Xero has launched its new social impact initiative, Know Your Numbers, aimed at addressing the significant financial skills gap prevalent among small business owners in the UK. This initiative is driven by the foundational belief that many entrepreneurs, including the founders of Xero, have personally witnessed the challenges and resilience required to manage a business, particularly regarding its financial aspects.
As the backbone of the UK economy, the 5.3 million small businesses, including sole traders and those with up to nine employees, generate £680 billion annually. Yet, research reveals that nearly 38% of small business owners are unaware of their profitability, while 55% face challenges with cash flow management. This uncertainty often leads to financial avoidance, with over half of respondents reporting anxiety and lack of enjoyment when dealing with financial matters.
The Know Your Numbers program seeks to enhance financial literacy through accessible tools, training, and resources, including short videos and guides that address common financial challenges. Additionally, it will feature the Xero for Good Ambassador Programme, which pairs business owners with volunteer accountants and bookkeepers for mentoring support over the course of a year.
To address the broader financial skills gap, Xero emphasizes the importance of collaboration across industries and calls for improved financial education integration into the UK school curriculum. The company is also forming a Financial Confidence Taskforce aimed at advocating for increased support for small business financial literacy, while maintaining partnerships with government-backed initiatives and organizations that assist micro-businesses.
Entrepreneurs are encouraged to take advantage of the free resources provided by the Know Your Numbers program, fostering a culture where financial confidence is prioritized to promote sustainable business growth.
Why this story matters:
- The financial skills gap jeopardizes the stability of small businesses, which are vital to the UK economy.
Key takeaway:
- Know Your Numbers aims to empower small business owners with essential financial skills and support to boost their confidence.
Opposing viewpoint:
- Some may argue that financial education initiatives might not be enough to change ingrained habits or cultural perceptions surrounding finances.
