new small business education€¦ · telephone survey of 600 business owners and in-depth...

New Small Business Education Australian Tax Office

September 2016

New Small Business Education | 10/10/2016 ATO 2

Project Contact: KYLIE BROSNAN, Director, Ipsos Public Affairs, Qld

Contact address: Suite 3a, 80 Stamford Road

INDOOROOPILLY

QLD 4068

Office phone: +61 7 3016 7660

Email: [email protected]

mailto:[email protected]


Table of contents

1 EXECUTIVE SUMMARY 5

2 PROJECT BACKGROUND AND METHODOLOGY 13

2.1 Project aim 13

2.2 Methodology 14

2.2.1 Qualitative research 14

2.2.2 Quantitative research 16

3 RESEARCH FINDINGS 20

3.1 Motivated to learn 20

3.1.1 Improving knowledge about business and financial management 20

3.1.2 Improving knowledge about tax and super 21

3.1.3 Motivators for learning 22

3.1.4 Balancing costs and benefits 26

3.2 Educational preferences 27

3.2.1 Preferred method to build knowledge 27

3.2.2 Usefulness of various learning aids for building knowledge 28

3.2.3 Preferred providers 30

3.2.4 Sourcing information 30

3.3 Key advisors 31

3.3.1 Who do business owners rely on for advice? 31

3.3.2 Not getting the most out of the professionals 35

3.3.3 Perceptual barriers with the ATO hinders learning 36

3.4 Learning journey 38

3.4.1 Learning curves 38

3.4.2 Learning styles 40

3.4.3 Black boxes 41

3.4.4 Frustrations with finding the right resources and sources 41

3.5 Feeling under pressure and not confident 43

3.5.1 Many new small businesses are under financial pressure 43

3.5.2 Perceived level of tax and super knowledge 44

3.6 Target audience 47

4 APPENDIX 54

4.1 Discussion guide 54


4.1.1 Business owners Interviews 54

4.1.2 Expert Stakeholder Interviews 65

4.2 Quantitative Survey 74

Figures Figure 1 Preferred Providers ................................................................................................................................... 7

Figure 2 Preferred Methods ................................................................................................................................... 8

Figure 3 Research Design ...................................................................................................................................... 14

Figure 4 Qualitative Sample by Industry ............................................................................................................... 15

Figure 5 Qualitative Sample by Location .............................................................................................................. 15

Figure 6 Qualitative Sample by Stakeholder Industry .......................................................................................... 16

Figure 7 Characteristics of the sample ................................................................................................................. 17

Figure 8 Prior Business Experience ....................................................................................................................... 17

Figure 9 Industry Sector ........................................................................................................................................ 18

Figure 10 Businesses owned for < 1 year ............................................................................................................. 19

Figure 11 Businesses owned for 1–3 years ........................................................................................................... 19

Figure 12 Intent and inclination about financial management right now – business owned < 1 year ................. 20

Figure 13 Intent and inclination about financial management right now– business owned 1–3 years ............... 20

Figure 14 Intent and inclination about tax and super right now – business owned < 1 year ............................... 21

Figure 15 Intent and inclination about tax and super right now - business owned 1–3 years ............................. 21

Figure 16 Influencers and Barriers for learning .................................................................................................... 26

Figure 17 Preferred Methods to build knowledge .............................................................................................. 27

Figure 18 Most Useful to build knowledge – businesses owned < 1 year .......................................................... 28

Figure 19 Most Useful to build knowledge - business owned for 1–3 years ...................................................... 29

Figure 20 Preferred Providers .............................................................................................................................. 30

Figure 21 Support and Connections – business owned < 1 year .......................................................................... 31

Figure 22 Support and Connections – business owned 1–3 years ....................................................................... 33

Figure 23 The unconsciously incompetent ........................................................................................................... 39

Figure 24 The trial by error ................................................................................................................................... 39

Figure 25 The simple cruiser ................................................................................................................................. 39

Figure 26 The prepared planner ........................................................................................................................... 40

Figure 27 Financial State – owned for < 1 year .................................................................................................... 43

Figure 28 Financial State – owned for 1–3 years .................................................................................................. 43

Figure 29 Financial competence of businesses owned for < 1 year ..................................................................... 44

Figure 30 Financial competence of businesses owned for 1–3 years ................................................................... 45

Figure 31 Elements of capability........................................................................................................................... 47

Figure 32 Correlation Analysis on Capability ........................................................................................................ 48

Figure 33 Capability by overall less knowledgeable business owners cluster ...................................................... 49

Figure 34 Capability by overall more knowledgeable business owners cluster ................................................... 49

Figure 35 Summary of Clusters ............................................................................................................................. 51

Figure 36 Support and connection by overall less capable business owners cluster ........................................... 52

Figure 37 Support and connection by overall more capable business owners cluster ........................................ 53

68% 30% 2%to manage my business


1 Executive summary

The ATO’s aim is to understand the ‘education experience’ of new small businesses (up to three

years), beyond simply increased awareness of tax and super requirements, to being capable,

whether they choose to undertake tax and super tasks themselves or whether they choose to use a

tax professional to undertake all or some of these tasks. This report delivers the findings from a

telephone survey of 600 business owners and in-depth interviews with 30 business owners and 10

industry experts, all undertaken between February and May 2016. The target market is both new

businesses in their first year of operation and businesses that have been operating for 1–3 years.

Small businesses make a significant contribution to the Australian economy, and the ATO would like to assist this sector flourish and grow. The ATO want to understand how new small businesses develop their financial management knowledge, in order to support them (either directly or indirectly via their intermediaries) and help their businesses succeed.

The research found that new small businesses need to get the right resources, delivered from the

right source in a way they can quickly learn. The speed at which they can process information or

minimise the time that they have to invest in learning is a key requirement for new small businesses.

Therefore, all styles need to be accommodated for in any education initiative, as well as a range of

approaches for delivery. While new small businesses like online formats for their convenience,

because they can access them where and when they need to learn, they also like the personal

interaction of face-to-face formats.

The learning curve for a new business owner in their first three years is incredibly steep. Tax and

Super are only one small part of the business owner’s obligations. Depending on the industry or type

of business there may be a range of other regulations, operational requirements, and standards with

which they are learning to comply.

For those businesses able to afford it, tax agents and accountants are the key advisors relied on for

tax and super advice. Over two thirds (70% < 1 year; 72% 1–3 years) rely on their tax agent or

accountant, often for advice on or about tax and super.

Motivated to learn

Overall, most (89% < 1 year; 81% 1–3 years) business owners surveyed found that improving their

knowledge about business and financial management right now is important, with a quarter (23% <

1 year; 24% 1–3 years) nominating it as very important. Those who have owned a business for less

than 1 year were likely to find it even more important, with an average score of 7.6, compared to 7.1

out of a possible 10 for those who have owned a business between 1–3 years.

There is a need for educational support to increase the knowledge of tax and super requirements,

with between one third and a quarter of small business owners (31% < 1 year; 25% 1-3 years)

surveyed not understanding how financial management, including tax and super, works and not

feeling equipped to manage these areas of the business.


There is an opportunity to promote the advantages of investing in education of small to new

businesses on tax and super requirements that has mutually beneficial outcomes, as there is a

correlation between all aspects of capability and the financial state of the business: the more

competent and capable a business is, the better its financial state.

Motivation can be described as a state that energises, directs and sustains behaviour. Intrinsic

motivation refers to motivation to engage in an activity for its own sake. Of the business owners

surveyed who wanted to improve their knowledge about tax and super, the intrinsic motivators

identified were to avoid mistakes (53%), be better informed (50%), to feel more in control of their

business (21%) and to be able to manage some of their tax and super requirements themselves

(13%). The qualitative research revealed that when business owners were intrinsically motivated to

improve their tax and super knowledge, it was because it was in their nature to be challenged,

strategic, independent and to maintain control.

On the other hand, extrinsic motivation is promoted by factors external to the business owner. Of

the business owners surveyed who wanted to improve their knowledge, the extrinsic motivator

identified was to save money (18%). The qualitative research found the extrinsic motivation was

driven by a financial reward that would contribute to business opportunities and growth.

Generally, new small business owners are motivated to learn, yet they do not do so because there of

barriers such as time, costs, other priorities and lack of awareness. Qualitative research found that

often there are unrecognised knowledge gaps, and that learning is ad-hoc, in the moment and at a

crisis point. They are under financial pressure, time poor, trying to keep the business in control and

considering their work–life balance. Other barriers are the distractions of the everyday operation

and ongoing need to resource the business, making learning tax and super a low priority.


Educational preferences for new small business

Preferred provider

The preferred providers for tax and super training are accountants (79% < 1 year; 80% 1-3years),

followed by the ATO (75% < 1 year; 74% 1–3 years). However, there are perceptual barriers with the

accountants being a fee for service (what are they selling me?) and the ATO perceived as too general

and not specific to their business needs (but what does it mean for me?).

Figure 1 Preferred Providers

79%

75%

37%

27%

24%

23%

4%

80%

74%

34%

27%

21%

24%

5%

Accountant

ATO

A business support organisation in my localcommunity

An industry association or body

A private business education and trainingprovider

Other government department – local, state or federal

Other

Less than 1 year 1-3 years

Source: E2. I am now going to read out a number of possible providers of these types of services, can you select the top three providers you would most prefer to use for tax and superannuation education, or training? Base: owned for < 1 year (n=300), owned for 1-3 years (n=300)


Preferred method of delivery

The preferred method is “how” they want to learn. Courses, whether online (66% < 1 year; 65% 1–3

years) or face-to-face (59% < 1 year; 52% 1–3 years), were the preferred method for “how” business

owners want to build business and financial management knowledge.

Qualitative research found that small business owners liked the personal interaction of face-to-face

methods but finding the time to attend in person was difficult.

Figure 2 Preferred Methods

Most useful formats

This contrasts with the most useful delivery formats for education nominated by small business

owners. Online delivery was seen as the most useful by business owners, with online checklists and

procedures topping the list as very useful (61% < 1 year; 56% 1–3 years), followed by online tutorials

(60% < 1 year; 55% 1–3 years), websites (60% < 1 year; 55% 1–3 years) and online tools/calculators

(57% < 1 year; 54% 1–3 years.

Qualitative research indicated that an online format was far more convenient, because they can do

it where and when they need to learn.

Ways of learning

The diversity of learning journeys is as great as the diversity in the new small business population.

There are different business owner motivations, industry types, education backgrounds,

personalities and learning styles. The learning curve for new business owners in their first three

years is incredibly steep. Some gain more knowledge as time progresses, but most just learn the

66%

59%

53%

40%

38%

23%

1%

65%

52%

53%

41%

33%

18%

4%

Self-paced online training course

Face to face, classroom training courses

Webpages

Self-guided books/manuals

Videos

Phone consultations

None of these


Source: E3. And what would be your most preferred methods to build your business management and financial management knowledge? Again, please select your three most preferred. Base: owned for < 1 year (n=300), owned for 1-3 years (n=300)


minimal amount and rely on advisors or informal networks for the rest as they go along. They have

to learn very fast, usually situationally or in a moment of crisis. Those who have been in business

before say they do their research prior to starting up, because it was a big mistake not to do so the

first time. Those that establish a new business with limited knowledge are unlikely to be the ones

that seek out and gain more knowledge from key advisors.

Feeling under financial pressure and not confident

Not every new small business needs to improve their tax and super knowledge. However, those that do are under financial pressure.

Nearly half of the businesses surveyed stated they were under financial pressure (46% < 1 year; 48% 1–3 years). There is a correlation between the perceived financial state of the business and the confidence they had in their ability to manage tax and super tasks: the more financial pressure they were under the more likely they were to not feel confident in knowing about tax and super.

There is a need for educational support to increase the knowledge of tax and super requirements, with between one third and a quarter of small business owners (31%, < 1 year; 25%, 1-3 years) surveyed not understanding how financial management, including tax and super, works and not feeling equipped to manage these areas of the business. One in ten were not confident they were tax and super compliant (12% < 1 year; 9% 1–3 years) and that their business finances are well managed (12% < 1 year; 11% 1–3 years). Four in ten (40%) are not confident using accounting software to manage their business.

Moreover, about a fifth did not know how and where to get tax and super information for their business (23% < 1 year; 22% 1–3 years). It could, therefore, be beneficial for them to access professionals, such as accountants, tax agents and other business advisors. The majority of new small businesses did feel they were good or moderately good at doing this. However, some felt they were not so good (16% < 1 year; 14% 1–3 years).

There are three elements associated with efficacy or the confidence and ability to manage their tax

and super. If a business owner knows about accounting and bookkeeping, they are confident about

compliance, and if they are competent at accessing professionals they are less likely to need

educational support or feel under financial pressure.

Experience is a key determinant of whether there is a need for support. Those who have owned a

business before, or managed one, are more likely to say they feel confident and less likely to have

knowledge gaps. Industry experts1 said tax and super knowledge is particularly important in the

initial stages of starting the business. However, very few new business owners spend the time and

energy to invest in researching and structuring their business affairs to effectively manage their tax

obligations.

The qualitative research found that many new small businesses “didn’t know what they didn’t know” when it came to their tax and super obligations. Some business owners learnt the hard way by making mistakes.

1 Industry experts involved in this research were the Australian Chamber of Commerce and Industry, CPA Australia, the Council of Small Business of Australia, the SME association of Australia and Taxpayers Australia, as well as a small number of accountants and bookkeepers with new small business clients.


