Description
Key Statistics Australian Small Business
© Commonwealth of Australia 2011
ISBN 978-1-921916-17-5
DIISR 11/052
This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced
by any process without prior written permission from the Commonwealth. Requests and inquiries concerning
reproduction and rights should be addressed to the Department of Innovation, Industry, Science and Research,
GPO Box 9839, Canberra ACT 2601.
This publication has been 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. It is available through the
small business key facts and statistics link on the department’s website at www.innovation.gov.au.
ACKNOWLEDGEMENTS
This report was written by Megan Clark, Melissa Eaton, William Lind, Emily Pye and Laura Bateman.
Assistance was provided by Richard Snabel and Nils de Jager.
CONTACT
For inquiries about this report or to obtain a copy, contact the Manager, Economic Conditions Section,
[email protected]
iii Contents
Australian small business KEY STATISTICS
Contents
Shortened forms vi
Introduction 1
Chapter 1: Contribution of small businesses to the economy 3
De?nitions of business size 3
Introduction 3
Industry value added 3
How many people do small businesses employ? 6
Chapter 2: Number of small businesses in Australia 8
Business numbers by size 8
Small business numbers by industry sector 9
Chapter 3: Number of small businesses by state and territory 11
Business numbers by state 11
Chapter 4: Entries, exists and small business survival rates 15
Business entries and exits 15
Small business entries and exits at the industry level 16
Survival rates 16
Creative destruction 19
Chapter 5: Characteristics of small business operators 21
Demographics 21
Time spent at work, all businesses 22
Typical income of small business operators 22
Number of small business operations 23
Geographic location of small business operations 23
Chapter 6: Small business exports 24
Number of businesses exporting goods 24
Value of goods exported 24
Chapter 7: Business conditions and con?dence 26
Overall small business conditions and con?dence 26
Small business conditions versus total business conditions 28
Overall small business con?dence 30
Metropolitan and regional small business con?dence 32
Business con?dence by industry 32
Australian small business KEY STATISTICS
iv
Chapter 8: Small business access to ?nance 34
Trends in small business access to ?nance 34
Trends in interest rates on small business loans 37
Chapter 9: Innovation 39
Chapter 10: Research and development 41
Chapter 11: e-commerce 44
Business use of the internet 44
SME investment in e-commerce 46
Social media 46
Bibliography 48
Charts and tables
CHARTS
Chart 1: Contribution to industry value added by business size, 2009–10 4
Chart 2: Industry contribution to small business industry value added, 2009–10 4
Chart 3: Employment by business size, at end June 2010 6
Chart 4: Small business employment by industry, at end June 2010 6
Chart 5: Business numbers by size, June 2009 8
Chart 6: Businesses, including small business sub-categories, by size, June 2009 9
Chart 7: Small business numbers by state, 2008–09 12
Chart 8: Breakdown of small businesses within each industry by state, 2008–09 13
Chart 9: Survival rates by state, June 2007 to June 2008 16
Chart 10: Survival rates by state, June 2007 to June 2009 17
Chart 11: Survival rates by industry, June 2007 to June 2008 18
Chart 12: Survival rates by industry, June 2007 to June 2009 19
Chart 13: Male and female small business operators, June 2006 21
Chart 14: Business operators by age, all businesses, 2007 22
Chart 15: Number of small business exporters by industry, 2009–10 24
Chart 16: Value of small good exports by industry, 2009–10 25
Chart 17: ACCI small business conditions 27
Chart 18: NAB SME survey business conditions 28
Chart 19: ACCI small business and total business conditions 29
Chart 20: ACCI pro?t growth con?dence 29
Chart 21: NAB SME survey measures of business conditions 30
Chart 22: Sensis SME business con?dence 31
Data source: Sensis Business Index – Small and Medium Enterprises 31
Chart 23: NAB business con?dence 31
Chart 24: Sensis regional and metropolitan business con?dence 32
v Contents
Australian small business KEY STATISTICS
Chart 25: NAB SME business con?dence by industry 33
Chart 26: Growth in selected ?nancial aggregates 35
Chart 27: Bank lending to ‘small’ and ‘large’ business borrowers 36
Chart 28: New credit approvals—by size 36
Chart 29: Value of outstanding bank loans to ‘small’ business borrowers (i.e. loans < $2 million) by industry 37
Chart 30: RBA small business indicator rate vs. the RBA cash rate target 38
Chart 31: Barriers to innovation, 2008–09 40
