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.
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