Australian Small Business – Key Statistics – November 2011
This report ( prepared by the Industry policy and economic analysis branch in the Industry and small business policy division of the Department of Innovation, Industry Science and Research and released this week) highlights the importance of small businesses to the Australian economy and also adds some interesting detail in respect of size and entry and exit ratios for business owners.
SME’s ( defined by the Australian bureau of statistics as employing less than 200 people ) contributed 57% of industry value added in 2009 to 2010 compared with 43% contributed by large businesses.
Over 85% of the total small-business contribution to industry value added is attributable to small businesses in the services sector.
Small businesses provided employment for almost half of total industry employment in 2009-10 which equates to almost 4.8 million people and again 85.1% of that represents the services sector.
There were 2,051,085 actively trading businesses in Australia as at June 2009, around 96% were small businesses (1,961,337) i.e. employing less than 20 people, 4% were medium-sized businesses (employing less than 200 people ) and less than 1% were large businesses.
In terms of entry and exits the report states that in total small-business there were 313,448 exits in the 2008-09 financial year, with only 6,419 exits in medium and large businesses – overall this represents an exit rate of 15.4% per annum. And whilst there were a similar number of entries during the year at the end of the year there were 20,729 fewer small businesses in operation.
The number of small businesses in arts and recreation services experience the greatest decline (3.3%) closely followed by manufacturing falling by 3% and other services which also declined by 2.9%
Detailed analysis also shows that small businesses generally had a much lower survival rate than medium and large businesses within every state and territory – this probably reflects the greater susceptibility of small businesses to the major economic downturn during the survey and research period.
According to the report Doing Business 2011: measuring business regulations by the World Bank and International Finance Corporation – Australia ranks in the top 10 of 183 economies in the world in terms of starting a new business, getting credit and ease of doing business. When it comes to closing a business, Australia is ranked in 12th position.
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