- Written by Westpac
Westpac research[1] 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. These are businesses that have operated for less than 2 years and applicants must provide a sound business plan and budget projections and meet eligibility and credit criteria for approval[2].
- 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. Applicants must provide relevant financial and tax information, including at least 12 months’ financials, and meet eligibility and credit criteria for approval[2].
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%). The biggest hurdle for over a quarter of SME leaders (27%) in the first two years was cashflow. - Nearly two thirds (63%) of SME leaders funded their current business through their own savings. This is nearly twice as many as those who used a loan from a financial institution.
- In terms of support, 28% said their family was the most help when they first started their business, followed by partners, and a mentor.
Customer case study
Business name: Your Space Oceania
Business Website: www.yourspaceoceania.com
Business Owner: Tony Milham, Managing Director
Location: Tasmania, Australia (national service)
Overview of Your Space Oceania
Your Space Oceania, an Australian-owned and operated company, is setting a new standard in home ownership by offering sustainable, affordable, and customisable modular homes. Proudly designed and engineered in Australia, these homes are crafted with the planet in mind and built to last, utilising materials that minimise environmental impact without compromising on quality or luxury.
The team specialise in creating modular homes that are tailored to the customers’ needs and values. They manage every aspect of the build from initial planning to final installation, providing a seamless experience.
Tony Milham, Managing Director, Your Space Oceania said:
“What inspired me to start my own business was the drive to create sustainable, customisable, and affordable modular homes. At Your Space Oceania, we understand that affordable housing is crucial, and our mission is to provide high-quality, stylish homes even on a modest budget.”
Tony Milham continued:
"After months of struggling to secure a loan from several Australian banks for my new business, I was running out of funds. The lack of response and endless follow-ups left me feeling frustrated and defeated.
“As I’d always had a good experience with Westpac for my home loan, I decided to visit my local branch to see if they could help with my business request. From the moment I walked in, I was greeted by a welcoming team that was genuinely eager to help. They swiftly introduced me to Inder Singh, Westpac Business Finance Manager, Small Business, a dedicated banker who had answers to everything and provided great advice.
“He recommended I take out a Westpac Business Loan for start-ups – all I needed was a solid business plan and to meet the credit criteria.
“Just two weeks later, I received the loan. It was that simple!
“Since I have received the loan, I have been able to focus on developing our products, building our website, paying wages, and start trading! I’m happy to say that business is going well, and we have already sold several of our modular homes.”
For more information on the Westpac business loans for start-up and scale-ups, please visit:
Business loan for startups | Westpac
[1] Source: 3146 Westpac SME Research, Lonergan Research, October 2023. The research was commissioned by Westpac and conducted by Lonergan Research in accordance with the ISO 20252 standard. Lonergan Research surveyed 502 Australian SME Business Leaders with surveys distributed throughout Australia including both capital city and non-capital city areas. The survey was conducted online amongst members of a permission-based panel. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.
[2] Terms & Conditions, fees & charges, and eligibility and credit criteria apply.
