When it comes to financial know-how, it seems there is a serious lack of knowledge among start-up companies and small businesses in Australia.
This week saw the release of results from the Intuit Financial Fitness Startup Study, conducted by Galaxy Research, with the survey investigating 400 Australian startups' financial knowledge.
The results were not positive, with 53 per cent of respondents failing a 10-question test on common financial and accounting terms. In addition, 8 per cent failed to answer any questions correctly, and 12 per cent scored just one correct answer out of ten.
Gen Y was found to be the least knowledgeable on finance, with only 26 per cent passing the survey, compared to 44 per cent of Gen Xs and 63 per cent of Baby Boomers. A further 65 per cent could not identify the role of a balance sheet and 70 per cent were not able to define accruals.
Australia has over 500,000 people involved in start-up activity at any one point, and the country has two million small businesses nationwide. But with 25 per cent of start-ups closing their doors in the first year and only 50 per cent finishing the third, it might be time for small business owners to hit the books to get more financially savvy.
