Canberra has fallen dramatically in the rankings of Australia's top startup cities, with one local business owner warning outdated processes and red tape are restricting new companies.
Canberra-Queanbeyan has fallen from the fifth best city in Australia to start a new business to 36th place in a new national study.
The capital region was outranked by dozens of regional centres, including Toowoomba, Launceston and Dubbo, with weaker business performance and slow internet speeds pulling Canberra down the rankings, the report said.
Car Mechanical Services owner and small business consultant Raffy Sgroi said Canberra's outdated registration and licensing systems, as well as increasing customer demands, were making conditions challenging for new companies.
"We're still very much doing business like the 1980s when it comes down to licensing, consumer protection," she said.
"Businesses think, you have a good idea and you're a hard worker, and that's enough to start a business ... not these days with the red tape that is around."
The analysis of Australia's 50 biggest cities by software firm Reckon rated hubs on 17 factors, including available talent, business landscape, internet speeds and cost of living.
The capital region scored highest for available talent, with the area benefiting from a large pool of young workers and high labour force participation, giving startups easier access to available workers and a greater pool of potential hires.
However, the ACT recorded its lowest scores for cost of living, marking the study's highest median monthly mortgages at $4154.22, and transport costs.
The capital region also recorded the highest costs for childcare of all 50 Australian cities.
However, Ms Sgroi said many Canberra businesses were carrying high levels of debt owed to the Australian Taxation Office and failing to adequately plan for their financial responsibilities.
"Many businesses treat their business as their mistress," she said.
"Money coming in, 'I can go and buy myself a ute, or I can go on holiday, because this month we made a lot of money'. Then when the compulsory payment coming in ... they don't have the cash flow necessary because they don't have the discipline of running a business."
The business owner also said more customers were coming into the garage with specific demands, including with mechanical diagnoses or even approximate repair costs from artificial intelligence, over the past 18 months.
Ms Sgroi said the increasing cost of living meant people were more careful about what they paid for.
"[Customers] don't even lie to you, they're coming in and they say, 'Oh, ChatGPT said to me it could be a brakes'," she said.
"We look at the car and it's not what AI told [them]... and you give them a price tag of $6000 the first perception for them is like, are you trying to rip me off?
"You need to sell yourself before you're selling your service these days, because the first thing the customer's going to click with is you."
