Australian Small Business – Key Statistics – November 2011 - Succession Plus

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Australian Small Business – Key Statistics – November 2011

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Australian Small Business – Key Statistics – November 2011

By , November 2, 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.

Craig West

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.