NEW research has shined a light on Australia’s gender financial literacy gap and its impact on entrepreneurial success.
Australia’s female small business owners (SBOs) have identified financial literacy as the biggest barrier to overcome when setting up and running a small business (74 per cent), exceeding cash flow management (57 per cent), and inflation/higher interest rates (49 per cent).
This is according to new research released from online accounting software provider, Intuit QuickBooks.
Ninety per cent of female SBOs believe their understanding of financial literacy affects their ability to scale their business, while only six in 10 (60 per cent) feel very confident in their level of financial literacy and 36 per cent are somewhat confident.
Head of Accounting at Intuit QuickBooks Australia, Shaye Thyer, said it was an area of concern.
“This latest research shows just how critical the need is to address the financial empowerment gap with Australian small business owners, specifically female SBOs,” she said.
“Ninety-eight per cent of businesses in Australia are small to medium enterprises, with approximately 40 per cent being female-owned. These businesses are crucial contributors to our economy, society and livelihoods; as a nation, we need to immediately work to build financial confidence and resilience within this community.”
For Australia’s more than 800,000 female entrepreneurs, this financial literacy ‘gap’ has the potential to limit their business’ success.
A report by the Global Financial Literacy Excellence Center identified that Australian women already exhibit the second-highest financial literacy gap compared to men of all G20 countries.
Further, the gender financial literacy gap is only increasing, according to the latest Household, Income and Labour Dynamics in Australia survey in 2022 that asked respondents a series of five basic questions about money.
The survey found that the average correct score of women – already lagging well behind men – slipped from 3.7 to 3.5 (out of five), while men had an average correct score of four.
According to the research, the most common support female SBOs rely on for financial advice includes family members (44 per cent), followed by accountants and bookkeepers (25 per cent).
Conversely, 26 per cent of female entrepreneurs have taught themselves the financial know-how needed to run their operations.
Outside of a grant, the biggest financial boosts female small business owners want to see include free government-funded advice (30 per cent); free financial wellbeing refresher courses (28 per cent); and a need for financial education to start at school level (20 per cent). “What is evident is that female SBOs require easy access to information, advice, tools or support,” Thyer said.
“As an accountant by trade, I can’t highly recommend enough that all female SBOs lean on their accountant or bookkeeper to guide, inform and educate on financial decisions that will impact the running of their business and ultimately, keep them financially secure.
“Women often sit at the heart of families as well as small businesses – so the more empowered women are to apply their financial knowledge, the more female-led SBOs will thrive to the benefit of everyone.”