Australian finance educator Dr Kristle Romero Cortés is urging the people behind Australia’s small-to-medium enterprises (SMEs) to take their financial literacy into their own hands and balance profit with purpose.

Speaking exclusively to The Business Of, a podcast from the University of New South Wales Business School, Dr Cortés says it’s key for aspiring small business owners to be across the detail of their books, while stressing you can learn these skills on the job. 

SMEs are the backbone of the Australian economy, making up a whopping 99.8 per cent of all businesses according to Australian Bureau of Statistics data. Whether you have one employee or 100, a full-time gig or a side hustle, financial literacy is a critical driver of success. 

Dr Cortés says it’s OK to start small as you learn about concepts like market flows and cost of capital - which she demystifies on The Business Of.

“Understanding the market conditions cannot be boiled down to a TikTok video, but that doesn't mean you can't start there,” says Dr Cortés, from the UNSW School of Banking and Finance. 

Dr Cortés told host Dr Juliet Bourke, a Professor of Practice in the School of Management and Governance at UNSW Business School, that along with knowing the right questions to ask, you also need to be able to understand – and interrogate – the answers.

That way, even if you employ someone else to handle your finances, you can “feel confident in the background and the basis for the calculations”. 

“We're all aware that you don't get to launch something twice. So you definitely want to be comfortable with what you're doing and make sure you set it up for success.”

Associate Professor Kristle Romero Cortés, School of Banking and Finance, UNSW Business School

Dr Cortés says talking to a small group of trusted people about your idea can help you understand what you have a handle on already, and where you need to upskill.

Short courses and accreditations can also equip a business owner with the skills to scale up – such as completing pro forma income statements and discounted cash flow analysis.

“The accreditations help a lot, because what that’s shown is not just that they can do it, but they want to do it,” Dr Cortés says. 

“I embody the fact that there are people out there that would enjoy this, that would want to do this, that would have fun doing this, and that would have fun sharing it with other people.”

But SMEs are more than stats and figures, and Dr Cortés thinks it’s especially important for small business owners to come back to their purpose when things get overwhelming. 

"We can get all caught up in the numbers, and it could be an incredible opportunity or extremely profitable. But for a lot of this will come down to late nights and frustration and points of pain or resistance. If you know why you're doing something, it will make your life so much easier.”  

“If someone's going to be on Shark Tank, you're going to need to be versed in what the judges are going to ask you - to show your profit, or the expected turnover or the timeline. But I suspect every single one of them would still want to know why you're doing it,” Dr Cortés says.

Host Dr Juliet Bourke in the studios with Kristle Romero Cortés on The Business Of podcast

The UNSW Business School was named the AFR BOSS Best Business School for the second consecutive year in 2023. AGSM at UNSW also offers the best MBA in Australia, and their MBAX (Online) is ranked fourth in the world.  



Listen to more episodes of The Business Of wherever you get your podcasts.

For the latest news and research from UNSW Business School and AGSM @ UNSW Business School, subscribe to our industry stories at BusinessThink and follow us on LinkedIn: UNSW Business School and AGSM @ UNSW Business School