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Running a small business is tough. Although there are currently more than two million small businesses in Australia, the survival rate for first three years is still below 40%.
But this stat is nothing compared to the number of Australians harbouring the ambition to start their own business, or "side hustle", but are too scared to take the leap.
According to the CGU Ambition Index, more than half of all Australians (53%) have considered starting their own business but are yet to act on their ambition.
The inaugural CGU Ambition Index spoke to 2,000 Australians – including 1,000 small business owners – to find out why a “lucky” country like Australia isn’t more comfortable chasing its dreams.
It’s easy to think that the fear of failing – like two thirds of businesses before them have experienced – is the greatest deterrent. But the Ambition Index uncovered a factor with a greater impact than the fear of failure: tall poppy syndrome, or the fear of voicing our ambitions and being labelled a “bragger”.
While 44% of respondents said a fear of failure stopped them from chasing their dreams, a staggering 70% were afraid to even talk about them, believing Australia has “a culture of negativity towards ambition”, according to the report.
The cost of fear
This fear of either failing to reach your business goals or being judged negatively for your success is having a huge impact on the potential growth of Australia’s small business sector.
So while 53% of Australians are considering starting their own business, only 6% have gone ahead and done it.
Yet if just 10% more took the leap and started a business in the next two years, it would result in the creation of 250,000 more Australian businesses, which could contribute more than $1.7 billion to Australian GDP in the next 12 months alone.
It’s not just the GDP contribution that’s an important upside of changing the culture of negativity around ambition – we need the boost to innovation too.
Australia recently ranked 19th in the Global Innovation Index and was labelled a "stall out" nation – a country that previously achieved a high level of innovative evolution but has lost momentum and risks falling behind.
The view from the other side
The outlook isn’t all bad though. The Ambition Index found that the view of business owners is significantly more positive than non-business owners, implying that a lot of the fear of failure or judgement is in their heads, and may not materialise once they take a chance.
Only 5% of business owners said tall poppy syndrome had been a barrier for them, and less then one in four were too worried about failing to chase their dreams – compared to almost half of all people surveyed.
“All of us have a role to play in better supporting those who have the courage to be ambitious and to chase their dreams,” the CGU Ambition Index report says.
“This includes being more comfortable talking about ambition, as well as failure, and calling out ‘tall poppy syndrome’ when we see it.”
The report also found that people believe established businesses have a greater role to play, with 90% thinking large Australian businesses should be more ambitious.
But leading by example is one thing. Throwing your support behind ambitious Australians is another.
Jessie Porteus, founder of The Learned Crew, has been lucky enough to enjoy the continued support of her employer while she started her own business.
The Learned Crew is a legal training and law student incubator business, which aims to bridge the gap between what students learn at law school, and the practical (and human) skills they require in their legal career.
Porteus spent years thinking about how to address this gap in the industry, before deciding to take the risk and launch her business.
“I looked at the legal industry, which is currently undergoing a spectacular transformation, and saw this unfilled gap coupled with a willingness to change... [but] I also didn't want to live with regret,” she told Business Insider.
Porteus agrees that the grass is greener on her side; and that while she did have concerns before leaving her traditional legal career and starting her business, the risk has been worth it.
For other Australians considering acting on their ambitions, Porteus advises them to do their due diligence on the risks but not let fear stop them from following their passion.
“Understand your customer first to see whether your business has legs… ask questions, run lean experimentation, and use design thinking to assess your customer's pain points. Spend most of your time thinking about the problem your business is out there to solve. As Einstein said, 'If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.'”