SME numbers – latest numbers from Bureau of statistics ( June 2011 ) - Succession Plus

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SME numbers – latest numbers from Bureau of statistics ( June 2011 )

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SME numbers – latest numbers from Bureau of statistics ( June 2011 )

By , February 7, 2012

There were 2,132,412 actively trading businesses in Australia as at June 2011

While the number of businesses declined between 2007-08 and 2008-09, there was a significant increase in the number of businesses over 2009-10 and 2010-11. Specifically, growth rates for the past four financial years were -0.1% during 2007-08, -1.0% during 2008-09, 3.6% in 2009-10 and 0.4% in 2010-11.

In comparison, Gross Domestic Product (GDP, in chain volume terms) over the corresponding periods grew by 3.8%, 1.4%, 2.3% and 2.1% respectively, while Australia’s population grew by 1.7%, 2.1%, 1.7% and 1.4% over the same periods.

The increase in the number of businesses during the financial year to June 2010 can be attributed to a significant increase in entry rates, coupled with a slight decrease in exit rates. Although the entry rate dropped somewhat in the financial year to June 2011, it remained higher than the exit rate, resulting in a slight increase in the overall counts during 2010-11. Specifically, during 2009-10, the entry rate for new businesses was 16.7% and the exit rate was 13.1%. During 2010-11, the entry rate was 13.9%, and the exit rate was 13.5%.

In terms of business survival rates, of the 2,073,793 businesses operating in June 2007, 84.6% were still operating in June 2008, 73.5% were still operating in June 2009, 66.3% were still operating in June 2010 and 60.4% were still operating in June 2011.

Of the 316,850 new business entries during 2007-08, 71.5% were still operating in June 2009, 56.8% were still operating in June 2010 and 48.6% were still operating in June 2011. As such, the survival rates for new businesses are significantly lower than for those businesses that were already established. This indicates that business survival is related to the age of the business, i.e. the longer a business survives, the greater its chances of continued survival.

Survival rates are also heavily influenced by the size of the business. For example, non-employing businesses have a significantly lower survival rate compared to employing businesses (43.3% of non-employing entries in 2007-08 were still operating in 2011, compared to 60.0% of employing entries). However, non-employing businesses account for the greatest proportion of both total businesses and business entries (61.2% of all businesses operating in June 2011 and 67.6% of business entries in 2010-11 were non-employers).

125,123 ( 5.9 % ) of SME’s turnover more than $2M.

81,000 employ 20-199 employees.

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.