New research from design and marketing firm Vista Australia has revealed the risks Australian small and medium enterprise owners have taken, especially in the early days of setting up a business.
The Vista 2023 SMB Report found that the majority of Australian SMEs are ‘winging it’ when starting their operation with 60 per cent saying they have no business management, ownership experience or skills at the outset. In fact, only nine per cent were seasoned entrepreneurs before setting up their own gig. 41 per cent shared that their business began as a passion project which then turned into a mainstay commercial enterprise, and 32 per cent said it developed out of an idea conceived at a previous job.
In terms of funding, an overwhelming 82 per cent of SMEs were self-funded. Only seven per cent have taken out a loan and nine per cent have borrowed from ‘the bank of mum and dad’ or family.
Female SME owners were found to be bigger risk takers than their male counterparts, with only 34 per cent having had previous business management, ownership experience or skills, compared to 50 per cent of male SME owners.
There is an air of apprehension among SMEs coming into the new year, with inflation (48 per cent) and the potential recession (29 per cent) the biggest worries for 2023. 20 per cent shared that they feel hesitant and 22 per cent feel nervous about 2023, but they are still willing to invest to get ahead.
in general, SMEs’ are focusing this year on growth (58 per cent) and recovery from 2022 (43 per cent), while 21 per cent see innovation as the big opportunity for the year ahead. Upskilling will be a key focus of 2023, with 40 per cent saying it is an area of investment. 26 per cent) of SME owners are looking to learn new technical/digital skills (i.e., AR/VR, automation, data, IT) in the next 12 months, while 20 per cent are focused on leadership as their main area to upskill.
28 per cent also see marketing as the biggest opportunity for 2023 – with 30 per cent investing most of their marketing spend into social media specifically, followed by 13 per cent investing in their website. SMEs will also be focusing on networking opportunities (24 per cent) and investment in product and resources (20 per cent), confirming that despite hesitation coming into the new year, there is still a focus on investment.
“SMEs have been through tough times in recent years – from natural disasters to an uncertain economy and rising inflation, it’s enough to dampen anyone’s spirits. Yet, by and large, SMEs remain stoic in this year ahead. They were willing to take risks to succeed in start-up mode, and they certainly aren’t shying away from investing in 2023 – it’s encouraging to see that so many SME owners are continuing to look into the future and choosing to upskill and invest, even in uncertain times”, says Marcus Marchant, CEO of Vista Australia