Chart 32: Drivers of innovation, 2008–09 40
Chart 33: Business expenditure on research and development by business size 41
Chart 34: Annual growth in business expenditure on research and development by business size, 2008–09 42
Chart 35: Share of total BERD by business size and sector, 2008–09 43
Chart 36: Types of customers sold to 45
Chart 37: When will investment be recovered? 46
Chart 38: How is social media used? 47
TABLES
Table 1: Industry value added by sector and business size, 2009–10 5
Table 2: Employment by sector and business size, at end June 2010 7
Table 3: Business numbers by industry sector, June 2009 9
Table 4: Small business numbers within the services sector, June 2009 10
Table 5: Estimated number of small businesses by main state of operation and industry, operating
at end of ?nancial year, 2008–09 11
Table 6: Percentage of small businesses within each state by industry, 2008–09 14
Table 7: Business entries and exits by employment size, 2008–09 15
Table 8: Australia’s global rankings for starting and closing a business (rank out of 183) 20
Table 9: Typical gross weekly income of small business operators, 2006 23
Table 10: Numbers of small business operators by ‘remote area’, 2006 23
Table 11: Summary of innovative activity in Australia by business size, 2008–09 39
Table 12: Summary of information technology in Australian businesses, 2007–08 to 2008–09 44
Australian small business KEY STATISTICS
vi
Shortened forms
ABN—Australian Business Number
ABS—Australian Bureau of Statistics
ABSBR—Australian Bureau of Statistics Business Register
ACCI—Australian Chamber of Commerce and Industry
ANZSIC—Australia and New Zealand Standard Industrial Classi?cation
CPA—Chartered Practising Accountants
DIISR—Department of Innovation, Industry, Science and Research
e-commerce—electronic commerce
GST—goods and services tax
IT—information technology
ITW—income tax withholding
NAB—National Australia Bank
NAB SME—NAB small, medium and emerging businesses
RBA—Reserve Bank of Australia
R&D—research and development
SMEs—small and medium enterprises
US—United States
UK—United Kingdom
1
Introduction
Australian small business KEY STATISTICS
Introduction
This publication aims to provide a comprehensive overview of Australia’s small businesses, with emphasis on business
counts, characteristics and performance.
This publication includes chapters covering a range of issues:
Chapter 1 provides information about employment and industry value added. Small businesses are a vital part of the
Australian economy, providing almost half of total industry employment and around a third of industry value added in 2009–10.
Chapter 2 provides information on the number of small businesses in Australia and by industry sector, operating at the end
of the 2008–09 ?nancial year. There were 2 051 085 actively trading businesses in Australia as at June 2009—around 96 per
cent of these were small businesses (1 961 337).
Chapter 3 provides information on the number of small businesses by state and territory, operating at the end of the 2008–09
?nancial year. As would be expected, the largest proportions of small businesses operate in the two most populated states,
New South Wales (33.3 per cent) and Victoria (25.2 per cent).
Chapter 4 provides information about small business entries, exits and survival rates, covering ?nancial years
2006–07 to 2008–09.
Chapter 5 provides information about the typical characteristics of small business operators.
Chapter 6 provides information about small business exporters, speci?cally the number of small business exporters and the
value of the goods they export. Small business exporters account for 41.1 per cent of all businesses exporting goods, but only
0.6 per cent of the total value of goods exported.
Chapter 7 provides an overview of private sector information on small businesses. Most of?cial data on small businesses is
released with a signi?cant lag. Therefore, private sector surveys targeting small businesses can provide important information
about current conditions, expectations and concerns facing small businesses.
Chapter 8 provides information about small business access to ?nance. This was a particularly topical issue during the global
?nancial crisis and was the subject of a Senate Economic Reference Committee report in 2010.
Chapter 9 provides an overview of the proportion of small businesses that undertake innovative activity in Australia.
Innovation is predominantly undertaken by larger businesses.
Chapter 10 provides an overview of research and development conducted by small businesses. Similarly to innovation,
R&D is predominantly undertaken by larger businesses.
