measures that have supported revenues or allowed for deferral of payments,” the report noted.
Another barrier to funding in Australia is the rigorous application process, which can be time-consuming and involve extensive documentation. This can be especially challenging for SMEs with limited resources and time. In addition, the due diligence process that is often required to obtain funding can be intrusive, requiring SMEs to provide detailed information about their financial and business operations.
To overcome these funding red tape, many SMEs in Australia have resorted to creative financing solutions, such as crowdfunding, peer-to-peer lending, and angel investing. These alternative funding options can provide a quicker and less complex path to securing SMEs’ capital to grow and succeed.
Fawcett stated that their years of experience working with businesses in Australia and New Zealand had given them a comprehensive understanding of what is most important.
As a result, they have designed their business management platform to cater to the needs of business owners as they establish their enterprises and as they look to expand in the future.
Over the past year and a half, MYOB has been focused on enhancing its platform by acquiring several key companies, such as Flare (an onboarding and benefits platform), Tall Emu (a CRM software), and Nimbus (a workforce management solution).
To find out more about how MYOB is unleashing the potential of Australian business, visit here.
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