Key advisors

For those businesses able to afford it, tax agents and accountants are the key advisors relied on for

tax and super advice. Over two thirds (70% < 1 year; 72% 1–3 years) rely on their tax agent or

accountant, often for advice on or about tax and super. Most respondents in the qualitative research

reported being satisfied with delegating tax and super responsibility to their accountant. New small

businesses felt their role was to specialise in their business, just as an accountant specialises in

theirs.

While professionals were relied on for advice, business owners were sceptical when the advice led

to more work and more fees and this was seen to be in the interest of generating more income for

the professional. The cost of advice limited the amount of advice they could access from their tax

agent or accountant. Most said they would use them more, if they could afford it.

In contrast, the industry and expert stakeholders believe that new small business owners use

consultants or accountants in the wrong way. They are using these key advisory roles for compliance

tasks rather than strategic advice.

Government (unspecified) was a second formal form of support that businesses relied on for advice

(39% < 1 year; 31% 1–3 years). Qualitative research with business owners found that there are

perceptual barriers for the ATO for new small businesses when it comes to seeking advice and

assistance from the ATO. The role of the ATO as a regulator is a tension. During this qualitative

research phase, a number of small businesses remarked that they see the ATO as punitive and not

empathic to their needs, and therefore ATO advice is not perceived to be in their best interests. ATO

advice was often described as inconclusive, vague or just generally hard to understand.

The qualitative research strongly suggested that informal networks were important (particularly

those that did not have a fee for service), and where the advice was therefore perceived to be in

their best interest. Mentors were formal or informal but less likely to have fees for service with a

third of businesses relying on them often (36% < 1 year; 35% 1–3 years). Other informal supports

they often relied on included other business owners in similar lines of business who they didn’t

compete directly with, were in their supply chain, or who are acquaintances and peers (30% <1year;

25% 1–3 years).


Key findings

The qualitative and quantitative research provides both complementary and contrasting insights into the educational experience of new small businesses. The key conclusions are:

New small businesses are diverse and they have different financial management, including tax and super, education requirements. The owners’ level of competence and learning styles may vary dramatically. A tailored educational experience is required that addresses this diversity and complexity. A variety of practical learning aids need to be considered to assist in overcoming barriers such as a lack of time, as well as being practically based, convenient to access, and personalised.

The majority of the businesses surveyed found that improving their knowledge about

business and financial management right now is important (89% < 1 year; 81% 1–3 years).

Overall, most business owners (92% < 1 year; 84% 1–3 years) surveyed found that improving

their knowledge about tax and super right now is also important.

A significant proportion of new small businesses have a need for educational support, due to their limited knowledge and confidence in managing their tax and super obligations. They may need their knowledge gaps pointed out to them, as they may not self-identify the need to learn. First time business owners are likely to have greater needs and are less likely to seek advice from professionals. Specific areas where knowledge is particularly lacking are lodgement (BAS and tax returns), GST, understanding employer obligations (including superannuation for casual employees and withholding tax for contractors) super and cash flow management, and correct claiming (including FBT).

New small businesses are generally willing to learn, yet may not do so because of barriers such as time, costs, other priorities or a lack of awareness. Using the theories of motivation that underpin behavioural science to inform development of educational strategies will be more likely to assist small businesses commit to improving their knowledge. To motivate business owners to learn about tax and super, educational approaches should not focus only on extrinsic motivators such as paying less tax, having more surplus cash, or not having to pay fines or penalties, but should also appeal to strong intrinsic motivators, such as being better informed and feeling more in control of their business.

Tax agents and accountants are the preferred key advisors. The qualitative phase of the research revealed that for some small businesses there may be tensions around their fees, and the feeling that tax professionals may be providing advice that will lead to more work and further fees to be paid. The ATO are the relevant provider because they hold authority on the content. However, tensions around being the regulator and not being empathic to the needs of the business owner – or working in their best interest – creates a perceptual barrier. Therefore, the positioning of who is delivering educational support (and why) will be important in the messaging of any initiative developed.

Most business owners in the qualitative research consider themselves to be financially competent (they know the basics to get by) but what they presume they don’t know are the “tricks”, or rather the strategic knowledge of the tax system to get it to work better for them and their business. There is an opportunity to align the goals of accountants and small business owners, who both want to work on tax strategies to plan and grow the business. However, barriers such as time and money have meant the relationship has been transactional and based on compliance tasks. Aligning the two goals would increase business owner’s knowledge and use of professionals for the strategic advice to grow and strengthen new small businesses.


Educational methods should recognise preferences for self-paced online training courses and face-to-face classroom training courses. They should also provide practical learning aids, such as online checklists and procedures, online tools and calculators, and case studies and examples. Educational methods should feel personal, even if delivered online. The delivery must be “easy and efficient” to minimise cost, time and the cognitive effort required to learn.

Considerations

The following points are important considerations to improve the educational experience for new small business owners:

1. Design a knowledge system that minimises the cognitive effort, cost and time involved in searching for information. The system should be designed in such a way that it directs new small businesses to trustworthy and accurate resources. Taking such an approach will enable them to learn efficiently.

2. Assist them to self-identify their need to learn and motivate them to learn with communications informed by behavioural science.

3. Deliver support with empathy that is personalised to their educational needs. 4. Provide a range of learning formats and methods, with an emphasis on practical, real world

support tools and case studies, allowing for the convenience of online formats as well as more personalised, face to face options, so new small business owners can learn in their own way.


2 Project background and methodology

Results have been analysed for two populations of new small business:

(1) businesses owned for less than 1 year (2) businesses owned for 1–3 years.

When differences between the two populations are statistically significant, this is clearly stated.

When it is not, the reader should assume that the differences are not significant. An equal

proportion of businesses owned less than one year and 1–3 years were surveyed, in both the

qualitative research and the quantitative research. The rationale for investigating these two groups

of new small business was based on, 1) capturing very new businesses with less than 1 year in

operation, and 2) capturing those that were still substantially new (1-3 years) but had a little more

experience and would be able to articulate their issues while starting their business, and the choices

they made, with the benefit of hindsight.

Survey research collects subjective data, so where behaviours are discussed in this report they are

stated behaviours by the participants and not objective data on actual behaviour. Quantitative

research is subject to survey error.

Ethnographic and qualitative research provides rich insights that explore key themes, but due to

small samples are not representative of the whole population.

Due to rounding of decimals, the reader might find that some bar charts displaying percentages do

not equal exactly 100.

2.1 Project aim The research will provide an evidence base to inform the design of an integrated education strategy

for the new small business segment. Research results may also be used in the future, to track key

monitoring questions about new small business tax and super education experiences.

By ‘education experience’ the ATO mean something beyond increased awareness of tax and super

requirements. Rather, the ATO mean building client understanding of what they need to do, why

they need to do it and how to do it. Ideally, an education experience should position them to be able

to act – whether they choose to undertake tax and super tasks themselves or use a tax professional

to undertake some or all of these tasks.

The results of the research need to provide information to help the ATO pre-empt client needs, and

build in prompts to help them access the right resources at the right time and in their preferred

ways.


While this research focuses on financial management education (including tax and super), the results

may be useful across whole of government agencies that provide touch points for small business

(e.g. Department of Industry, ASIC, Fair Work Ombudsman, state government business websites and

local councils).

The target market for this research is both businesses in their first year, as well as businesses 1–3

years old.

2.2 Methodology Figure 3 below is an overview of the research design.

Figure 3 Research Design

2.2.1 Qualitative research A qualitative ‘discovery and learning’ phase to explore and discover key issues, obtain detailed and

full answers to each critical question and enable the research team to frame up the instruments for

use in the next stage, was conducted between the 15 February and the 16 March 2016. This

included interviewing 30 new small business owners and 10 industry and stakeholder experts.

The qualitative research was critical in this study given the extent of understanding the ATO is

seeking in relation to the experience and knowledge which new small business owners had before

and during the early stages of their business. The qualitative research was used to develop an

effective, comprehensive and relevant survey instrument using appropriate close-ended code

frames.

Recruitment of business owners was undertaken by Ipsos’s fieldwork and data collection company, I-

view, from a business sample sourced from Dunn and Bradstreet. Dunn and Bradstreet compile lists

from a variety of sources, including the Australian Business Register, publically available databases,

media events, articles, advertising, trade payments data, and business analysis. Recruitment of the

industry and expert stakeholder was undertaken by I-view from a list formed in consultation with

the ATO. Senior researchers from Winangali and Ipsos undertook the qualitative interviews in face-


to-face settings with new or recently new small business owners, and over the telephone for

industry and expert stakeholders.

Who participated in the qualitative research?

Figure 4 displays the industries represented by the 30 businesses recruited for the qualitative

research.

Figure 4 Qualitative Sample by Industry

Industry n= Accommodation and food services 2

Administrative and support services 2

Agriculture, forestry and fishing 1

Construction 3

Education and training 1

Electricity, gas, water and waste services 1

Health care and social assistance 1

Information media and telecommunications 9

Manufacturing 2

Other services 3

Professional, scientific and technical services 2

Rental, hiring and real estate services 1

Retail trade 2

Total 30

Quotas were set on the length of time in business, to ensure adequate representation of businesses

under 1 year to provide a sufficient understanding of this group. It should be noted that this is

disproportional to the overall proportion of new businesses less than 1 year, which are fewer than

the number of small businesses in Australia under 3 years old. Interviews were conducted with

business owners who had been in business < 1 year (n=14) or 1–3 years (n=16). Interviews were

conducted with business owners who had been in business before (n=21) or for the first time (n=9).

Figure 5 displays the locations where interviews were conducted.

Figure 5 Qualitative Sample by Location

Location n= Sydney 6

Melbourne 6

Brisbane 5

Perth 5

Toowoomba 4

Darwin 4

Total 30

The in-depth interviews (IDIs) were conducted at the place of business to make the research process

as convenient as possible for them, but also to add an ‘ethnographic’ layer to make observations or

to review materials/resources on hand and any other items the business owner may deem relevant

and willing to share. This ‘ethnographic’ layer enabled the research to gain more immersion to


obtain a greater level of empathy and understanding regarding not just the business owner but also

the business itself. Each IDI took between 1 and 1½ hours depending upon how much time the

business owner had available. All IDIs were conducted by a senior researcher. Business owners were

reimbursed $120 for the provision of their time for this research.

Telephone interviews were conducted with industry experts from The Australian Chamber of

Commerce and Industry, CPA Australia, the Council of Small Business of Australia, the SME

association of Australia and Taxpayers Australia, and five accountants and bookkeepers with new

small business clients.

The telephone interviews with these industry experts took around 45 minutes to complete,

depending upon how much time the representative was willing to provide. Figure 6 displays the

industry expert interviews conducted in the qualitative research.

Figure 6 Qualitative Sample by Stakeholder Industry

Industry n= Australian Chamber of Commerce and Industry 1

Council of Small Business Australia 1

CPA Australia 1

SME Association of Australia 1

Taxpayers Australia 1

Businesses specialising in small business accounting / bookkeeping 5

Total 10

2.2.2 Quantitative research The quantitative ‘measurement’ phase was undertaken to determine the extent of the issues and

learnings discovered through the qualitative phase to enable the ATO to appropriately prioritise and

plan the actions they would take as an outcome to this research. Telephone interviews were

conducted with 600 businesses, between 17 May and 30 May 2016. The survey was developed from

the qualitative research, and approved by the Australian Government’s Statistical Clearing House.

Overall, the average interview length was 15 minutes.

The sample was provided by the ATO. After cleaning the records for completeness, the sample was

randomised before selection. An even number of those having owned the business for less than 1

year (n=300) or 1–3 years (n=300) was selected to ensure sufficient sample in both groups for

analysis. Businesses < 1 year are therefore over represented in the sample, compared to the overall

population of new small business (0 - 3 years), due to this sample selection, reflecting the focus of

this research.

The results have been provided for each cohort in Section 3 and not combined for this reason. No

other specific sub-groups were targeted. Figure 7 to Figure 11 displays the proportion of businesses

surveyed across a number of characteristics.


Figure 7 Characteristics of the sample

SQ1. Approximately how many years in total has this business been trading including before

you owned the business? None 5

Less than 1 year 46

1–3 years 45

More than 3 years 4

Base n 600

The majority of the business owners surveyed had limited prior business experience. Their breakup

included:

86% first time business owners

74% had not managed a business prior to this one

92% had not been an employee in the business before owning it.

Figure 8 Prior Business Experience


Figure 9 Industry Sector

15%12%12%

9%8%

7%6%

6%5%

5%4%

3%3%2%

2%1%1%1%1%1%

Other services

Construction

Health care and social assistance

Retail trade

Arts and recreation services

Professional, scientific and technical services

Accommodation and food services

Information media and telecommunications

Education and training

Transport, postal and warehousing

Agriculture, forestry and fishing

Financial and insurance services

Electricity, gas, water and waste services

Manufacturing

Administrative and support services

Wholesale trade

Rental, hiring and real estate services

Mining

Pubic administration and safety

Refused

Source: SQ6. What is the main industry sector in which you operate?Base n = 600


Figure 10 Businesses owned for < 1 year

SQ3. What was your approximate turnover for this financial year 2014-2015? %

Less than $75,000 98

$75,000 – $2 million 2

SQ4. How many people do you employ?

0 employee 64

1 employee 32

>= 2 employees 4

SQ5. Which of the following best describe the ownership structure?

Sole owner/manager 80

Contractor 13

Partnership 3

Family owned company or trust 1

Employee owned company, that is all shareholders work within this business 1

Franchise 1

Refused 1

Base n 300

Figure 11 Businesses owned for 1–3 years

SQ3. What was your approximate turnover for this financial year 2014-2015? %

Less than $75,000 89

$75,000 – $2 million 11


0 employee 59

1 employee 31

>= 2 employees 10

SQ5. Which of the following best describe the ownership structure?


