It’s an oft-cited statistic: the majority of small businesses fail in their first year for a variety of reasons, and chief among them is a lack of funding.
However new research from Intuit has found that 81 per cent of small business founders are confident their business will be active in five years.
Rich Walker from Intuit Australia said it’s important to keep the country’s small business sector confident.
“SMBs account for more than 95 per cent of the total business population, so we need to keep them going strong,” Walker said.
Despite their confidence, securing external funding is a problem for many start ups, with up to 75 per cent not seeking external funding.
The number of SMBs that receive funding from ‘business angels’ or venture capital firms is virtually non-existent.
The majority of start ups and young businesses are using personal savings to fund their ventures, while personal credit cards and money from the founder’s other business ventures also providing funds.
However, the majority of small businesses are able to get bank loan applications approved. According to the Reserve Bank of Australia, 80 per cent of applications are accepted.
The future looks particularly bright for start ups in the tech space, with the Australian government supporting the field through two main initiatives.
The R & D tax incentive provides a 45 per cent refundable tax offset for small companies investing in innovation, which can include software development.
The innovation investment fund co-investment scheme provides fund managers in the private sector with capital for investment in start ups and early stage companies.
Other larger companies are also getting on board to support Australia’s start ups and SMBs.
Intuit launched its Love Our Local Business campaign this week, which will provide grants of $1,000 to 15 Australian businesses.
“We surveyed Australia small businesses to see how we could really help, and found that if given an extra $1000 to help them embrace online, a quarter would spend the money on mobile tech tools to help manage their business administration tasks, while a third would spend the money on developing a new or existing website to improve their online presence,” Walker said.
Find out more about the grant scheme here.