What motivates Australians to go into business? According to research from Xero, the tipping point is often a combination of opportunity, the lure of financial independence, and dissatisfaction with their current work situation.
Xero surveyed more than 800 soloprenuers for their Tipping Point research to uncover the motivation and challenges faced by the nation’s sole traders. The research discovered more than two in five (43 per cent) have always planned to be their own boss, and almost a quarter (23%) have held this dream since childhood.
Uncovering the tipping point
Trent Innes, Managing Director Australia and Asia, Xero described Australia as a nation of self-starters, with sole traders accounting for the majority of local businesses.
“Xero’s Tipping Point report reveals that the Aussies who make this leap are driven by the freedom and independence that comes with working for yourself. While many of us may like to lay claim to a great business idea at one time or another, this research shows it takes a particular person and special set of circumstances to truly turn that idea into reality.”
What motivates an Aussie to fly solo?
The freedom to be their own boss is a strong motivator for Australia’s solopreneurs. Among the biggest motivators to forge a path on their own is the desire to gain freedom and control. Making their own decisions (47 per cent) and working for themselves (46 per cent) were top of the list as reasons for sole traders to branch out. Passion and creativity follow closely behind, with just under a third (32 per cent) choosing to follow their passion and wanting creative freedom (31 per cent).
Oftentimes the desire to get out of a rut or leave a dead-end job could provide enough of a push for a person to go out on their own. In fact, the study found four out of five (79 per cent) sole traders felt negatively towards their previous job or career before they went out on their own, with millennials aged between 30 and 39 the most likely to fall in this category. The most common feelings were unhappiness with a former manager (34 per cent), frustrations with lack of control (32 per cent), feeling like they were going nowhere (31 per cent) and feeling uninspired and unmotivated (30 per cent).
The challenges of solo life
While working for yourself can delivering immense rewards, solopreneurs revealed its not without challenges. Many sole traders report financial pressures, particularly in the initial planning phase. Budgeting for unknown costs was also a key challenge for more than a third (39 per cent) of sole traders. Other challenges included staying organised and on track (55 per cent), driving customer acquisitions (53 per cent), and knowing where to get started (38 per cent).
While a growing number of Australians have a side hustle, many sole traders expressed concerns about having the confidence to ditch their day jobs and strike out on their won. More than two in five (44 per cent) respondents felt they had to generate self-belief and reduce self-doubt, while one in three (34 per cent) were concerned about overcoming fear, worry and anxiety.
To overcome this anxiety, many turned to family and friends for support with 37 per cent turning to family for advice when starting out.
The characteristics of success
What are the characteristics of a successful sole trader. According to the report being optimistic, having a strong work ethic and being adaptable are some of the most vital characteristics sole traders believe are required for success. Digital tools were also perceived as critical for success, (40 per cent) view reliance on effective digital tools as critically important. Yet despite this sole traders continue to lag behind in digital transformation. Less than four in ten have a website and among those that do, less than half (48 per cent) can make sales transactions through their website.
COVID-19 hasn’t dampened the spirits of entrepreneurship
The pandemic proved a catalyst for many people to take the plunge into starting their own business, with Xero MD praising the small business sectors ability to cope with change.
“Australians have shown remarkable resilience in the face of the pandemic, and nowhere is this more evident than in the micro and small business sector. It’s this inherent resilience that will drive many aspiring business owners to get their idea off the ground in 2021 and gain the autonomy they’ve longed for – sometimes from as early as childhood,” Innes concluded.
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