Contractor 12

Partnership 5


Employee owned company, that is all shareholders work within this business 1

Franchise 1

Refused 1

Base n 300


3 Research findings

3.1 Motivated to learn

3.1.1 Improving knowledge about business and financial management

The majority of the small businesses surveyed stated that improving their knowledge about business

and financial management right now is important (89% < 1 year; 81% 1–3 years).

Figure 12 Intent and inclination about financial management right now – business owned < 1 year

Figure 13 Intent and inclination about financial management right now– business owned 1–3 years

10% 23% 66%

Not Important (1-4)

Somewhat Important (5-7)

Very Important (8-10)

19% 24% 57%

Not Important (1-4)



Source: D1. How important is it to improve your own knowledge about business management and financial management right now on a scale from 1 to 10 with 1 being Not at all Important and 10 being Very Important? Base: owned < 1 year (n=300), owned for 1-3 years (n=300)


3.1.2 Improving knowledge about tax and super Overall, most business owners (92% < 1 year; 84% 1–3 years) surveyed stated that improving their

knowledge about tax and super right now is important. Those who have owned a business for < 1

year were likely to find it even more important with an average score of 7.6 compared to 7.1 out of a

possible 10 for those who have owned a business between 1–3 years. The qualitative research found

that the need to improve their tax and super knowledge was driven by decision-making and strategic

planning.

“Need to be able to make good business decisions.” WHS Services

“Businesses need to know and understand how to minimise tax problems.” Importer

Figure 14 Intent and inclination about tax and super right now – business owned < 1 year

Figure 15 Intent and inclination about tax and super right now - business owned 1–3 years

8% 33% 59%

Not Important (1-4)



16% 31% 53%

Not Important (1-4)



Source: D4. How important is it to improve your own knowledge about tax and super right now on a scale from 1 to 10 with 1 being Not at all Important and 10 being Very Important? Base: owned < 1 year (n=300), owned for 1-3 years (n=300)


3.1.3 Motivators for learning Motivation is described as a state that energises, directs and sustains behaviour. Intrinsic motivation

refers to motivation to engage in an activity for its own sake. On the other hand, extrinsic motivation

is motivation promoted by factors external to the business owner.

Extrinsic motivation may have a powerful influence on business owners, but it may also actually

reduce intrinsic motivation according to academic literature. Therefore, making the action to learn

tax and super only about saving money or avoiding penalties could potentially reduce the appeal of

the learning task because it does not play to the stronger intrinsic motivators.

“It’s not just about being compliant – I would be more interested if it meant my business would improve” IT services

The 512 survey respondents (85%) who found it somewhat to very important to improve their knowledge about business and financial management right now (score >=5 on a scale from 1 to 10) nominated the following reasons:

• to be better informed (60%) (intrinsic motivator)

• to feel more in control of their business (42%) (intrinsic motivator)

• to be compliant or avoid mistakes/troubles (16%) (extrinsic motivator)

• to save money (15%) (extrinsic motivator)

• to be able to do some of it themselves (12%)

• to grow their business (8%).

The 529 survey respondents (88%) who found it somewhat to very important to improve their

knowledge about tax and super right now (score >=5 on a scale from 1 to 10) listed the following

reasons:

• to make sure they don’t make mistakes (53%) (extrinsic motivator). Those businesses owned

for less than 1 year (60%) were more likely to find it important to make sure they don’t

make any mistakes

• to be better informed (50%) (intrinsic motivator)

• to feel more in control of their business (21%) (intrinsic motivator)

• to save money (18%) (extrinsic motivator)

• to be able to manage some of their tax and super requirements themselves (13%).

Source: D3. You indicated that it is important to improve your own knowledge about business management and financial management. Why is it important? Base n = 512

Source: D6. You indicated that it is important to improve your own knowledge about tax and superannuation. Why is it important? Base n = 529


3.1.3.1 Why they want to learn Intrinsic motivation refers to behaviour driven by internal rewards. The qualitative research revealed

that intrinsic motivators are more likely to be driving business owners to learn about tax and super

or to improve their financial competency. There are many different reasons why people decide to

start a new business or to be a small business owner. Those owners interviewed in the qualitative

research, who were passionate and entrepreneurial, also loved to be challenged and take on a

challenge. Some were ideas people and constantly like to inform themselves so they can improve

and grow their business. Some really want to be strategic and do what they can to effectively

manage their tax obligations or create new opportunities to invest in their business. Examples

include new plant, equipment, staff or stock. Some enjoy the thinking and planning involved in

strategic goal setting and are by nature entrepreneurial. Non-compliance or some other mistake

may prompt the business owner to think about educating themselves on tax and super matters. This

fear of making mistakes or avoiding troubles with the ATO is also an intrinsic motivation to learn.

Extrinsic motivation can have a powerful influence on behaviour through external rewards or

punishment. Financial rewards such as paying less tax and having more surplus cash - or not having

to pay fines or penalties - are the main extrinsic motivators for small businesses. However, extrinsic

motivation can sometimes actually reduce intrinsic motivation according to behavioural

psychologists. For example, saving money was seen as the reward for putting in the effort to be

challenged, be in control, be informed or be more strategic, but not as the reward for learning.

Therefore, making the action to learn about tax and super only about saving money could

potentially reduce the appeal of the task because it does not play to the stronger intrinsic motivators

such as “being in control”, “being informed” or “being strategic”.

3.1.3.2 Barriers to learning While many new small business owners are motivated to learn, they may not do so because of

various barriers to learning.

For some, there may be ignorance of the need to learn. They are unconsciously incompetent. They

are not aware of the need to learn, which is often only prompted when they fail. They are distracted

by the everyday operation and ongoing need to resource the business. They are time poor, trying to

keep the business in control and conscious their work life balance is slipping away.

The 88 survey respondents (15%) who were not interested in learning more about business and

financial management right now (score 1-4), nominated the following reasons:

• it is not important right now (47%)

• feel competent in these areas and don’t think they need to learn more (26%)

• have an external consultant who manages these areas (13%)

• don’t have time to invest in learning about these issues (11%)

• just not interested in this area of their business (10%).

Source: D2. You indicated that it is not important to improve your own knowledge about business management and financial management. Why are not interested in learning more about these areas? Base n = 88


The 71 survey respondents (12%) who were not interested in learning more about tax and super

(score 1-4) listed for the following reasons:

• it is not important right now (42%)

• have an external accountant/financial consultant who manages all these areas (23%)

• feel competent in these areas and don’t think they need to learn more (20%)

• think their business is too small (13%)

• don’t have time to invest in learning about these issues (11%).

Whilst most new small business owners are motivated to learn – and the ideal time to learn is before

they need to know it – they do not do so because of various barriers. Qualitative research found

that:

Business owners focus on the legal and operational aspects, marketing or business

development rather than tax and super compliance or tax requirements.

They are distracted by the everyday operation and ongoing need to resource the business.

They are time poor, trying to keep the business in control and conscious of their work life

balance slipping away.

Often there is a lack of awareness in the need to learn; that is, they are unconsciously

incompetent.

Once their business is underway and they start interacting with the ATO they find the need to learn

becomes more apparent and the motivation for learning increases.

The qualitative research found that business owners were reluctant to trust the various sources of

information or education. The perception is that these sources of information are not aligned with

their own goals or in their best interest. For example, a seminar sponsored by an accounting

software company is to sell their software, the ATO want them to pay tax, or the accountant wants

to deliver more services to get more fees. The information is also available in abundance and there

are many places to learn. Small businesses find it overwhelming and difficult to sort through and find

what will be good for them.

3.1.3.3 Early learning Business owners that are under financial pressure and feel incompetent would benefit from

improved understanding of tax and super requirements. Industry experts said this was particularly

important in the initial stages of starting the business. Nevertheless, very few spend the time and

Source: D5. you indicated that it is not important to improve your own knowledge about tax and superannuation. Why are not interested in learning more about these issues? Base n = 71


energy to invest in researching and structuring their business affairs to manage their tax obligations

effectively prior to commencing the business. Most of the business owners in the qualitative

research did not do any tax planning or develop a tax strategy based on specific business and

ownership objectives. Secondly, they rarely implemented the appropriate administration and

systems, nor consulted professionals to support them.


3.1.4 Balancing costs and benefits The qualitative research revealed key costs and benefits to improving tax and super knowledge,

summarized in the diagram in the figure below:

Figure 16 Influencers and Barriers for learning

Benefits Costs

Lack of trust of the source of information / education in

their best interests.

Too many places they can learn. Time to sort through superfluous information to

learn the specifics.

Lack of awareness of the need to learn.

Distracted by the everyday operation and ongoing need

to resource the business.

Love to be challenged, and take on a challenge.

Creates opportunities to improve business (cash flow /

assets / investment / more staff).

Financial (more money / no fines or penalties).

Gain from increasing their knowledge has to be

“strategic” - because that will improve their business.


3.2 Educational preferences

3.2.1 Preferred method to build knowledge The preferred method is “how” they want to learn. The most preferred method for building

business and financial management knowledge nominated were courses, whether online (66% < 1

year; 65% 1–3 years) or face-to-face (59% < 1 year; 52% 1–3 years). Qualitative research found that

new small business owners liked the personal interaction of face-to-face formats but finding time to

attend was difficult. Self-directed methods, such as webpages (53% 0-3 years) and self-guided

books/manuals (40% < 1 year; 41% 1–3 years) were less preferred overall.

Figure 17 Preferred Methods to build knowledge

66%

59%

53%

40%

38%

23%

1%

65%

52%

53%

41%

33%

18%

4%

Self-paced online training course

Face to face, classroom training courses

Webpages

Self-guided books/manuals

Videos

Phone consultations

None of these


Source: E3. And what would be your most preferred methods to build your business management and financial management knowledge? Again, please select your three most preferred. Base: owned < 1 year (n=300), owned for 1-3 years (n=300)


3.2.2 Usefulness of various learning aids for building knowledge New small businesses indicated a strong preference for practical, action based learning aids that

they can access easily, when considering the perceived usefulness of the various learning aids.

Overall, online delivery was nominated by new small business owners as a very useful way to receive

support to improve their business and financial management knowledge, including tax and super.

Online checklists and procedures topped the list (61% < 1 year; 56% 1–3 years), followed by online

tutorials (60% < 1 year; 55% 1–3 years), websites and online tools/calculators. Emails were also seen

as very useful (47% < 1 year; 46% 1–3 years).

Qualitative research indicated that an online format was far more convenient than face-to-face

formats, because they can do it where and when they need to learn, however small business owners

liked the personal interaction of face-to-face formats.

Figure 18 Most Useful to build knowledge – businesses owned < 1 year

10%

9%

9%

9%

14%

19%

25%

26%

27%

35%

34%

28%

30%

31%

33%

39%

39%

36%

38%

38%

38%

41%

61%

60%

60%

57%

47%

42%

39%

36%

35%

27%

25%

Online checklists and procedures

Online tutorials accessible any time

Websites

Online tools and calculators

Emails with important and relevant information

Case studies and examples

Short face to face seminars

Live webinars with question and answersessions

Small business expos and events

Networking events e.g. business breakfasts

Community events

Not Useful (1-4) Somewhat Useful (5-7) Very Useful (8-10)

Source: E1. On a scale of 1 to 10, how useful do you think the following would be to you to build your business management and financial management knowledge, including tax and super, where 10 is Very useful and 1 is Not at all useful. Base: owned < 1 year (n=300),


Figure 19 Most Useful to build knowledge - business owned for 1–3 years

11%

14%

13%

11%

18%

26%

26%

31%

38%

31%

39%

33%

31%

32%

35%

36%

37%

38%

38%

37%

44%

41%

56%

55%

55%

54%

46%

37%

36%

31%

26%

25%

20%

Online checklists and procedures

Online tutorials accessible any time

Websites

Online tools and calculators

Emails with important and relevant information

Case studies and examples

Short face to face seminars

Live webinars with question and answersessions

Networking events e.g. business breakfasts

Small business expos and events

Community events

Not Useful (1-4) Somewhat Useful (5-7) Very Useful (8-10)

Source: E1. On a scale of 1 to 10, how useful do you think the following would be to you to build your business management and financial management knowledge, including tax and super, where 10 is Very useful and 1 is Not at all useful. Base: owned for less than 1 year (n=300), owned for 1-3 years (n=300)


3.2.3 Preferred providers The preferred providers for tax and super training are accountants (79% < 1 year; 80% 1-3years),

followed by the ATO (75% < 1 year; 74% 1–3 years). Other providers are much less preferred with

only quarter to a third of businesses preferring them to provide training. The qualitative research

identified that new small businesses perceived the ATO as the authority on tax and super

requirements and therefore in a position to provide technical advice and training. However, tensions

exist and they may not perceive the advice or training to be in the best interests of their business.

There is a perception that the training will be focused on compliance and not strategic enough to

manage their tax obligations effectively.

Figure 20 Preferred Providers

3.2.4 Sourcing information There was a sentiment in the qualitative research that owners weren’t sure who they could

approach with their questions around tax and super requirements. For many, the first step

whenever they encounter a question or need information is to go to search on Google. What comes

up in their search is extensive so they have to click through different sources of information to find

something that’s easily digestible. The more information there is and the more complicated this is

presented, the more frustration arises for owners and they keep searching for something easier to

understand.

