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Self-Started – Australian Women Tackle Challenging SME Market

14 October 2013

Australia’s Female SME Owners – a snapshot

72% finance their business out of their own savings

59% started their venture on their own

65% say it was one of the most challenging things they have done

SME challenges for women

The Westpac Women SME Report has revealed the resilience of Australia’s female small-to-medium enterprise (SME) owners who, despite finding the process of setting up their business extremely challenging, are independent and strategic when it comes to starting, managing and financing their own business.

The report revealed that almost three quarters of female SME owners finance their business out of their own savings (72%), which is typical for start-ups as owners tend to be cautious to take on debt before they have any cash flow. The majority of the national survey’s participants also started their venture solo (59%), which highlights the independent and ambitious traits of women who currently make up about one-third of Australia’s total SME market (34%), according to ABS figures.

In addition, female SME owners draw on the strength of their previous experience and expertise, with more than three in five (68%) having previously worked in the same or similar business area or industry in which they set up their own business.

Westpac Director of Women’s Markets, Larke Riemer, said, “It’s exciting to see that women who have a passion for business are turning their dreams into a reality as they seek independence and flexibility. Our research indicates that these women are building on past knowledge from their experience in the corporate world. Clearly, they have confidence in their ability to make these businesses succeed because they are doing so much on their own during the start-up phase, and setting themselves up correctly to be able to grow down the track”.

The report also underlines the reality behind starting a business, with more than two thirds of women suggesting it was one of the most challenging things they have done (65%). Dealing with certain areas of business I which they had no previous experience (44%), securing new business (36%) and controlling the hours they work (33%) were identified as the top three challenges during the start-up phase of a SME.

“Before starting a business, you need to ask some basic questions such as where will I find the information I need to run the business. The skills that you may not necessarily have, such as managing cash flow, suppliers and invoices, and promoting your business to the right audience. There is a lot of support and information available; you just need to know where to look.

“There are many challenges small business owners face but with a clearly defined plan, these obstacles can be overcome. Starting a business from personal savings is a good first step so the owner isn’t overstretched before they have any cash flow. It is establishing strong cash flow fundamentals and thinking about ways to grow revenue which can be key to ongoing, sustainable growth. SME owners need to consult financial professionals to extract those insights.

“At Westpac, we have a range of resources, like our Westpac Ready For Business website, which are specifically designed to help small businesses, particularly during the start-up phase. We encourage SME owners and those starting a small business to speak with a Local Business Banker at a Westpac branch. Each has an extensive knowledge of the market in their area, and can help guide new start-ups through the fundamentals, such as profits and losses, to targets and projections,” said Ms Riemer.

The research looked at the sectors in which female SME owners are focusing on. Retail continues to be one of the most common, but women are increasingly looking to start-up new enterprises in professional services, such as management consulting (14%), as well as finance and accounting (13%).

“The research has shown us that women who own SMEs are highly educated, with 66% having an undergraduate degree and 34% with a post graduate degree. These women want to use their education and the business skills they have acquired.

“While retail is still the most common sector, we are seeing a trend towards women with corporate experience moving into consulting and management businesses. The owner-operator structure of these businesses offer more flexibility for women who need to take a break from the corporate world to prioritise other life goals such as starting a family, while at the same time they are keeping a finger on the pulse. By staying in touch from a business sense, they are giving themselves options. Down the track, they can decide to grow their business or move back into the corporate world on terms that suit them,” said Ms Riemer.

Although the research shows that women are clearly doing it for themselves, it also highlighted their desire to continually improve the running of their business. As a result, two in five respondents (43%) said they would like to attend more organised networking sessions to gain further advice and support regarding the running of their business.

“SME owners should invest time building a strong network of supporters, whether that’s through networking events, industry group memberships or online. That’s why we developed Ruby Connection, an online platform for aspirational business women to connect, share insights and ideas and meet other like-minded women – connections that could turn out to be their next potential business partner, colleague or client,” said Ms Riemer.

For more information or advice on starting up a small business, visit Westpac’s Ready for Business website at


women and time SME

Starting Out

Close to three in five women (59%) have started a new business on their own.

27% have done so with a business partner.

11% have bought into a franchise or existing business.

72% financed their business out of their own savings.

Only 9% took out a business loan to finance their new business venture.

The Challenges

More than two thirds of women (65%) found setting up their business as one of the most challenging things they have done.

The top three challenges women face when setting up a business include:

o Dealing with certain areas of business they had no experience in previously (44%)

o Securing new business (36%)

o Controlling the hours they work (33%)

Female SME Landscape

The top three industries for recent start-up businesses for female SMEs include:

o Retail (14%)

o Management Consulting (14%)

o Accounting / Finance and Banking / Mortgage (13%)

More than three in five (68%) women previously worked in the same or similar business area or industry in which they established their own business in.

Two thirds (66%) of female SME owners have at least an undergraduate degree and 34% have a post graduate degree.

Two in five (43%) would attend more networking sessions or industry conferences to gain advice and support.


Westpac Tips for Female SME Owners:


1. Set objectives and have a plan

Being clear about what you have set out to achieve up front will give you guidelines for what activities you will take up, and those you won't. Have a plan, write it down, and review it. The plan is your roadmap to success. If at any time you are forced to take a detour in your strategy, it will help you find your way back onto the main road.

2. Clearly define your target market and brand

Doing some market research will indicate whether there is a market for the product or service that you are trying to sell, and what price your customers will pay for it. Have a clear idea of how you want to be known or perceived in the market. By building a consistent brand image, you build a reputation that pulls customers back to you.

3. Profit before sales

In terms of profit, work out your overall pricing strategy, make sure you are building in an appropriate margin and don’t be pressured to change your strategy.

4. Don't think "network", think "connection". AND think “online”.

Networking’s an opportunity to connect with other people who share your passions, interests and values. People do business with people they like and trust, and forming positive and creative connections fosters this like nothing else. Ask yourself important questions such as 'what is the true value that I can offer to others?’ to open up opportunities for yourself, and others will become more willing to assist you in achieving your goals and desires. Online offers the ability to network and connect 24/7.

5. Knowing your breakeven point

Understanding at what point your business will breakeven will help you better direct your day to day efforts in running the business and help you avoid tasks that provide no realistic, profitable benefit.

Australian SME Snapshot

According to the ABS, one third (34%) of all small businesses are operated by women.

Small enterprises (0 – 20 employees) account for approximately 96% of business run by women.

Nearly three in five (59%) are 35 to 54 years of age, and 29% are 35 to 44 years of age.

About Westpac Women’s Markets and Ruby Connection

Westpac was the first Australian bank with a business unit exclusively dedicated to supporting women – working alongside women to help them build sustainable and profitable futures via the provision of education, information and networking opportunities across Australia. Ruby Connection is an interactive online community designed to inspire, educate, promote and connect Australian women no matter what they do, where they live and who they bank with. Ruby provides an opportunity for all Australian women to learn from each other.

This survey was driven by Sweeney Research via online polling of 369 female small business owners currently residing in Australia, sourced from the Ruby Connection Panel and ORU Business panel. A copy of the executive summary of the report is available upon request.