New research has confirmed an issue plaguing designers in the fashion industry.
The Intuit Financial Fitness Startup Study revealed a serious lack of financial know-how among start ups and small businesses.
The study, conducted by Galaxy Research, was launched today by Intuit Australia with John Barilaro, NSW Minister for Regional Development, Minister for Skills and Minister for Small Business, in attendance.
The study surveyed 400 startups across Australia and exposed a critical financial knowledge gap.
A majority of respondents (58 per cent) failed a 10-question test on common financial/accounting terms. Additionally:
• One in 10 (8 per cent) failed to answer any questions correctly.
• One in 10 (12 per cent) scored just one out of 10.
• Gen Y was shown to be least financially savvy – just 26 per cent passed v. 44 per cent Gen Xs v. 63 per cent Baby Boomers.
• The majority could not identify the role of a balance sheet (65 per cent) or define accruals (70 per cent).
Startups and small businesses are at the heart of the economy with 500,000+ Australians involved in startup activity at any point in time.
There are also two million small businesses nationwide.
Despite this, one in four startups close their doors in the first year, with only half making it through their third.
The respondents recommended a range of options to boost financial knowledge including a mentor, a financial management course, an accountant or bookkeeper and online tutorials.
The Australian Fashion Chamber has spotlighted financial literacy as a key issue facing designers in the market.
