Australia may not be creating the environment to foster the next generation of global companies, with new research from global small business platform, Xero, revealing only 17% of small business owners aspire to grow internationally.
Xero’s ‘It’s your business’report, which surveyed 500 Australian small business owners, found that 83% consider Australia a good place to start a business, with ABS data showing almost 300,000 people decided to start something of their own in the 12 months to June 2024*. But, the entrepreneurial appetite for global growth is lacking.
The top motivations for starting a business were the desire to be their own boss (43%); being able to prioritise their lifestyle (31%); and to earn more money (29%).
Angad Soin, Managing Director ANZ and Global Chief Strategy Officer at Xero said: “Xero’s new research suggests, to unlock the nation’s full entrepreneurial potential, Australia must create the right conditions to foster ambition and support scaling. That starts with understanding the changing face of small business.
“We know Australians value their lifestyle, so it makes sense that so many of us want to be our own boss; to chase that flexibility and freedom. But it raises the question: does Australia have the right conditions to support small businesses in recognising their full potential?”
Macro-economic concerns could be a barrier to growth aspirations, with almost half of all small business owners (47%) saying they are worried about the current economic environment and cite challenges such as recently imposed US tariffs, volatility and the associated risks, and exchange rate fluctuations.
Soin said: “While we can’t control global economic tides, we can control how we foster a resilient and ambitious business culture. For business owners, it starts with giving them time back to focus on defining and achieving their personal definition of success. For policymakers, there is a critical conversation to be had at the Economic Reform Roundtable to design policy that supports our diverse small business sector to help them thrive. With small businesses contributing to half of our GDP and employing one in every four Australians, it is in everyone’s interest to have a thriving small business sector.”
The faces of small businesses in Australia
The report found small businesses are redefining what it means to be successful. Almost all (96%) small business owners consider themselves successful or on their way to reaching success, yet their top motivations favour freedom and lifestyle factors, sustained growth, and purpose over money or accelerated growth.
The research examines differing definitions of success through three main entrepreneurial archetypes:
● Lifestyle entrepreneurs account for almost half (47%) of business owners profiled, where success is finding freedom and purpose, and spending time doing what they love; they’re not defined by financial independence.
● Just under a third (30%) are ambitious achievers, for whom success means accelerated growth; and building wealth, a beloved brand, and a legacy.
● Lastly, situational founders account for just under a quarter (23%), where success means discovering freedom, sustained growth, and being financially rewarded for those efforts.
Soin added: “Australia’s small business community is more diverse than ever, reflecting the different ways small business owners measure their success. Digital tools have played a huge role in opening up what’s possible, making it easier for people from all walks of life to start and grow a business on their own terms. For many, it’s no longer about fitting into a traditional mould, but about creating something that works for you.”
Business owners thinking short-term, overlooking the importance of long-term planning
While small business owners are clear on their version of success, many overlook the importance of a long-term plan, with almost half (49%) admitting they don’t have long-term goals for their business, and less than a third (31%) have an ‘endgame’in mind.
“Australia has an incredible entrepreneurial spirit, and the opportunity for small business owners to carve out their own path has never been greater,” Soin said. “But to truly make the most of that potential, the first step is getting clear on what success looks like to you. From there, the right digital tools or a trusted advisor can help turn that vision into something real and achievable.”
Benefits of advisory go all the way to the bottom line
The report further cemented the critical role of advisors in Australia’s small business economy, with 86% of respondents reporting that they rely on the advice of an advisor. Significantly, more than half (51%) of those who do rely on an advisor reported a revenue increase in the past year, compared to 38% of those who don’t. Further to this, 67% of those who use an advisor report feeling confident in running their business, compared to 55% of those who don’t.