Westpac research reveals that almost half (48%) of surveyed Small to Medium Enterprise (SME) leaders looking to start their own business are motivated by the desire to be their own boss.
This was followed by flexibility of work hours (36%), identifying a gap in the market (25%), and being inspired by successful entrepreneurs (20%), which was particularly relevant for Gen Z (at a much higher 48%). Side hustles are also a key motivator with 19% being driven by another income stream.
On average, the surveyed SME leaders now estimate the businesses they started from scratch are worth $1.8 million. The research also showed that for more than a third (35%) of SME leaders, their business was profitable within the first year. However, on average it took 2.3 years to turn a profit.
Despite the benefits of being your own boss, new business owners were also faced with challenges. Cashflow was the biggest hurdle they had to overcome in the first two years of establishing a business (27%), in addition to long hours (17%) and operating without making a profit (16%).
Tamara Bryden, Westpac Managing Director, Business Lending, said: “We play a key role in supporting aspiring business owners to get started, as this not only supports their ambitions, but also contributes to economic growth and innovation.”
“We know that for many people starting a business, access to funding is a determining factor in getting their business off the ground. We’re committed to supporting the next generation of business owners who want to be their own boss, so we’ve made it less complicated to access finance with dedicated start-up and scale-up loans,” she said.
Westpac is committed to helping businesses start-up and scale-up with business loans for new and existing customers:
- Business Loans for start-ups: Unsecured business loans between $10,000 and $50,000 with loan terms of up to five years to help new businesses get started.
- Business Loans for scale-ups: Secured or unsecured business loans between $5,000 and $3 million with a variety of loan terms to help existing businesses to grow.
The research also showed:
- On average, SME business leaders started their current business at 33 years old. Female SME leaders are on average three years younger, starting their business at 31 years (compared to 34 years for men).
- Over one in four (27%) SME leaders have started a business from scratch.
- The hardest part of starting a business is the uncertainty about making money (21%).
- Nearly two thirds (63%) of SME leaders funded their current business through their own savings.
- In terms of support, 28% said their family was the most help when they first started their business, followed by partners, and a mentor.
