Storm Menzies started her small business more than a year ago and says she used YouTube to develop financial literacy. (ABC News: Dan Irvine )
Up to a third of small business owners do not know if they made a profit last month because they struggle with financial literacy, according to new data.
When Storm Menzies launched her small business a year ago, she expected the product design process to be her biggest challenge.
"That's like a tiny part of running a business; that's the fun part," she said.
"All the financial stuff and the actual running of the business, I had no experience doing that."
The small business owner based in Newcastle designs attachments for cosmetics to make the products more accessible for people.
But with no previous business knowledge and a lack of reliable tools available for her to learn the ropes, she turned to platforms like YouTube for help.
"The financial element is so important, but you are kind of going like, 'Where do I get support for this?'" she said.
Ms Menzies says she still has much to learn about the finance side of her business. (ABC News: Dan Irvine )
Other small business owners are having the same experience, with research from accounting platform Xero suggesting more than one-third do not know if they made a profit last month.
There were more than 2.6 million small businesses in Australia as of August last year, with Xero managing director Angad Soin saying they had a broader economic impact.
Angad Soin says the economy suffers when small businesses lack financial literacy. (ABC News: John Gunn)
"If you're running a small business and you don't know if you're turning a profit, you don't know if you can pay yourself a wage," he said.
"That has an economic impact on everyone because small businesses also usually buy and sell from other small businesses, so if you're not paying yourself a wage, they're not putting money back into the economy.
"If they're not able to know if they're turning a profit, they don't know if they can hire that next person, keeping people on staff."