Chapter 11 provides information on electronic commerce (e-commerce), or the buying and selling of goods and services
over the internet. Since data was ?rst collected by the ABS in 2005–06, the uptake and prevalence of businesses with internet
access has increased signi?cantly.
Australian small business KEY STATISTICS
2
3 Chapter 1: Contribution of small businesses to the economy
Australian small business KEY STATISTICS
Chapter 1: Contribution of small
businesses to the economy
DEFINITIONS OF BUSINESS SIZE
No single de?nition of a small business will suit all the needs of government or the private sector. This is re?ected in the
many different ways a small business can be de?ned. The two most common ways of de?ning an Australian small business
is by annual turnover, the number of employees, or a combination of the two.
For statistical purposes, the Australian Bureau of Statistics (ABS) de?nes a small business as an actively trading business
with 0–19 employees. Micro businesses are small businesses with 0–4 employees. Actively trading businesses are
businesses that have an ABN and are actively remitting in respect of a GST role (or are businesses that are monitored directly
by the ABS and are determined to be “active”).
The ABS de?nes a medium-sized business as an actively trading business with 20–199 employees, and a large business
as an actively trading business with 200 or more employees.
The employment size ranges are based on “headcount”, rather than a measure of full-time equivalent persons. A distinction
can also be made between employing and non-employing businesses, where employing businesses have an active Income
Tax Withholding (ITW) role.
Unless otherwise stated, the statistics contained in this publication are based on the ABS de?nition of business
size outlined above.
INTRODUCTION
Small businesses make a signi?cant contribution to the Australian economy, accounting for almost half of industry
employment and contributing over a third of industry value added
1
in 2009-10.
ABS data on small business employment and industry value added is constrained to selected industries. It excludes ?nancial
and insurance services, and the general government component of public administration and safety, education and training
and health care and social assistance. The statistics (including percentage shares) in this chapter re?ect this limitation.
INDUSTRY VALUE ADDED
Chart 1 shows a comparison of industry value added between small, medium and large businesses. Small businesses
contributed around 35 per cent of industry value added in 2009–10, compared with 42 per cent contributed by large
businesses and 22 per cent by medium-sized businesses.
2
1 Industry value added is the measure of the contribution by businesses in each industry to gross domestic product.
2 ABS Cat. No. 8155.0. Numbers may not sum to total due to rounding.
Australian small business KEY STATISTICS
4
Chart 1: Contribution to industry value added by business size, 2009–10
Data source: ABS Cat. No. 8155.0.
Chart 2 shows that over 85 per cent of the total small business contribution to industry value added is attributable to
small businesses in the services sectors. Around 6 per cent is attributable to small businesses in the manufacturing
sector, almost 6 per cent to small businesses in the agriculture, forestry and ?shing sector and almost 3 per cent to
small businesses in the mining sector. Among the services sectors, almost 16 per cent of the total small business
contribution to industry value added is attributable to the construction services industry subsector, around 13 per cent
to the professional, scienti?c and technical services subsector and over 12 per cent to the rental, hiring and real estate
services subsector.
Chart 2: Industry contribution to small business industry value added, 2009–10
Data source: ABS Cat. No. 8155.0.
Table 1 shows that almost 83 per cent of total agriculture, forestry and ?shing industry value added is attributable to
small businesses, compared with around 40 per cent in the services sector, 19 per cent in the manufacturing sector
and around 9 per cent in the mining sector.