If a Google search was of no help, some of the respondents reported asking their accountant for

help. Most felt confident that they could ask the right questions, but could not specify where this

knowledge came from. Some also took the information they found from their Google search to their

accountant to check if they had received the right information and that it was relevant to them.

79%

75%

37%

27%

24%

23%

4%

80%

74%

34%

27%

21%

24%

5%

Accountant

ATO

A business support organisation in my localcommunity

An industry association or body

A private business education and trainingprovider

Other government department – local, state or federal

Other


Source: E2. I am now going to read out a number of possible providers of these types of services, can you select the top three providers you would most prefer to use for tax and superannuation education, or training? Base: owned < 1 year (n=300), owned for 1-3 years (n=300)


In the qualitative research, examples where new small business owners self-educated and found the

experience positive were:

o Anywhere real examples or case studies

o Flow-chart style checklist outlining exactly what needs to be done from a finance/tax

point of view at each stage of the process, for each type of enterprise

o Where support - either face-to-face visits, or via phone calls or online chats - was

set-up with each person outlining requirements up front.

3.3 Key advisors

3.3.1 Who do business owners rely on for advice? Overall, small business owners rely mostly on tax agents and accountants among their formal and

informal networks.

New small business owners (< 1 year) rely most often on tax agents and accountants for advice

(70%). Relied on often to a lesser extent were government (39%) and business advisors, coaches or

mentors (36%) followed by acquaintances and peers (30%), and bookkeepers (30%).

Figure 21 Support and Connections – business owned < 1 year

Source: C1. The next few questions will help us to learn how businesses develop their knowledge about business management and financial management, including tax and super, through a variety of formal and informal networks. For each person please indicate on a score of 1 to 10 where 10 is always rely on them for advice and 1 is never rely on them for advice about tax and super. Base: owned < 1 year (n=300),

13%

21%

29%

33%

35%

41%

43%

60%

17%

49%

32%

32%

41%

29%

34%

22%

70%

30%

39%

36%

24%

30%

23%

18%

Tax agent / accountant

Other business owners, acquaintances or peers

Government

Business advisor, coach or mentor

Friends or family members

Bookkeeper

Associations, industry bodies or the chambers ofcommerce etc.

Other owners in my business

Rarely (1-4) Sometimes (5-7) Often (8-10)


Small business owners (1–3 years) also often rely on tax agents and accountants (72%). To a lesser

extent, business advisors, coaches or mentors (35%), government (31%), and bookkeepers (30%)

were also relied on often for advice, followed by acquaintances and peers (25%).


Figure 22 Support and Connections – business owned 1–3 years

Several statistical differences were noted:

Formal Networks

Those who have a turnover of $75k–$2m rely on a tax agent/accountant more for advice.

Those who have two or more employees are more likely to rely on a tax agent/accountant, a

bookkeeper and other owners in their business for advice.

Those with a postgraduate university degree are more likely to include the government in

their network for advice.

Those who have managed a business before are more likely to turn to a tax agent or

accountant for advice.

Informal Networks

Those who are 21 to 29 years old are more likely to turn to friends or family members and

other business owners/peers for advice.

Those whose business structure is a partnership are more likely to rely on other owners in

their business for advice.

Those who are first time business owners are more likely to turn to friends or family

members for advice, while those who have owned or managed a business before rely on a

tax agent or accountant for advice.

9%

28%

34%

36%

41%

42%

47%

64%

19%

48%

32%

33%

37%

29%

31%

19%

72%

25%

35%

31%

22%

30%

21%

17%


Other business owners, acquaintances or peers


Government


Bookkeeper

Associations, industry bodies or the chambers ofcommerce etc.



Source: C1. The next few questions will help us to learn how businesses develop their knowledge about business management and financial management, including tax and super, through a variety of formal and informal networks. For each person please indicate on a score of 1 to 10 where 10 is always rely on them for advice and 1 is never rely on them for advice about tax and super. Base: owned < 1 year (n=300), owned for 1-3 years (n=300)


There is a correlation between the financial state of a business and the type of advice

networks an owner relies on: the better the financial state, the more owners rely on friends

or family members and to other business owners, acquaintances or peers for advice.

Most respondents in the survey reported being satisfied with delegating tax and super responsibility

to their accountant. The only way they would consider taking on more responsibilities themselves

would be if the accountant became too expensive to afford. Others felt they didn’t have time to be a

tax or super expert nor did they want to be an expert. They felt their role was to specialise in their

business just as the accountant specialises in theirs.

“Being an accountant is not my job.” Auto Electrician

Some business people use friends who work in these professions and obtain fee-free advice. Others

felt more confident when the accountant took care of lodging tax returns or doing financial

reporting, because they wanted to prevent making mistakes and “the accountant knows what he’s

doing”.

“See here is my example. I have printed out all this information on Super

from ATO and highlighted the bits that I wanted to ask [accountant] then

we sort it out together.” Administration Services

Mentors were also desired because they did have the interest of the business at heart and not a

separate agenda. The qualitative research strongly suggested that the role of a mentor provided

reassurance and trustworthy advice in their best interest. Mentors were formal or informal but less

likely to be fee for service. Some informal mentors were other business owners in similar lines of

business who didn’t compete directly, were in their supply chain or were friends and family. Formal

mentors may have been assigned through programs by industry or peak bodies. Mentors were

trusted, as they were perceived to have an interest in making sure the business was successful and

were impartial.

“We have a good group of business here that do the same thing, we

compete but we also help each other out. So if someone finds out about

something or makes a mistake on tax they let everyone know so we don’t

all do the same.” Energy Services Informal networks are always important because they find out information incidentally from others

who are in the same boat as them. Some owners talked about hearing things at industry events and

then going to their accountants to make changes or fix things so they don’t make the same mistakes

as their peers. The advice is always seen to be more trustworthy because it is from someone who

has an understanding about how important it is to be compliant with tax and super.

Only 3% of the businesses surveyed receive no regular support from any of the listed

organisations/people. Some business owners in the qualitative research who do not connect with

other businesses, or do any networking, or could not afford to use accountants, rely on the

information from the ATO website to educate themselves.


3.3.2 Not getting the most out of the professionals Business owners in the first three years are commencing new relationships with accountants,

lawyers, banks, and the ATO. Trust in those relationships may take time and business owners

sometimes perceive a conflict of interest by parties who may have a misalignment of goals or are not

working in their best interests. Fee for service or cost is the tension when using professionals. The

business owners feel that their tax professional is often providing advice that will ensure more work

needs to be done, resulting in more fees to be paid. Often they simply don’t want to or can’t afford

to use them.

Having an accountant or planning on hiring one was very common in the qualitative research;

however, new small businesses are not getting the most out of them when they do engage these key

advisors. Most new small businesses felt their skills were best utilised in the delivery of their

products or services and not on super or tax expertise. The focus from a small business owner is that

they know they have to pay tax, but they want to minimise the tax they pay so they can maximise

opportunities in their business. The perception of industry experts is that the level of knowledge

varies greatly, but generally small businesses are not always equipped to meet compliance let alone

effectively manage their tax obligations strategically to position their business for growth.

“If you want a ruling, it will cost you money and you’ll never get the result

you want anyway.” Male, Importer Experts interviewed stated that often when a business is at crisis point they have to come in and fix

the problems, or in their words - “to clean up the mess”. The industry and expert stakeholders

believe that new small business owners are using consultants or accountants in the wrong way. They

are using these key advisory roles for compliance tasks rather than strategic advice. If new small

business owners were more competent in compliance, they could use their key advisors to help

them create a strategic advantage. They simply don’t want to (or perceive they can’t afford to) pay

for strategic advice. They don’t get strategic advice early enough to get the structure of their

business right for their tax needs, and then seldom change because it is costly to change.

Accountants interviewed said they would prefer to be doing strategic work than the compliance

work as it was far more challenging and satisfying, and they too take enjoyment in seeing their

clients flourish and succeed.

There is a common goal not realised between the two parties. The industry experts interviewed

would prefer to be used for more strategic purposes, rather than just the transactional or

compliance tasks; while the business owners interviewed really wanted to be more strategic but had

no tax planning or strategies to effectively manage their tax obligations.

To achieve this common goal requires either investment in professional fees (pay for all the advice

both compliance and strategic) or invest in competence with tax and super (only have to pay for

strategic advice because compliance is taken care of by the business). There is an opportunity to

promote the advantages of investing in education of small to new businesses on tax and super

requirements that has mutually beneficial outcomes.


3.3.3 Perceptual barriers with the ATO hinders learning Qualitative research with business owners found that there are perceptual barriers for new small

businesses when it comes to seeking advice and assistance from the ATO. The role of the ATO as a

regulator is a tension. New small businesses see the ATO as the punitive and not empathic. They do

not look to the ATO for advice but rather for clarifying the rules and regulations. There are also

perceptual barriers with the ATO as an educator because they are not perceived to make it easy, be

helpful or provide learning in their preferred manner.

“Talking to others who have empathy for what you are doing is important.

They get that you have to put food on the table for your family and make

sure the staff’s kids are fed too. Being accountable and making decisions is

hard and you want to get it right. I don’t think a bunch of public servants

with their pay cheque at the end of the week get us, so it’s good to talk to

other owners at [industry group].” Auto Electrician

“We know we have to pay tax. We just don’t want to pay more than our

share. The ATO need to be seen as helpers not policemen.” Business Services There are many reasons small businesses are anxious about asking the ATO for business/tax and

super advice, these include:

The ATO is good for obtaining facts and figures as well as specific guidance around what you can claim or not claim, but is not at all useful for strategic business management;

Complex issues may require rulings and interpretation and these will always be made with a view of maximising tax revenues rather than help a business keep cash in the business to fund growth. Examples:

o Rules around issuing share options as part of a salary package hold back small

businesses. Directors may have to forgo income for shares but then still have to

pay tax on shares even without receiving an income/cash.

o Rules around annual superannuation contribution limits and rules around

contractors and superannuation payments; confusion around when rules apply

to contractors and when they don’t.

o FBT and R&D are areas of “fuzziness” that seem to confuse new small business

owners.

“Not sure the ATO even wants me to know this because it gives me

an advantage.” Tech Services There was no clear point of contact for obtaining advice on more complex issues for

some new small businesses. The website is easy to use and sufficient to look up answers to simple queries, and the portal is easy and user-friendly for submitting BAS and returns.


However, new small businesses are not sure where to go when they have a query that is more complicated and requires a broader and deeper level of interpretation and advice;

Actually ringing the ATO call centre is perceived to be a “fate worse than death” and not something most business owners have the time or patience to deal with. There is no awareness of any particular business advisory hotline that can be contacted or any way to interact with the ATO other than via the call centre or via the website.

The perception that the ATO will use any queries against the owner or not provide advice that helps. Asking questions could lead to investigation.

“Don’t ask the ATO, you’ll be making a mountain out of a molehill,”

Importer

“You’ll be backing yourself into a corner if you go to the ATO as it

may raise a flag you don’t want to raise.” Importer

“The ATO is a stickler for detail and abide by the rules religiously

with no special cases,” Importer ATO information seems ambiguous. It is not simple to find the one answer, and business

owners do not want to read all the information – process it – to work out an answer. Owners

prefer answers tailored to their situation instantaneously. They are not interested in

learning for the sake of learning because time is precious. They do not want to waste time

on things they don’t need to know until later. They only want to focus on what they need to

know right now.

Current ATO delivery is not seen as cost effective, simple or efficient, with suggestions that

there needs to be something like the Tax pack but for businesses.

“Lack of real support from ATO. Learning about tax is a cost to your

business - the time needed to find out what you need to know is a

cost, the time and training costs associated with your staff,

specifically book keepers, is a cost to the business, costs the business

to get advice from accountants/professionals/experts.” WHS Services


3.4 Learning journey The diversity of learning journeys is as great as the diversity in the new small business population.

There are different business owner motivations, industry types, education backgrounds,

personalities and learning styles.

3.4.1 Learning curves The learning curve for a new business owner in their first three years is incredibly steep. Tax and

Super are only one small part of the business owner’s obligations. Depending on the industry or type

of business there may be a range of other regulations, operational requirements, and standards they

are learning to comply with. If a lot of planning has been done prior to the establishment of the

business, or it is an existing business that has been acquired, the learning may not be as demanding.

Some gain more knowledge as time progresses, but most just learn the minimal amount and rely on

advisors or friends and family for the rest as they go along. They have to learn very fast, usually

situational or in a moment of crisis. Those who have been in business before say that they do more

research now prior to start up because they found out it was a big mistake not to do it the first time.

Those that establish a business with limited knowledge are unlikely to be the ones that seek and

gain more knowledge. These business owners could be described as unconsciously incompetent and

will learn when prompted by making a mistake or by failure.

A graphical presentation of a learning curve, which expresses the increase of learning (knowledge or

proficiency) with experience on a map, may be used to describe the learning journey. The vertical

axis is how much they know or learn and the horizontal axis is experience (time or longevity). The

blue line is what they actually know. For one business owner who learns in a series of crisis moments

the curve may be erratic, with knowledge increasing, decreasing or levelling out over time. A

number of different learning journeys can be theorised from the qualitative research.

Business owners in the qualitative research said they learnt when they were at a crisis point. Issues

are attended to as they come up, and are at times “a complete surprise” and there is little

awareness that a knowledge gap exists.

Learning by doing or ‘in the moment’ of performing a task was the most common reflection in the

qualitative research by business owners, but very few could recall specific sources of information or

more formal training/education activities. Every new learning experience is done ad hoc and out of

context, so there is rarely opportunity to build on existing knowledge or to expand a knowledge

base.

