It’s National Small Business Week here in the US. It’s an important opportunity to recognize the positive influence of the country’s entrepreneurs and small business owners on the economy. Small businesses are key to our economy as they create two out of every three net new jobs. With more than half of Americans either owning or working for a small business, each of us are lucky to be able to support them.
At Xero, it’s what brings us to work every day. Our purpose is to have a positive impact on the world by growing small businesses, and that is motivating. The biggest challenge in this is the ability for a small business owner to survive and thrive. While the US has one of the lowest enterprise exits rates among G7 countries, we’ve got a lot of work to do. About 80% of the country’s establishments survive the first year, but only about half survive the first five years or longer. We can do better.
Xero: Helping small businesses keep their doors open, longer
At Xero, we’re delivering the tools and the playbooks to help businesses thrive. We’re doing this through our powerful core accounting system, as well as a coordinated ecosystem of more than 500 app partners. What we’ve found is that 95% of Xero customers survive their first year and 85% of the Xero customers are still up and running at the five-year point.
Here’s the reality: small business owners get into business because they’re passionate about what they produce or do for their customers. Most want to spend their time growing their business, not managing finances. They want the business technologies and finances to just come together, and work seamlessly.
And, if you think about all the pieces of a business owner’s life — paying people, getting paid, managing cash flow and others — there’s no reason why they shouldn’t. The cloud has been the transformational technology that has unlocked the potential for business management tools, finances, accounting, banking to just work together automatically in one place.
Supporting small business with access to capital
With a small business owner’s financial institutions, government services and apps all in one platform, they have a complete view and control of their financial and business data. And the real power is that it can be customized by the business owner to work just for them and their business. It’s a vision when fully formed that’s known as the financial web.
The very foundation of a small business owner’s financial web is secure bank integrations, which enables banking, accounting and business management to come together.
One of the next steps on our financial web journey is how we support banks as we free up small business owners’ access to capital, and make it easier for them to manage cash flow and leverage banking expertise.
With a full set of historical and audited numbers in the accounting platform, banks can leverage that data to increase access to capital at the point of need and better predict cash management needs. It’s an opportunity that we’re already starting to see play out in markets like Australia.
Global small businesses, global platform
We are a global economy now, and many businesses want to be strong not just where they’re located. We want to provide to our customers this ability to create a global business.
As a global platform on a single code base, Xero can help small businesses to expand their businesses offshore. They can do business seamlessly all over the world by connecting to banks in multiple countries and using Xero’s technology partnerships with Google, Apple, Square, Paypal, Stripe and others.
Growing the small business economy is the best way to achieve sustainable and inclusive growth. By doing so, we can materially address some of the biggest social issues facing the world today: youth unemployment, economic disparity and discriminatory practices.
The world will be a better and more prosperous place when like-minded technology companies work together to establish a global ecosystem to help entrepreneurs.
Whether it be through best-in-breed technology solutions or buying from local and global small businesses, we all have a responsibility to support the small business economy, every day.