Small 35.3%
Large 42.2%
Medium 22.4%
Services 85.2%
Manufacturing 6.3%
Mining 2.7%
Agriculture 5.8%
5 Chapter 1: Contribution of small businesses to the economy
Australian small business KEY STATISTICS
Table 1: Industry value added by sector and business size, 2009–10
Business size
Industry sector
(selected industries only
—see ‘Note 1’ for exclusions)
Small
(0–19
employees)
Medium
(20–199
employees)
Large
(200+
employees) Total
Small business
share of gross
value added in
each sector
($m) ($m) ($m) ($m) %
Agriculture, forestry and ?shing 16 919 2986 506 20 411 82.9
Mining 7976 15 368 64 463 87 807 9.1
Manufacturing 18 482 28 314 50 013 96 809 19.1
Services 250 632 140 167 236 421 627 220 40.0
Electricity, gas, water and waste services 2141 3590 26 357 32 088 6.7
Construction 46 549 17 908 19 365 83 822 55.5
Wholesale trade 16 941 17 541 20 763 55 246 30.7
Retail trade 23 644 12 278 27 720 63 641 37.2
Accommodation and food services 13 471 10 617 6956 31 044 43.4
Transport, postal and warehousing 14 801 9548 27 911 52 260 28.3
Information media and telecommunications 3000 3246 28 782 35 029 8.6
Rental, hiring and real estate services 36 675 5424 7375 49 475 74.1
Professional, scienti?c and technical services 38 728 21 282 23 886 83 895 46.2
Administrative and support services 13 539 9954 15 164 38 656 35.0
Public administration and safety (private) 1276 938 1461 3675 34.7
Education and training (private) 2900 7813 5918 16 631 17.4
Health care and social assistance (private) 20 339 10 923 17 380 48 642 41.8
Arts and recreation services 2626 2540 4850 10 016 26.2
Other services 14 002 6565 2533 23 100 60.6
TOTAL SELECTED INDUSTRIES 294 009 186 836 351 402 832 247 35.3
Data source: ABS Cat. No. 8155.0.
Note 1: Selected industries. Excludes ?nancial and insurance services, and the general government component of public administration and safety, education
and training and health care and social assistance.
Note 2: Items may not sum to total due to rounding.
Australian small business KEY STATISTICS
6
HOW MANY PEOPLE DO SMALL BUSINESSES EMPLOY?
Chart 3 shows that small businesses provided employment for almost half of total industry employment in 2009–10,
which equates to almost 4.8 million people.
3
Chart 3: Employment by business size, at end June 2010
Data source: ABS Cat. No. 8155.0.
Chart 4 shows that around 85 per cent of total small business employment is within the services sectors, compared
with 8 per cent in agriculture, forestry and ?shing, around 6 per cent in manufacturing and less than 1 per cent in
mining. Around 14 per cent of total small business employment is in the construction subsector, followed by
12 per cent in professional, scienti?c and technical services and 10 per cent in retail trade.
Chart 4: Small business employment by industry, at end June 2010
Data source: ABS Cat. No. 8155.0.
3 ABS Cat. No. 8155.0.
Large 29.5%
Small 47.2%
Medium 23.3%
Services 85.1%
Manufacturing 6.1%
Agriculture 8.4%
Mining 0.4%
7 Chapter 1: Contribution of small businesses to the economy
Australian small business KEY STATISTICS
Table 2 shows that small businesses account for 85.7 per cent of employment in the agriculture, forestry and ?shing sector,
compared with 47.6 per cent in the services sector, 30.2 per cent in the manufacturing sector and 13.9 per cent
in the mining sector.
Table 2: Employment by sector and business size, at end June 2010
Business size
Industry sector
(selected industries only
—see ‘Note 1’ for exclusions)
Small
(0–19
employees)
Medium
(20–199
employees)
Large
(200+
employees) Total
Small
business
share of
employment
in each
sector
(‘000s) (‘000s) (‘000s) (‘000s) %
Agriculture, forestry and ?shing 400 55 12 467 85.7
Mining 20 25 99 144 13.9
Manufacturing 288 302 364 955 30.2
Services 4040 1958 2496 8492 47.6
Electricity, gas, water and waste services 15 16 77 107 14.0
Construction 686 163 146 994 69.0
Wholesale trade 218 169 162 548 39.8
Retail trade 497 234 559 1290 38.5
Accommodation and food services 468 235 183 886 52.8
Transport, postal and warehousing 245 82 222 550 44.5
Information media and telecommunications 39 32 106 177 22.0
Rental, hiring and real estate services 286 48 30 363 78.8
Professional, scienti?c and technical services 557 202 181 941 59.2
Administrative and support services 249 206 263 718 34.7
Public administration and safety (private) 22 22 23 66 33.3
Education and training (private) 93 136 93 322 28.9
Health care and social assistance (private) 297 247 336 880 33.8
Arts and recreation services 69 56 66 192 35.9
Other services 299 110 49 458 65.3
TOTAL SELECTED INDUSTRIES 4747 2339 2970 10 057 47.2
Data source: ABS Cat. No. 8155.0.