The unconsciously incompetent are not aware that they do not have knowledge, or are not aware of

what they do not know. Therefore, their perception of their knowledge is different to their actual

knowledge. The red line on the graph is their perception of their knowledge. When a compliance

crisis hits they become conscious of their incompetence and are forced to learn but their learning

may still be slow and gradual.


Figure 23 The unconsciously incompetent

Where they are rapidly growing (employing staff or capital investment) or in an industry where there

are high tax needs and they have not prepared their learning might be erratic and go from crisis to

crisis. At each crisis point they realise how much more they need to learn and sometimes their

proficiency can even go backwards.

Figure 24 The trial by error

The business owner who has a simple business in terms of tax requirements (no employees for

example and no business growth) might learn slowly but their needs are such that they only need to

increase their knowledge at points when the tax requirements change.

Figure 25 The simple cruiser

The business owner who puts in a lot of effort up front to learn will have a steep curve but gain a

good foundation knowledge base to adapt and continue learning when the business changes or

grows.

Learning

Experience

Compliance crisis

Perception of what they know

What they actually know

Learning

Experience

Compliance crisis

Learning

Experience

Tax Law changes


“Tax rules seem to be always changing. You need to be able to make sure you

know what the current requirements are, keep up to date.” WHS Services

Figure 26 The prepared planner

Respondents often mention low understanding of tax and super requirements in the initial stages of

the business. There is a sentiment that there is too much to know, which makes it difficult to

determine where to start looking.

In the qualitative research when business owners were asked to rate their knowledge when they

started compared to now, they often rated their perception of knowledge high when they started,

and rated themselves much lower now, even though they stated they had learned a lot over that

time. They said they didn’t know what they didn’t know, and the more they learn the more they

realise what they don’t know.

“The more I learn, the more I realise how much I don't know.” Aristotle, as quoted

by Energy Services.

3.4.2 Learning styles How business owners use their senses to process, memorise, recall, organise and present

information may vary dramatically because of the diversity of the population. The way people learn

differs based on abilities, interests, previous learning experiences and background knowledge. To

segment businesses into the three most common learning styles (visual, auditory or kinaesthetic)

may be oversimplifying the complexity of the education requirement and the diversity of the

audience. However, from the qualitative research it was clear that business owners need to get the

right resources, delivered from the right source in a way they can quickly learn. The speed at which

they can process information or minimise the time that they have to invest in learning is a key

requirement for new small businesses. Therefore, all styles need to be accommodated for in any

education initiative.

Regardless of the field in which the business owner received an education, it would seem that if they

have either a higher level of education they are better able to self-educate and conduct research to

find the information they require using the current formats and methods available. More

experienced business owners also seem more skilled in either managing a business or finding the

resources they require to assist them in managing their business. Not all people who start a small

Learning

Experience

Business changes or grows


business are skilled in business management. In fact, few are skilled or experienced in running a

business prior to starting their own small business. However, if the business owner/manager is in

fact, highly educated, even in a field other than business, it is likely that they will be more self-

sufficient, independent and skilled than those who are not highly educated. This experience with

learning environments has most likely assisted them to learn from the current platforms and

education resources on offer, which rely on proficiency with searching through heavy text and

reading material. For those people who have not achieved higher levels of educational attainment,

their proficiency to learn this way or their learning style may not be suited to this learning

environment. Therefore, a range of formats and methods may be needed to create a learning

environment that is suitable for a range of learning styles.

“It can be really hard to understand - the language needs to be simplified so

anyone can understand it.” Male, WHS Services

Some business owners work in a business prior to buying it from their employer. Others talked about

learning how the business operates through working in the business leading up to the purchase.

Unlike start-ups, these businesses have established systems and procedures that facilitate the

skilling up of business management. Rarely did the new owners challenge the status quo and they

would continue to do as had been done by previous owners. This type of learning by doing prior to

taking on ownership built their knowledge.

Certainly the qualitative research highlighted that learning by doing was important to business

owners, particularly via practical explanations, case studies or examples that mirrored their

business. Financial capability training packages that are targeted to their industry/business type and

therefore relevant in a “real world” setting or skills based training would be preferable to written

material.

3.4.3 Black boxes Blind trust is sometimes placed in the financial software to undertake the right calculations, and

there was at time some limited understanding as to how the rules need to be applied based on ATO

compliance. If a pre-existing business was purchased by the small business owner, they rarely

changed the software. If the business was new and they had other businesses, they generally used

what their other businesses used. Industry experts felt there was too much reliance on the software

with not enough knowledge about how the calculations or functions in the software work.

3.4.4 Frustrations with finding the right resources and sources Qualitative research with business owners found that Google was used as the first point of an

information search, which led to the ATO. This often delivered frustrating searches resulting in

uncertainty.


3.5 Feeling under pressure and not confident

3.5.1 Many new small businesses are under financial pressure Nearly half of the new small businesses < 1 year (46%) and 1–3 year (48%) surveyed described their

business as under financial pressure (score 1-2). Only 15% of the new small businesses <1 year and

14% of the 1–3 year businesses stated they are growing (score 4-5). Businesses with a turnover of

$75k–$2m were more likely to state they were in a positive financial state with 40% who scored it 4

or 5.

Figure 27 Financial State – owned for < 1 year

Figure 28 Financial State – owned for 1–3 years

26% 20% 39% 8% 7%

1 - Under Pressure 2 3 4 5 - Strongly Growing

27% 21% 39% 9% 5%

1 - Under Pressure 2 3 4 5 - Strongly Growing

Source: SQ7. On a scale from 1 to 5, how would you describe the financial state of your business right now, with 1 being under pressure, to 5 growing strongly? Base: businesses owned for < 1 year (n=300), owned for 1-3 years (n=300)


3.5.2 Perceived level of tax and super knowledge Overall, for those small businesses < 1 year surveyed, 11% were not confident, 29% moderately

confident and 59% were confident they are tax and super compliant. Half (53%) were confident that

their business finances were well managed, but a third (35%) were only moderately confident and

12% were not confident. Around half (54%) felt they were good at accessing professionals but 30%

rated themselves only moderately good and a further 16% not good.

Around a fifth (23%) of new small business owners <1 year do not know where to go to find out

information on tax and super for their business, as it changes or grows. Three out of ten feel they do

not have a good understanding of accounting and bookkeeping. Almost a third (31%) feel they do

not understand how tax and super works and do not feel equipped to manage these areas of the

business. The area in which new business owners < 1 year felt the least competent was the use of

accounting software to manage their business (40%).

Figure 29 Financial competence of businesses owned for < 1 year

Source: B1. I am going to read out a list of statements. For each can you rate how well it describes you as a business owner/manager. A rating of 1 indicates that the statement is a poor match and sounds nothing like you. A rating of 10 indicates that the statement is a perfect match and describes you very well. Base: owned < 1 year (n=300),

Overall, for small businesses owned for 1–3 years, 9% were not confident, 23% moderately

confident and 68% were confident they were tax and super compliant. Half (51%) were confident

that their business finances are well managed but a third (38%) were only moderately confident and

11% were not confident. Around half (57%) felt they were good at accessing professionals but 30%

rated themselves only moderately good and a further 14% not good.

A fifth (22%) of new small business owners (1–3 years) do not know where to go to find out

information on tax and super for their business, as it changes or grows. A quarter (25%) feel they do

not have a good understanding of accounting and bookkeeping. Almost a third (31%) feel they do

not understand how tax and super works and do not feel equipped to manage these areas of the

11%

12%

16%

23%

30%

31%

40%

29%

35%

30%

37%

43%

43%

37%

59%

53%

54%

40%

27%

26%

23%

I am confident my business is tax and super compliant

I am confident that my business’ finances are being well managed

I am good at accessing and using professionals likeaccountants, tax agents and business advisors about my

business

I know how and where to get information for mybusiness tax and super needs as it changes or grows

I have a good understanding of accounting andbookkeeping

I understand how tax and super works and feelequipped to manage these areas of my business

I am confident using accounting software to manage mybusiness

Poor match (1-4) Moderate match (5-7) Very good match (8-10)


business. The area in which business owners (1–3 years) felt the least competent was the use of

accounting software to manage their business (44%).

Figure 30 Financial competence of businesses owned for 1–3 years

While there were no statistically significant differences between how new business owners <1 year

and those who had been in business 1–3 years felt in regards to their competence of tax and super,

there were other characteristics that were statistically significant:

Those who have a turnover of $75k–$2m state they are better at accessing and using

professionals.

Those who have 2 or more employees are more confident using accounting software to

manage their business.

Those who work in administrative and support services are more confident their business is

tax and super compliant and they state they are better at accessing professionals.

There is a correlation between the financial state of the business and competence: the

better the finances, the more competent business owners feel on all statements.

Those who have owned businesses before are better at accessing professionals, have a

better understanding of accounting and bookkeeping and are more confident using

accounting software.

9%

11%

14%

22%

25%

31%

44%

23%

38%

30%

37%

51%

45%

31%

68%

51%

57%

42%

24%

25%

25%

I am confident my business is tax and super compliant


I am good at accessing and using professionals likeaccountants, tax agents and business advisors about my

business

I know how and where to get information for mybusiness tax and super needs as it changes or grows

I understand how tax and super works and feelequipped to manage these areas of my business

I have a good understanding of accounting andbookkeeping

I am confident using accounting software to manage mybusiness


Source: B1. I am going to read out a list of statements. For each can you rate how well it describes you as a business owner/manager. A rating of 1 indicates that the statement is a poor match and sounds nothing like you. A rating of 10 indicates that the statement is a perfect match and describes you very well. Base:), owned for 1-3 years (n=300)


Those who have managed a business prior to their current one state they are more capable

on all the statements.

Most business owners in the qualitative research considered themselves to be financially literate

(they know the basics to get by) but what they presume they don’t know are the “tricks”, or rather

the strategic knowledge of the tax system to get it to work better for them and their business. Most

start with a low level of knowledge, particularly home-based businesses, but have to learn fast (e.g.

as soon as they have enough income to pay GST and submit BAS). Most learn just enough to keep

the business going at that point in time and do not aim to learn things in advance. Specific areas

where knowledge is particularly lacking are super and cash flow management, and for some, BAS

and tax returns. The support they need in staffing/HR issues is to gain a better understanding of the

difference between an employee and a contractor. Most desired to be compliant and “pay their fair

share” but what they were anxious about was whether they were paying more than they should.

Given that most new small businesses have rarely been taught the basic concepts of taxation and super prior to starting their business, there is little wonder they may be unintentionally non-complying or not effectively managing their tax obligations. Essentially, they “don’t know what they don’t know”. The qualitative research found that many new small businesses had been unintentionally non-compliant in relation to their tax and super obligations. These business owners learnt the hard way by making mistakes, such as not paying BAS on time, applying GST correctly, not paying super for casual employees, not checking withholding tax for contractors, claiming for items that have FBT and on some occasions not claiming for items they were eligible to claim. It was clear these were gaps in knowledge and that they were not intentionally avoiding their tax obligations. These business owners were not able to self-identify the need to learn more about tax and super until it was too late.

“Gee I was pretty disorganised but I didn’t know that I was bad at the

finances side until about 6 months in, then I got a wake-up call.” Tech Services


3.6 Target audience Not every new small business needs to improve their tax and super knowledge. However, those that

do are under financial pressure. Efficacy in the tax and super space appears to have three common

elements that are positively correlated:

1. The more a business owner knows about accounting and bookkeeping

2. The more they feel confident they are compliant with tax and super

3. The more they are also competent at accessing professionals.

Note: Correlation does not look at causal relationships; it only describes mutual links.

Figure 31 Elements of capability

These three elements of efficacy with tax and super are positively correlated. In particular, being

good at accessing and using professionals is correlated with being confident that one’s business is

compliant (0.522) and that one’s finances are being well managed (0.48). It is also strongly correlated

with knowing how and where to get information for one’s business tax and super needs (0.46).

Having a good understanding of accounting and bookkeeping is strongly correlated with being

confident with accounting software (0.54), but also with being confident that one’s finances are

being well managed (0.49).

2 This figure is a correlation coefficient which is a statistical measure between -1 and +1 of the degree to which changes to the value of one variable predict change to the value of another. In positively correlated variables (where the coefficient is between 0 and 1), the value increases or decreases in tandem.

Using professionals

Own knowledge and understanding

Being Compliant


The strongest correlation was found between knowing how and where to get information for one’s

business tax and super needs as it changes or grows, and understanding how tax and super works,

and feeling equipped to manage these areas of one’s business (0.63).

Figure 32 Correlation Analysis on Capability

Correlation I am

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I am good at accessing and using professionals like accountants, tax agents and business advisors about my business 1.00 0.37 0.48 0.32 0.46 0.39 0.52

I have a good understanding of accounting and bookkeeping 0.37 1.00 0.49 0.54 0.42 0.55 0.33

I am confident that my business’ finances are being well managed 0.48 0.49 1.00 0.39 0.47 0.42 0.48

I am confident using accounting software to manage my business 0.32 0.54 0.39 1.00 0.36 0.39 0.27

I know how and where to get information for my business tax and super needs as it changes or grows 0.46 0.42 0.47 0.36 1.00 0.63 0.45

I understand how tax and super works and feel equipped to manage these areas of my business 0.39 0.55 0.42 0.39 0.63 1.00 0.46

I am confident my business is tax and super compliant 0.52 0.33 0.48 0.27 0.45 0.46 1.00


Based on the association of all elements, it is possible to see two distinct clusters emerging. The first

cluster is ‘overall less knowledgeable business owners’ (41%), and the second is ‘overall more

knowledgeable business owners’ (59%).

