Financial literacy shouldn’t be a privilege: Let’s level the playing field for Kiwi small businesses – Bridget Snelling

Small businesses employ more than 630,000 people but struggle with financial literacy, impacting survival rates. Photo / 123rf

From the family-run dairy in Whangārei to the boutique design agency in Queenstown, small businesses knit our communities and our nation together.

Their owners share strengths in grit and entrepreneurial spirit, seeing them play through unwritten scripts like Covid and economic crisis to serve as the collective employers of over 630,000 people in Aotearoa New Zealand.

Yet there’s a key ingredient that isn’t evenly distributed amongst business owners, and is often overlooked: financial literacy.

Research conducted by the New Zealand Government has found many small business owners across the country feel uncertain or underprepared when it comes to managing their finances.

This is costing Kiwi small business owners and our country dearly – just 45% of new small businesses survive the first five years, according to Stats NZ data from 2018 to 2023.

While there are an infinite number of reasons why a business might fail, it begs the question, how many more might have survived if they had better financial nous to navigate the inevitable hurdles owning a business presents?

I’ve seen first-hand how a lack of financial confidence can quietly undermine even the most promising ventures, stunting their growth and potential.

We all stand a much better chance of succeeding when we have the appropriate tools and confidence to do so. So in a country where only one in three small business owners can correctly answer basic financial questions, the opportunity to support our small businesses to do better by paying attention to this knowledge gap is obvious.

Encouragingly, the New Zealand Government is paying attention to the importance of financial education from a young age.

In April this year, it announced that financial literacy will be embedded into the refreshed social sciences curriculum for Years 1–10, with implementation beginning in 2026.

This initiative will ensure future generations of Kiwis are equipped with the skills to make informed financial decisions, from understanding budgeting and saving to navigating taxes and investments.

Bridget Snelling, Xero country manager Aotearoa New Zealand.

While these changes will benefit the next generation, it’s too late for those who have come before them and many of today’s small business owners need better financial skills now.

This is a theme we see amongst small business owner customers, and it’s something we need to act upon now.

Xero recently launched a new programme called Know Your Numbers to provide free financial literacy education and mentoring to all small business owners in Aotearoa New Zealand, regardless of whether they use Xero or not.

And the Government’s own business portal also links to free resources to help upskill Kiwi small business owners.

But the key challenge? People don’t know what they don’t know, and need to be willing to open up and seek advice. Vulnerability is the key to taking that important first step, to invest time to upskill and seek support from trusted mentors and advisors.

Financial literacy has long been a position of privilege: more accessible to those with formal education, professional networks, or the time to seek out support. This must change.

After all, financial literacy is not just about compliance or tax time, it’s about confidence. It’s about giving business owners the ability to understand their numbers, see the bigger picture, and make decisions that move them forward.

And when more small businesses succeed, our communities, our economy and our country benefit.