Note 1: Selected industries. Excludes ?nancial and insurance services, and the general government component of public administration and safety,
education and training and health care and social assistance.
Note 2: Items may not sum to total due to rounding.
8
Australian small business KEY STATISTICS
Chapter 2: Number of small
businesses in Australia
BUSINESS NUMBERS BY SIZE
There were 2 051 085 actively trading businesses in Australia as at June 2009. Chart 5 shows that of these, around
96 per cent were small businesses (1 961 337), 4 per cent were medium-sized businesses and less than 1 per cent
were large businesses.
Chart 5: Business numbers by size, June 2009
Data source: ABS Cat. No. 8165.0.
Chart 6 shows the numbers of businesses by size, and includes the following small businesses sub-categories: non-
employing, employing micro (1–4 employees) and the remaining small businesses (5–19 employees). Non-employing
businesses numbered the most, accounting for 60 per cent (1 230 282) of total businesses, followed by employing micro
businesses, which accounted for 24.2 per cent (497 098) and the remaining small businesses, which accounted for
11.4 per cent (233 957). Medium-sized businesses accounted for 4.1 per cent (83 399) of total businesses, while large
businesses accounted for 0.3 per cent (6 349).
Small 95.6%
Large 0.3%
Medium 4.1%
9 Chapter 2: Number of small businesses in Australia
Australian small business KEY STATISTICS
Chart 6: Businesses, including small business sub-categories, by size, June 2009
Data source: ABS Cat. No. 8165.0.
SMALL BUSINESS NUMBERS BY INDUSTRY SECTOR
Table 3 shows that around 83 per cent of small businesses were active in various services sectors in June 2009, over
10 per cent were in the agriculture, forestry and ?shing sector, and the remaining small businesses operated in the
manufacturing sector (around 4 per cent), the mining sector (less than 1 per cent), or were not classi?ed to a sector (over
2 per cent).
Table 3: Business numbers by industry sector, June 2009
Industry sector
Number of businesses
(% of all businesses)
Number of small businesses
(% of total small businesses)
Small business share of industry
sector (%)
Agriculture, forestry and ?shing
203 810
(9.9)
199 312
(10.2) 97.8
Mining
7950
(0.4)
7225
(0.4) 90.9
Manufacturing
91 839
(4.5)
81 051
(4.1) 88.3
Services
1 703 564
(83.1)
1 629 978
(83.1) 95.7
Not classi?ed
44 068
(2.1)
43 801
(2.2) 99.4
TOTAL 2 051 085 1 961 337 95.6
Data source: ABS Cat. No. 8165.0, datacube 9.
Please note: the sum of businesses in each industry will not sum to the published totals. For further information, please refer to the Quality Declaration
available from:http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8165.0Explanatory%20Notes1Jun%202007%20to%20Jun%202009?OpenDocument.
Percentage shares are based on the total calculated from the sum of industries and not on the published totals.
Non-employing
60.0%
Employing micro
(1-4 employees)
24.2%
Other small
(5-19 employees)
11.4%
Medium
(20-199 employees)
4.1%
Large
(200+ employees)
0.3%
10
Australian small business KEY STATISTICS
The services sector is made up of diverse subsectors. Table 4 provides a breakdown of small business numbers for each
services subsector. The largest services subsector in terms of business numbers was construction, followed by professional,
scienti?c and technical services. The smallest services industry subsector was electricity, gas, water and waste services,
followed by public administration and safety.
Table 4: Small business numbers within the services sector, June 2009
Services subsectors Number of businesses
Number of small
businesses
Small business share of
services subsector (%)
Construction 341 618 333 744 97.7
Professional, scienti?c and technical services 231 465 224 257 96.9
Rental, hiring and real estate services 217 464 214 050 98.4
Financial and insurance services 149 645 147 302 98.4
Transport, postal and warehousing 133 263 129 775 97.4
Retail trade 139 609 128 678 92.2
Health care and social assistance 92 395 87 700 94.9
Other services 85 476 82 978 97.1
Administrative and support services 76 561 70 414 92.0
Wholesale trade 76 302 70 363 92.2
Accommodation and food services 77 111 63 930 82.9
Arts and recreation services 27 496 26 026 94.7
Education and training 23 551 21 622 91.8
Information media and telecommunications 17 986 16 873 93.8
Public administration and safety 8053 7147 88.7
Electricity, gas, water and waste services 5569 5119 91.9
TOTAL SERVICES 1 703 564 1 629 978 95.7
Data source: ABS Cat. No. 8165.0, datacube 9.