Figure 33 Capability by overall less knowledgeable business owners cluster

Figure 34 Capability by overall more knowledgeable business owners cluster

22%

26%

32%

48%

56%

62%

68%

42%

55%

45%

40%

40%

35%

30%

34%

19%

22%

12%

3%

4%

2%

I am confident my business is tax andsuper compliant


I am good at accessing and usingprofessionals like accountants, tax…

I know how and where to get informationfor my business tax and super needs as…

I understand how tax and super worksand feel equipped to manage these…

I have a good understanding ofaccounting and bookkeeping

I am confident using accounting softwareto manage my business


1%

1%

2%

4%

7%

8%

24%

23%

15%

19%

34%

52%

51%

37%

75%

84%

79%

62%

41%

41%

39%


I am confident my business is tax andsuper compliant

I am good at accessing and usingprofessionals like accountants, tax…

I know how and where to get informationfor my business tax and super needs as…

I understand how tax and super worksand feel equipped to manage these…

I have a good understanding ofaccounting and bookkeeping

I am confident using accounting softwareto manage my business


Source: B1. I am going to read out a list of statements. For each can you rate how well it describes you as a business owner/manager. A rating of 1 indicates that the statement is a poor match and sounds nothing like you. A rating of 10 indicates that the statement is a perfect match and describes you very well. Base: Less Capable (n=248), More Capable (n=349)


The less knowledgeable business owners cluster is also under significantly more financial pressure,

with 59% of them under high pressure (score of 1 or 2) compared to 38% of the more

knowledgeable cluster. Conversely, the more knowledgeable cluster is more likely to be in a positive

financial state, with 19% rating their financial situation 4 or 5, compared to only 8% of those in the

less knowledgeable cluster.

There is a correlation between all aspects of capability and the financial state of the business: the

more competent and capable a business is, the better its financial state.

Business owners from the more knowledgeable cluster are more likely to have owned another

business in the past, with 19% who say their current business is not the first they have owned. They

are also more likely to have managed a business in the past, with almost a third (32%) of them

saying they have managed a business prior to this one.

It is not surprising that the more experienced business owners are, the more likely they are to be

confident with tax and super requirements.

Regarding their aspirations and reasons why they started a business, the more knowledgeable

cluster is more likely to be freedom and flexibility seekers (46%), whereas the less knowledgeable

cluster is more likely to be entrepreneurs by force rather than choice (e.g. 15% could not find a job).


Figure 35 Summary of Clusters

Less knowledgeable

business owners More knowledgeable

business owners

Capability Score Sum of all capability

statements 31.9 53.8*

Financial State

Under Financial Pressure (1-2) 59%* 38%

Average (3) 33% 43%*

Growing (4-5) 8% 19%*

Experience

Have owned another business in the past 9% 19%*

Worked as an employee before owning business 6% 9%

Managed a business prior to this one 18% 32%*

Entrepreneurial Aspirations

Freedom and Flexibility 33% 46%*

Couldn’t find a job 15%* 7%

*significantly higher than the other cluster at the 95% confidence level


The top source of advice for both clusters remains tax agents or accountants. However, the more

knowledgeable cluster relies on them much more, with 83% often relying on them; compared to

55% for the other cluster. The more knowledgeable cluster is also more likely to rely on a number of

additional sources for support in developing their knowledge. More of the less knowledgeable

cluster (5%) receives no regular support from any of the listed organisations/people, compared to

the more knowledgeable cluster (1%).

Figure 36 Support and connection by overall less capable business owners cluster

19%

43%

44%

52%

38%

28%

57%

64%

26%

30%

32%

26%

40%

51%

28%

22%

55%

27%

24%

22%

22%

20%

15%

15%



Government

Bookkeeper


Other business owners, acquaintances…

Associations, industry bodies or the…




Figure 37 Support and connection by overall more capable business owners cluster

5%

25%

26%

33%

22%

37%

38%

61%

12%

33%

33%

31%

46%

36%

39%

20%

83%

42%

41%

36%

32%

27%

24%

19%


Government


Bookkeeper

Other business owners, acquaintances…

Associations, industry bodies or the…




Source: C1. The next few questions will help us to learn how businesses develop their knowledge about business management and financial management, including tac and super, through a variety of formal and informal networks. For each person please indicate on a score of 1 to 10 where 10 is always rely on them for advice and 1 is never rely on them for advice about tax and super. Base: cluster 1 (n=248), cluster 2(n=349)


4 Appendix

4.1 Discussion guide

4.1.1 Business owners Interviews

15-088702-01 New small business education research In-depth Interview guide

Winangali Ipsos

Project Contact: Noel Niddrie Kylie Brosnan

Contact address: 11 Tillot St, Dutton Park, Qld 4102 Suite 3a, 80 Stamford Road

Indooroopilly QLD 4068

Office phone: 0438 756 047 (07) 3016 7660

Email: [email protected] [email protected]

The handling of a moderation guide:

As an open method of exploration, focus groups are not completely standardised. Listing of relevant questions

in the moderation guide covers relevant subjects and leaves enough space for discussions in the sense of an

open approach. The questions mentioned below are not meant to be literally asked. Likewise, the order must

not be strictly followed. In this sense phrased questions describe the different subject areas and are meant to

control the discussion process. Each subject area is firstly explored openly. Then more detailed probing by the

moderator follows, with regard to subjects that were not spontaneously mentioned by the participants, but

that are relevant.


Job Number 15-088702 Job Name ATO Small Business Education project Session Type In depth interview Discussion Guide Version 1

Acknowledgements Winangali Ipsos would like to thank the ATO for funding this study and for their help and assistance

in the development of the project. We would also like to thank the members of the small business

community who took part in this study, without whose input, the research would not have not been

possible.

Objectives

This research will provide an evidence base to inform the design of an integrated education strategy for the

new small business segment. Research results will also be used, over time to track key monitoring questions

about new small business tax and super education experiences.

By ‘education experience’ we mean something beyond increased awareness of tax and super requirements.

Rather, we mean building client understanding of what they need to do, why they need to do it and how to do

it. An education experience should, ideally, position them to be able to act – whether they choose to

undertake tax and super tasks themselves or whether they choose to use a tax professional to undertake some

or all of these tasks.

The results of the research need to provide information to help us pre-empt client needs, and build in prompts

to help them access the right resources at the right time and in their preferred ways.

While this research is focused on tax and super education, it is envisaged that the results may be useful across

whole of government agencies that provide touch points for small business (e.g. Department of Industry, ASIC,

Fair Work Ombudsman, state government business websites and local councils).

This research will target both businesses in their first 12 months of operation, as well as businesses of 1–3

years.

NOTE: The discussion guide is a guide and not a rigid set of questions. The moderator’s style is not to go through

the guide question by question, but to ensure the desired information is gained from the interviews. The timing

for each activity is an approximation.


1. Introductions (5 minutes)

Introduction to New small business’ education research In-depth interview process

Thank for taking the time to participate in this important project.

Introduction to Winangali (Ipsos) – we are an independent market research company

This is an informal discussion and will take between 1-1.5 hours; there is a fair bit to get through.

The aim of this research is to understand how the ATO can best help new small businesses be aware of, understand and meet their tax and super requirements. More specifically, they need information on the levels and kinds of tax and super knowledge small businesses would like to have in the early stages of their business, and their preferred ways of obtaining this knowledge. This includes those businesses that prefer to use tax professionals.

Key things to be aware of in this discussion…

No right or wrong answers.

We want to hear your honest opinions – please don’t hold back! There are no right or wrong answers

Confidential discussion - the final report will show the combined responses of the people we speak

with.

Overview of discussion topics

Topic Timings COMPETENCY

Perceived level of business management knowledge and experience at

commencement of business and currently.

15 minutes

MOTIVATION

Intent or inclination to develop knowledge and understanding about tax and super.

20 minutes

EDUCATION

Experiences in attempting to develop knowledge. Questions about their preferences for educational experiences (for particular issues/needs).

10 minutes

Required materials

SHOWCARD – for each participant

GREEN, PINK, YELLOW highlighter pens

IDI GUIDE

INCENTIVE and INCENTIVE SIGNATURE FORM


COMPETENCY Perceived level of business management knowledge and experience when they started their business / currently (15 minutes)

To begin with, I’d like you to tell me a little bit about yourself and your business…….

Who owns the business, family/partners, structure (probe for was this for tax purposes)

How is the business going?

Right now, what three things about your business keep you up at night worrying (if at all)

Let’s talk a little bit about the commencement of the business.

What is your background, what were you doing before you started the business?

Why did you first decide to go into business for yourself

How long did you think about your idea before you actually started the business?

Who did you consult during the ideation stage?

What research did you do during the ideation stage – what were you most interested in

understanding about starting a business at that point

When did you actually start the business? How long after your first came up with the idea?

How did you go about starting the business?

Were there any family considerations or lifestyle factors part of that decision

Still thinking back to when you started the business, specifically what experience or knowledge did

you have about small business finance, accounting/bookkeeping/tax, account management (payment,

invoicing procedures), supporting systems (e.g. accounting software), business planning and tax and

super knowledge?

Where did you get this knowledge from?

How did you learn more about it?

Did you feel equipped in this area?

What knowledge in this area do you specifically think you were missing?


If you had to rate yourself out of 10 where 10 was an expert and 0 was no knowledge at all, what score

would you give yourself back then? Why?

Did you do any research or try to find out more information about these specific topics, before you

started the business? IF YES What did you do? How did you search? Where/Who did you go to find

out more information?

And what about now how would you rate yourself out of 10 where 10 was an expert and 0 was no

knowledge at all? Why?

IF SCORE INCREASED ASK What did you do to increase your knowledge about small business

finance, accounting/bookkeeping/tax, account management (payment, invoicing procedures),

supporting systems (e.g. accounting software), business planning and tax and super knowledge?

How did you search? Where/Who did you go to find out more information? When was this?

IF SCORE SAME OR DECREASED ASK Would you like to increase your knowledge about small

business finance, accounting/bookkeeping/tax, account management (payment, invoicing

procedures), supporting systems (e.g. accounting software), business planning and tax and super

knowledge? Is it important that you know these things? Where/Who would you go to if you did

want to find out more information?

What financial package do you use (if any)? Did you set this up yourself? Were you confident in setting

it up? What were your frustrations?


IF OTHERS SET UP Why did you get a tax professional/business advisor/accountant to do this

for you? Do you know if they have set it up in the right way to best optimise your business

performance? Do you know how to use it (not just data entry but how it works)?

IF RECENT BUSINESS (1–3 years) Have you changed financial packages since you started?

Why?

IF NO FINANCIAL PACKAGE Are you thinking about getting a financial package? Which one?

Do you have any concerns about setting one up? Will you do this yourself? If not who will do

this?

Do you have a business advisor? IF YES What do you use them for?

Do you use any other tax professionals? IF YES What do you use them for?

Do you have an accountant or bookkeeper who gives your business or tax advice? IF YES What

do you use them for?

Do you feel confident when talking to them? Do you know what questions to ask them? Is

there any information that would help you to ask informed questions of these <business

advisors/tax professionals/intermediaries>?

Who in the business is most active in seeking to learn about tax/super e.g. the business owner,

their partner / spouse or someone else in the business?


MOTIVATION

Intent or inclination to develop their own knowledge and understanding about tax and super. (20 minutes)

USE SHOWCARD A This is a list of some things that businesses need to think about when they first

start up. Think about when you started your business (For Recent 1–3 years SAY: Think about what

you wish you’d known in the first 12 months? I would like you to use the three highlighters to indicate

the following.

GREEN – I feel confident that I know what I need to know about this area of my business.

PINK – I do not feel confident about this area but I am not interested in learning more.

YELLOW – I do not feel confident and I want to learn more about this area of my business.

Life cycle stages Event Engagement activity

Star

t u

p (

firs

t 12

mo

nth

s)

Register Apply for ABN Apply for TFN Apply for GST Apply for Excise Apply for FBT Apply for ITW Apply for ITI Apply for Digital certificate Registering a name

Enquire about What is GST applicable and what isn’t Regulations and general requirements Employing staff v contractors Insurances required Superannuation requirements

Set up business tax records

Use ATO calculators Best way for record keeping Receipting requirements How much to put aside for tax

General Professional associations Checklists for general steps Overview of requirements for start-ups Flow chart for setting up a business Average set up costs (for their industry)

Ru

nn

ing

– in

clu

des

‘no

rmal

’

gro

wth

/ch

ange

Earn income Lodge Income tax return Lodge amendment Challenge NOA- POA Receive NOA Receive GIC Receive refund Pay IT Pay GIC Pay FBT Pay penalties

Reach GST threshold Lodge BAS


Pay GST Withhold tax- PAYG –ITW

Buy/sell assets Pay CGT

Maintain business tax records

Use ATO calculators

Hire/fire employees Decide whether contractor or employee Submit employment declarations Provide TFN applications Pay FBT Withhold tax – PAYG – ITW Provide superannuation Dealing with contractors Redundancy payouts Maternity/paternity leave Provision of bonuses Overtime payments HECS/HELP debt

Ru

nn

ing

– in

clu

des

‘no

rmal

’ gro

wth

/ch

ange

Cash flow issues Enquire about handling tax debt Set up payment plan Pay debt General cash management solutions How much to put away

Enquire about What is GST applicable and what isn’t when moving to GST Regulation updates/changes Employing staff v contractors Insurances required Superannuation requirements Late BAS submissions Superannuation requirements (salary sacrifice) Deductions Trust arrangements Leasing/mortgage and tax

Be audited by ATO Receive letter Receive bill Receive information pack Phone call for appointment Visit from ATO officers

Ch

ange

– in

clu

des

dra

mat

ic c

han

ge

Expansion

Handover to family

Sell business as is

Split

Business owner/board deceased

Business bought by other business

Employee separation, changes required

General Notification of exiting requirements Cancellation of ABN etc Superannuation changes / new staff Change of details Use ATO calculators Pay scales/Tax tables Fringe benefits Changing business structure


Tell me about the GREEN items

How did you build your knowledge or learn about these areas? How did you receive or find

this information (PROBE from who/where/how)?

