Australia, the Small Business Nation

Wednesday, June 05, 2013

Australia has always been an entrepreneurial nation, with small business the backbone of the economy and the labour force. The Australian spirit of independence, a DIY attitude and the courage to give things a go are strongly demonstrated in these latest business statistics. The tough economic times and the terrain in which small business operates is having an impact, however, with only half (51%) of new business starts surviving 4 years in operation. For many Australians, the entrepreneurial dream is still alive but as demonstrated by the survival rates of new businesses, without better support, only a minority will achieve success.

Small businesses still dominate

Small businesses continue to dominate the Australian economy, with 3 in 5 Australian businesses not employing staff, and 9 in 10 businesses employing less than 20 workers. Just under a third of all businesses (29.0%) have a turnover of less than $50,000 annually, with another third (34.5%) turning over between $50,000 and $200,000 each year.

More businesses than ever but slow growth:

There is almost 1 actively trading business for every 10 Australians – more than 2.14 million of them. The total number of businesses has grown by 3.4% in the last 4 years*, while the national population has increased by 6.8%, and the GDP has grown a total of 8.5%.

Tough conditions and half new businesses don’t survive:

Highlighting the tough business environment, of all the new businesses started 4 years ago, almost half (51.0%) are no longer operating. Of the more than 2 million businesses operating in Australia 4 years ago, 2 in 5 no longer exist (38.2%), with established businesses being more likely to survive than new businesses. The longer a business is in operation the higher its chances of survival.

Independent, local and not highly technological:

97% of Australian businesses are 100% Australian owned, 95% are independently operated (not part of a group or franchise) and 87% conduct all their functions independently (are not part of joint marketing, a buying group or collaborative ventures). 93% of businesses are non-exporting (Australian sales only). 1 in 5 businesses sought a business loan or equity in the last year and for 3 in 4 of these the reason was business survival and to boost short term cash flow with just 20% seeking a financial injection for reasons of expansion. Just 43% of Australian businesses have a website and just 28% receive orders or sales via the web and internet revenue accounted for just 7.5% of all business revenue.

What kinds of businesses have been getting the most, and least, traction in our changing economic environment?

Which are the key factors that come into play in determining the success or failure of a business?

Find out in our 2013 Small Business Nation Report. Click here to download the full report.

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