In the Australian small business climate a particular facet of knowledge seems to be lacking, with a new study suggesting small business owners and entrepreneurs lack the necessary financial know-how.
The Intuit Financial Fitness Startup Study, conducted by Galaxy Research, surveyed 400 startup owners with a 10 question quiz, covering concepts such as the role of the balance sheet, accruals and depreciation, and how to improve short-term cashflow. The results painted a disappointing picture, with 58% of respondents failing the quiz, one in ten unable to answer any question correctly and only 3% answering every question correctly.
“According to the Australian Bureau of Statistics, around one in four startups close their doors in the first year and only half make it through their third,” revealed Nicolette Maury, Managing Director of Intuit Australia. “However, with a solid financial foundation, we know budding talent can build stronger, more resilient businesses that will stand the test of time and help build a prosperous economy.”
There is clearly a great need for financial assistance for small businesses. Research indicates that 19 per cent of startups would benefit from a mentor, 16 per cent would opt for a financial management course, 12 per cent would like an accountant or bookkepper to manage their finances, and another 12 per cent would seek online tutorials.
“Financial literacy plays a major role in boosting the success rate of young companies,” said Sam Birmingham, National Director of Startup Weekend Australia. “Arming Aussies with the tools to build and maintain a healthy business is vital and will ultimately contribute to long-term economic growth and innovation.”
Do you think there is a greater need for financial assistance in your salon? Which methods would you take in order to improve?
You can take the quiz yourself at www.intuit.com.au/r/financial-literacy-quiz
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