Tell me about the PINK items

For those areas you have little interest in developing, why is this?

Tell me about the YELLOW items

How would you like to learn about these items / what are your preferences for how to receive

information / how would you go about seeking information? How much time or effort would

you put into building your knowledge. How important is it to know this? What would influence

this (i.e. what would make / cause them to invest more or less effort / time)?

EDUCATION

Questions about their experiences in attempting to develop their knowledge. (10 minutes)

REFER TO SHOWCARD Tell me about a time when you attempted to find the information / get

the support about any of these areas that was a positive experience? Were they able to

translate the information you found into the action required (e.g. fulfilling a specific tax or

super requirement; asking their tax professional to do something for them; asking their tax

professional the right questions to understand what needs to be done)?

REFER TO BOTH SHOWCARS Tell me about a time when you attempted to find the information

/ get the support about any of these areas that was a negative experience? Were they able to

translate the information you found into the action required (e.g. fulfilling a specific tax or


super requirement; asking their tax professional to do something for them; asking their tax

professional the right questions to understand what needs to be done)? What would improve

the experience?

Have you ever made mistakes or errors in attempting to meet tax or super requirements? If

so, what could have prevented this? What would have helped? What would have helped make

it easier to get things right in the first place?

Thinking about financial education providers who would you prefer to use to provide

information or support? (i.e. third parties, tax agents, other trusted/preferred ways)

Thinking about financial information or support, how would you prefer to access them? (i.e.

webpages, videos, formal curriculum or training packages, informal self-paced learning)

Thinking about financial information or support, when would you prefer to access it?

Some websites require an authenticated (log-in accounts) versus unauthenticated

environments (no log-in). Do you use these authenticated sites? Which do you prefer to use

when getting financial information and support? Would you have individual log-ins or just one

for the business?


Did you seek any information from a government organisation? Was it helpful or useful? Is

there a department that provides the information and support in the best way for your

needs?

Have you had any particularly good experiences with other government agencies or private

organisations that have successfully met you educational (could be anything they need for

business i.e. industry etc) needs? What can the ATO learn from the way they deliver

information?

CLOSE

Do you have any final comments or suggestions you wish to make? Or any other questions?

Thank you very much for your time.

Hand out incentive $120

Complete the incentive form.

RESEARCHER TO CODE

1. Unconscious incompetence 2. Unconscious competence

3. Conscious incompetence 4. Conscious competence


4.1.2 Expert Stakeholder Interviews

15-088702-01 New small business education research In-depth Interview guide EXPERT / STAKEHOLDER INTERVIEWS

Winangali Ipsos


Contact address: 11 Tillot St, Dutton Park, Qld 4102 Suite 3a, 80 Stamford Road


Office phone: 0438 756 047 (07) 3016 7660


The handling of a moderation guide:

As an open method of exploration, focus groups are not completely standardised. Listing of relevant questions

in the moderation guide covers relevant subjects and leaves enough space for discussions in the sense of an

open approach. The questions mentioned below are not meant to be literally asked. Likewise the order must

not be strictly followed. In this sense phrased questions describe the different subject areas and are meant to

control the discussion process. Each subject area is firstly explored openly. Then more detailed probing by the

moderator follows, with regard to subjects that were not spontaneously mentioned by the participants, but

that are relevant.

Job Number 15-088702 Job Name ATO Small Business Education project Session Type In depth interview Discussion Guide Version 2


Acknowledgements Winangali Ipsos would like to thank the ATO for funding this study and for their help and assistance

in the development of the project. We would also like to thank the members of the small business

community who took part in this study, without whose input, the research would not have not been

possible.

Objectives

This research will provide an evidence base to inform the design of an integrated education strategy for the

new small business segment. Research results will also be used, over time to track key monitoring questions

about new small business tax and super education experiences.

By ‘education experience’ we mean something beyond increased awareness of tax and super requirements.

Rather, we mean building client understanding of what they need to do, why they need to do it and how to do

it. An education experience should, ideally, position them to be able to act – whether they choose to

undertake tax and super tasks themselves or whether they choose to use a tax professional to undertake some

or all of these tasks.

The results of the research need to provide information to help us pre-empt client needs, and build in prompts

to help them access the right resources at the right time and in their preferred ways.

While this research is focused on tax and super education, it is envisaged that the results may be useful across

whole of government agencies that provide touch points for small business (e.g. Department of Industry, ASIC,

Fair Work Ombudsman, state government business websites and local councils).

This research will target both currently new to business (first 12 months), as well as businesses (1–3 years)

respondents.

NOTE: The discussion guide is a guide and not a rigid set of questions. The moderator’s style is not to go through

the guide question by question, but to ensure the desired information is gained from the interviews. The timing

for each activity is an approximation.


1. Introductions (5 minutes)

Introduction to New small business’ education research In-depth interview process

Thank for taking the time to participate in this important project.

Introduction to Winangali (Ipsos) – we are an independent market research company

This is an informal discussion and will take around 45 minutes.

The aim of this research is to understand how the ATO can best help new small businesses be aware of, understand and meet their tax and super requirements. More specifically, they need information on the levels and kinds of tax and super knowledge small businesses would like to have in the early stages of their business, and their preferred ways of obtaining this knowledge. This includes those businesses that prefer to use tax professionals.

Key things to be aware of in this discussion…

No right or wrong answers.

We want to hear your honest opinions – please don’t hold back! There are no right or wrong answers

Confidential discussion - the final report will show the combined responses of the people we speak with.

Overview of discussion topics

Topic Timings COMPETENCY

Perceived level of business management knowledge and experience at

commencement of business and in later stages of establishment.

25 minutes

MOTIVATION

Perceived intent or inclination amongst small business owners/managers to

develop knowledge and understanding about tax and super.

10 minutes

EDUCATION Experiences in attempting to develop knowledge. Preferences for educational experiences (for particular issues/needs).

10 minutes

Required materials

IDI GUIDE

INCENTIVE and INCENTIVE SIGNATURE FORM


COMPETENCY Perceived level of business management knowledge and experience amonst small business start-ups and early-stage businesses (25 minutes)

To begin with, I’d like you to tell me a little bit about yourself and your role in relation to small

businesses you work with or are involved with…….

Role

Main involvement with small businesses

Okay, thinking about the small businesses you work with, can you tell me your general perceptions

about the level of experience or knowledge your small business customers/members have in relation

to finance, accounting/bookkeeping/tax, account management (payment, invoicing procedures),

supporting systems (e.g. accounting software), business planning and tax and super knowledge when

they first start up their business?

How much knowledge do they have?

Where do they generally get this knowledge from?

How do they learn more about these topics during the start-up stage?

Do you feel that mostly they are equipped in this area? If not, why not?

What knowledge in particular do you think that they are missing?

If you had to rate the small businesses you mostly deal with out of 10 where 10 was an expert and 0

was no knowledge at all, what score would you give your customers/members when they are starting

up their business? Why?

Do your customers/members do any research or try to find out more information about these specific

topics, before they start their business? IF YES

What do they do?

How did they search?

Where did they go to find out more information?


Do your customers/members ask you/your business/association for this type of information? Do

you/does your business/association provide this type of information? How? What in particular?

And how long after they have started their small business, do you think that your customers/members

start to become more knowledgeable about these topics? When?

And how do they generally become more knowledgeable? And at this point, how would you

rate them out of 10 in terms of their level of knowledge about tax and super issues?

Do they ever become extremely knowledgeable?

Do they still require your assistance over time?

What do you mainly assist them with over time?

IF SCORE INCREASED ASK And mainly where do you think they gain their additional knowledge /

expertise from? What would be the main source?

IF SCORE SAME OR DECREASED ASK And why do you think they are not becoming more

knowledgeable about these topics over time?

Who should help these small businesses to become more knowledgeable?

What do they mainly need to help them become more knowledgeable?

What financial package do your customers/members mainly use (if any)?

Do they tend to set these up for themselves? Who sets this up?

Do you think they are confident at using this type of package?

What are their main frustrations?


Do your customers/members use business advisors or financial advisors?

Who do they use?

What do they use you for?

How often would they use these types of services?

What do they mainly use these/your services for?

In your opinion, when it comes to financial management, specifically tax and super issues, what do

small businesses need the most help with?

Why?

What specific issues do they have?

Do you take enquiries from your customers/members on these topics? What mainly do they

ask you about?

MOTIVATION

Intent or inclination of small businesses to develop their knowledge and understanding about tax and super. (10 minutes)

I am just going to read through a number of different specific areas and I would like you to tell me whether

you think your small business customers/members are competent in these areas or not.

Registering a business, including applying for an ABN and setting up the structure of the business.

Managing the business ongoing, managing income, lodging tax returns, buying and selling assets, maintaining

business tax records, and being audited by the tax office. Using ATO tax tools.


Managing cashflow, accounts payable, accounts receivable.

Managing staff/employees, paying staff, dealing with tax issues around staff employment, expense claims,

FBT, management of contractors, superannuation payments etc.

Managing business ownership, shares, employee shareholdings, Director issues etc.

Which of these areas do you think small businesses are most interested in learning more about?

Registering a business, including applying for an ABN and setting up the structure of the business.

Managing the business ongoing, managing income, lodging tax returns, buying and selling assets,

maintaining business tax records, and being audited by the tax office. Using ATO tax tools.

Managing cashflow, accounts payable, accounts receivable.

Managing staff/employees, paying staff, dealing with tax issues around staff employment, expense claims,

FBT, management of contractors, superannuation payments etc.

Managing business ownership, shares, employee shareholdings, Director issues etc..

EDUCATION

Questions about their experiences in attempting to develop their knowledge. (10 minutes)

Where do your small business customers/members prefer to get

information/education/support from? (i.e. third parties, tax agents, other trusted/preferred

ways)


Thinking about financial information or support, how do small businesses access them? (i.e.

webpages, videos, formal curriculum or training packages, informal self-paced learning)

Thinking about financial information or support, when would your members/customers

prefer to access resources?

Some websites require an authenticated (log-in accounts) versus unauthenticated

environments (no log-in). Do your customers/members use these authenticated sites?

What government department provides the best information and support for small

businesses?

Have you had any of your small business customers/members had particularly good

experiences with other government agencies or private organisations that have successfully

met their educational (could be anything they need for business i.e. industry etc) needs?

What would your advice to the ATO be in terms of how they can help support your small

business customers/members better?

How could the ATO better support you so you can deliver a better service to your small

business customers/members?


CLOSE

Do you have any final comments or suggestions you wish to make? Or any other questions?

Thank you very much for your time.

Hand out incentive $120

Complete the incentive form.


4.2 Quantitative Survey 15-088702 New small business education research

Telephone Survey with Business Owners

Winangali Ipsos


Contact address: 11 Tillot St, Dutton Park, Qld

4102

Suite 3a, 80 Stamford Road


Office phone: 0438 756 047 (07) 3016 7660


Job No. 15-088702

Job Name. ATO Small Business Education

QUESTIONNAIRE STRUCTURE

Section Objectives (from Brief) COM-B Length

Screeners and

Business Organisation

Profile

Business characteristics and profile

to determine differences between

segments and needs

Business profiling 2 minutes

Section A: Business

Owner Characteristics

Level of business management

knowledge and experience.

Capability 2 minutes

Section B: Financial

Confidence &

Competence

Level of confidence and perceived

competence in understanding and

managing their business’s finances,

especially tax and super

Capability 2 minutes

Section C –

Experiences, Support

and Connections

How have they attempted to

develop their knowledge, where do

they get the information they

need, what support do they rely

on.

Opportunity 2 minutes


Section D – Intent and

Inclination

Intent to develop their own

knowledge and understanding

about tax and super. How much

time are they willing to invest.

Motivation 3–4

minutes

Section E –

Educational

Preferences

What are their preferences for

providers, formats, channels,

content. What expectations do

they have for content/assistance

from ATO. .

Behaviours 3 minutes

Close 2 minutes

INTRODUCTION

Hello, my name is ______________ from Ipsos, calling on behalf of the Australian Tax Office. We are currently

asking small business people to participate in a short survey to help the ATO understand how they can best help

new small businesses be aware of, understand and meet their tax and super requirements.

The survey will last approximately 15 minutes which can be done now or at a time convenient to the Business

Owner. May I speak to the Business Owner please? [IF JOINT OWNERS ASK FOR THE ONE THAT IS THE PERSON

WHO MAINLY LOOKS AFTER TAX OR SUPER]

[IF MORE INFORMATION ON RESEARCH REQUIRED]

The ATO is seeking information on the levels and kinds of tax and super knowledge small businesses would like

to have in the early stages of their business, and their preferred ways of obtaining this knowledge. This

includes those businesses that prefer to use tax professionals. This research will provide an evidence base to

inform the design of an integrated education strategy for the new small business segment.

[IF QUERIED ABOUT BONA FIDES OF RESEARCH] I can provide the names of people who will verify the

legitimate nature of this research project. The first is the Australian Market and Social Research Society

enquiry line on 1300 364 830 who can verify that we are a legitimate market and social research company. The

second is the research project manager, Andrew Ross at Ipsos, the organisation managing this research

project, who can discuss the specifics of this research. The phone number is 07 3016 7657.

Respondents can also verify the authenticity of the research by contacting the ATO switchboard on 13 28 69

and asking for either Angie Kelly ext 33728 or Terri Field ext 95026.

Alternatively they can check the credentials at the ATO website:

https://www.ato.gov.au/About-ATO/Research-and-statistics/Our-research/Current-research-projects/?sbn

https://www.ato.gov.au/About-ATO/Research-and-statistics/Our-research/Current-research-projects/?sbn


This survey has been approved by the Australian Government Statistical Clearing House. Would you like the

Approval Number?


SCREENERS AND BUSINESS ORGANISATION PROFILE (2 minutes)

Before I can ask you to participate I need to ask you a few questions about this business <INSERT BUSINESS

NAME FROM THE LIST>. The next few questions relate to this business and will help to determine if it is in

scope for this survey:

SQ1. Approximately how many years in total has this business been

trading including before you owned the business?

DNRO, SR

None 1

Less than 1 year 2

1–3 years 3

More than 3 years 4

Refused [DNRO] 99 Thank and close do not recruit

SQ2. Approximately how many years have you owned this business?

DNRO, SR

Less than 1 year 1 Check quota (TBA%)

1–3 years 2 Check quota (TBA%)

More than 3 years 3 Thank and close = NQ1

Refused [DNRO] 99 Thank and close do not recruit

SQ3. The following question will determine if your business is in scope of this survey and will be useful for understanding businesses like yours. What was your approximate turnover for the financial year 2014-2015? IF NECESSARY: That is from the 1st of July 2014 until the 30th of June 2015 IF NECESSARY: Turnover is also known as ‘Gross sales’ or ‘revenue’

READ OUT.

Less than $75,000 1 MONITOR

NUMBERS $75,000 - $2 million 2

Over $2 million 3 Thank and close do not recruit

Do not wish to answer 6 Thank and close do not recruit



Record number

Refused [DNRO]

SQ5. Which of the following would best describe the ownership structure?

READ OUT, SR

INTERVIEWER NOTE IF MULTIPLE PROBE FOR BEST


Partnership 2


Employee owned company, that is all shareholders work within

the business

4

Publicly owned company, that is, shares in this company are

traded on the Australian Stock Exchange

5

Contractor 6

Franchise 7

Refused [DNRO] 99

SQ6. What is the main industry sector in which you

operate? DNRO, SR

Agriculture, forestry and fishing 1

Mining 2

Manufacturing 3

Electricity, gas, water and waste services 4

Construction 5

Wholesale trade 6

Retail trade 7

Accommodation and food services 8


SQ7 On a scale from 1 to 5, how would you describe the financial state of your business right now, with 1

being under pressure, to 5 growing strongly.

Under Pressure Strongly Growing

1 2 3 4 5

Section A - BUSINESS OWNER CHARACTERISTICS (2 minutes)

Thank you for that. The next few questions are about you and your experience as a business owner.

A1 Is this the first business you have owned?

Transport, postal and warehousing 9

Information media and telecommunications 10

Financial and insurance services 11

Rental, hiring and real estate services 12

Professional, scientific and technical services 13

Administrative and support services 14

Pubic administration and safety 15

Education and training 16

Health care and social assistance 17

Arts and recreation services 18

Other services 19

Refused [DNRO] 99

Yes 1 Go to QA3

No 2 Go to QA2


A2 If NO QA1 ASK. How long have you been a business owner in total?

INTERVIEWER NOTE: NOT JUST IN CURRENT BUSINESS

A3 Did you work as an employee in this business before owning it?

A4 IF YES AT A3 ASK. How long did you work in the business before owning it?

A5 Have you ever managed a business prior to this one? It could have been a business you did not own.

A6 IF YES AT QA8 ASK: How many years of experience in total have you had in business management

roles in a business, even those you did not own?

Record Number of Months [Allow 0-11] , Years [allow 0-80] _

Don’t know/Refused 99

Yes 1 Go to QA4

No 2 Go to QA5



Yes 1 Go to QA6

No 2 Go to QA7




A7 Can you please tell me the top three reasons that attracted you to start your own business. DO NOT READ

OUT – CODE INTO FRAME BELOW

RANK 1 (record 1st, 2nd 3rd )

Reason 1st 2nd 3rd

FREEDOM AND

FLEXIBILITY

To be autonomous

To have flexibility

To control my own destiny

To achieve a balanced lifestyle

To have something to do prior to retiring

PASSIONATE

CREATOR

To be creative

To work in an area I am passionate about

To work with a particular skill I have

STATUS SEEKER To obtain respect from the community

To build something for my family

To be known for something and to leave a

legacy

ALTRUISM To help others in need

To contribute something to society

FINANCIAL To make money

Could not get a job

OTHER Specify


Section B – FINANCIAL AWARENESS AND COMPETENCE

COM-B: CAPABILITY (2 minutes)

B1 I am going to read out a list of statements. For each can you rate how well it describes you as a

business owner/manager. A rating of 1 indicates that the statement is a poor match and sounds

nothing like you. A rating of 10 indicates that the statement is a perfect match and describes you very

well. [Rotate Statements]

COMPETENCE IN ABILITY TO

PERFORM THE TASK. Poor Match Perfect Match

a. I am good at accessing and using professionals like accountants, tax agents and business advisors about my business

1 2 3 4 5 6 7 8 9 10

b. I have a good understanding of accounting and bookkeeping

1 2 3 4 5 6 7 8 9 10

c. I am confident that my business’ finances are being well managed

1 2 3 4 5 6 7 8 9 10

d. I am confident using accounting software to manage my business

1 2 3 4 5 6 7 8 9 10

e. I know how and where to get information for my business tax and super needs as it changes or grows

1 2 3 4 5 6 7 8 9 10

f. I understand how tax and super works and feel equipped to manage these areas of my business

1 2 3 4 5 6 7 8 9 10

g. I am confident my business is tax and super compliant

1 2 3 4 5 6 7 8 9 10


Section C –SUPPORT AND CONNECTIONS

COM-B: OPPORTUNITY (2 minutes)

C1 The next few questions will help us to learn how businesses develop their knowledge about business

management and financial management, including tax and super, through a variety of formal and

informal networks. For each person please indicate on a score of 1 to 10 where 10 is always rely on

them for advice and 1 is never rely on them for advice about tax and super. [Rotate Statements]

[INTERVIEWER NOTE: If Never Used Code AS 1]

CONNECTIONS PERFORM THE

TASK. Never rely

on for

advice

Always rely on for

advice

a. Business advisor, coach or mentor

1 2 3 4 5 6 7 8 9 10

b. Tax agent / accountant 1 2 3 4 5 6 7 8 9 10

c. Bookkeeper 1 2 3 4 5 6 7 8 9 10

d. Other owners in my business

1 2 3 4 5 6 7 8 9 10

e. Friends or family members

1 2 3 4 5 6 7 8 9 10

f. Other business owners, acquaintances or peers

1 2 3 4 5 6 7 8 9 10

g. Associations, industry bodies or the chambers of commerce etc.

1 2 3 4 5 6 7 8 9 10

h. Government 1 2 3 4 5 6 7 8 9 10


Section D – INTENT AND INCLINATION

COM-B: MOTIVATION (3–4 minutes)

D1. How important is it to improve your own knowledge about business management and financial

management right now on a scale of 1 to 10 with 1 being Not at all Important and 10 being Very Important?

Not at all

Important

Very

Important

1 2 3 4 5 6 7 8 9 10

ASK D2 IF SCORED LESS THAN 5 IN D1

D2 You indicated that it is not important to improve your own knowledge about business management and

financial management. Why are you not interested in learning more about these areas? DO NOT READ OUT

MR [PROBE FOR REASONS]

D2a. If 11 at D2 Specify below

I have an employee who manages these areas 1

I have an external consultant/advisor who manages these areas 2

I feel competent in these areas and don’t think I need to learn more 3

I will ask for help from my friends/family or business acquaintances if I need to 4

I don’t have time to invest in learning about these issues 5

I am just not interested in this area of the business 6

It is not important right now 7

My business partners take care of these matters 8

I have employees who take care of these matters 9

I don’t know where to go to learn more 10

Other Specify 11


ASK D3 IF SCORED 5 OR MORE IN D1

D3 You indicated that it is important to improve your own knowledge about business management and

financial management. Why is it important? DO NOT READ OUT – CODE INTO FRAME BELOW – MR [PROBE

FOR REASONS]


D4. How important is it to improve your own knowledge about tax and super right now on a scale of 1 to 10

with 1 being Not at all Important and 10 being Very Important?

Not at all

Important

Very

Important

1 2 3 4 5 6 7 8 9 10

ASK D5 IF SCORED LESS THAN 5 IN D1

To save money 1

To be able to do some of it myself 2

To be better informed 3

To feel more in control of my business 4

To understand what my advisor/consultant is talking about 5

Other Specify 6

I have an internal company/business accountant/financial director who manages all these

areas

1

I have an external accountant/financial consultant who manages all of these areas 2

I feel competent in these areas and don’t think I need to learn more 3


D5 You indicated that it is not important to improve your own knowledge about tax and superannuation. Why

are you not interested in learning more about these issues? DO NOT READ OUT - MR [PROBE FOR REASONS]


ASK D6 IF SCORED 5 OR MORE IN D4

D6 You indicated that it is important to improve your own knowledge about tax and superannuation. Why is it

important? DO NOT READ OUT – CODE INTO FRAME BELOW– MR [PROBE FOR REASONS]


I will ask for help from my friends/family or business acquaintances if I need to 4

I don’t have time to invest in learning about these issues 5

I am just not interested in this area of the business 6

It is not important right now 7

My business partners take care of these matters 8

I have employees who take care of these matters 9

I don’t know where to go to learn more 10

Other

To save money 1

To make sure I don’t make any mistakes 2

To be able to manage some of my tax and super requirements myself 3

To be able to manage all of my tax and super requirements myself 4

To be better informed 5

To feel more in control of my business 6

To understand what my accountant is talking about and be able to trust their advice 7

Other Specify 8


Section E – EDUCATIONAL PREFERENCES

COM-B: BEHAVIOURS – 3 minutes

E1 On a scale of 1 to 10, how useful do you think the following would be to you to build your business

management and financial management knowledge, including tax and super, where 10 is Very useful and 1 is

Not at all useful. [Rotate Statements]

PREFERED SOURCES TO

PERFORM THE TASK. Not at all

useful

Very useful

a. Short face to face seminars

1 2 3 4 5 6 7 8 9 10

b. Online tutorials accessible any time

1 2 3 4 5 6 7 8 9 10

c. Networking events e.g. business breakfasts

1 2 3 4 5 6 7 8 9 10

d. Live webinars with question and answer sessions

1 2 3 4 5 6 7 8 9 10

e. Case studies and examples 1 2 3 4 5 6 7 8 9 10

f. Online tools and calculators

1 2 3 4 5 6 7 8 9 10

g. Emails with important and relevant information

1 2 3 4 5 6 7 8 9 10

h. Small business expos and events

1 2 3 4 5 6 7 8 9 10

i. Community events 1 2 3 4 5 6 7 8 9 10

j. Websites 1 2 3 4 5 6 7 8 9 10

k. Online checklists and procedures

1 2 3 4 5 6 7 8 9 10

E2 I am now going to read out a number of possible providers of these types of services, can you select the top

three providers you would most prefer to use for tax and superannuation education, or training?


READ OUT, SELECT 3 ONLY

An industry association or body 1

A business support organisation in my local community 2

Accountant 3

A private business education and training provider 4

ATO 5

Other government department – local, state or federal 6

Other Specify 7

E3 And what would be your most preferred methods to build your business management and financial

management knowledge? Again, please select your three most preferred.

READ OUT, SELECT 3 ONLY

E4 Record Gender

Finally, tell us a little about yourself

E5 What age are you? DO NOT READ OUT – CODE INTO FRAME BELOW

Self-paced online training course 1

Phone consultations 2

Webpages 3

Videos 4

Face to face, classroom training courses 5

Self-guided books/manuals 6

NONE OF THESE (DO NOT READ) 7

Male 1

Female 2


E6 What is the highest level of education you have achieved?

CLOSE

R1 Thank you for your assistance, The Australian Tax Office greatly appreciates your time with this important

survey.

Would you be willing to be contacted in future in relation to this study? We may be looking for people to assist

with further evaluation and user testing of concepts resulting from this research.

R2

Could I record your contact details? These will only be used to contact you in relation to this study and will not

be passed on to any third party.

Under 20 1

21 to 29 2

30 to 39 4

40 to 49 6

50 to 59 7

60 to 69 8

Older than 70 9

Refused 99

Primary school / Junior school 1

Secondary school / Senior school 2

Certificate / trade qualification 3

Undergraduate university degree 4

Postgraduate university degree 5

Refused 99

Yes 1

No 2 Go to Val


a. Name:

b. Phone:

c. Email:

If R1 =1 go to standard close

Val: In case my supervisor needs to contact you to validate this interview, could I please have your first name?

And can I just confirm that your telephone number is:

READ OUT

STD (Vital - goes into computer)

(xx) ……………

STANDARD CLOSE:

Please read to participants:

The Australian Market and Social Research Society’s Surveyline on 1300 364 830 is available for

you to call if you would like to check that Ipsos is recognised by the society as a bona fide

research company.

new small business education€¦ · telephone survey of 600 business owners and in-depth...

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