11 Chapter 3: Number of small businesses by state and territory
Australian small business KEY STATISTICS
Chapter 3: Number of small
businesses by state and territory
BUSINESS NUMBERS BY STATE
4
The ABS publishes statistics on the number of businesses by state and territory based on the main state of operation.
Table 5 shows the breakdown of these small business numbers by state and territory and by industry.
Table 5: Estimated number of small businesses by main state of operation
5
and industry
Operating at end of ?nancial year, 2008–09
NSW Vic Qld SA WA Tas NT ACT
Currently
Unknown Australia
Agriculture, forestry
and ?shing 58 637 47 080 45 338 19 988 20 299 6248 1014 590 105 199 299
Mining 1366 831 1748 487 2575 96 87 30 3 7223
Manufacturing 25 440 21 987 15 995 6104 8637 1644 492 618 129 81 046
Services industries 553 043 414 101 326 925 109 191 166 296 27 343 10 894 21 542 637 1 629 972
Not classi?ed 13 968 11 001 9470 2659 5004 656 351 521 176 43 806
TOTAL SMALL
BUSINESSES 652 454 495 000 399 476 138 429 202 811 35 987 12 838 23 301 1050 1 961 337
Data source: ABS Cat. No. 8165.0.
Please note: the sum of small businesses in each state/territory will not sum to the published total for Australia. For further information, please refer to
the Quality Declaration available from:http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8165.0Explanatory%20Notes1Jun%202007%20to%20Jun%20
2009?OpenDocument
The ABS reports that at June 2009, the proportion of businesses by state (as de?ned as the main state of operation) was
broadly in line with the proportion of Australia’s population by state. Chart 7 shows that the same is true for small businesses,
with the largest number of small businesses present in the two most populated states, New South Wales (33.3 per cent) and
Victoria (25.2 per cent).
4 A very small percentage of businesses are not associated with a state or territory. They are classi?ed as ‘unknown’ and comprise less than
0.1% of all small businesses.
5 ABS de?nes Main State as ‘For businesses in the non pro?led population, Main State refers to the state or territory of the main business address.
For businesses in the pro?led population, Main State refers to the state or territory with the highest employment’.
12
Australian small business KEY STATISTICS
Chart 7: Small business numbers by state, 2008–09
ACT 1.2%
unknown 0.1%
NSW 33.3%
NT 0.7%
Tas 1.8%
SA 7.1%
WA 10.3%
Vic 25.2%
Qld 20.4%
Data source: ABS Cat. No. 8165.0.
Chart 8 shows the proportion of small businesses within each industry from each state or territory. Excluding the mining
sector, the number of small businesses from each state are distributed similarly across each industry, with the largest share
of small businesses in each industry attributable to New South Wales, followed by Victoria and Queensland. Within the mining
sector, the majority of small mining businesses are in Western Australia, followed by Queensland, New South Wales and
Victoria.
13 Chapter 3: Number of small businesses by state and territory
Australian small business KEY STATISTICS
Chart 8: Breakdown of small businesses within each industry by state, 2008–09
Data source: ABS Cat. No. 8165.0.
ACT 0.3%
unknown 0.1%
NSW 29.4%
NT 0.5%
Tas 3.1%
SA 10.0%
WA 10.2%
Vic 23.6%
Qld 22.7%
Agriculture
ACT 0.4%
NSW 18.9%
Vic 11.5%
NT 1.2%
Tas 1.3%
WA 35.7% SA 6.7%
Qld 24.2%
Mining
ACT 0.8%
unknown 0.2%
NSW 31.4%
NT 0.6%
Tas 2.0%
SA 7.5%
WA 10.7%
Vic 27.1%
Qld 19.7%
Manufacturing
ACT 1.3%
NSW 33.9%
NT 0.7%
Tas 1.7%
WA 10.2%
SA 6.7%
Vic 25.4%
Qld 20.1%
Services
14
Australian small business KEY STATISTICS
Table 6 shows that the distribution of small business numbers across industries within each state generally follows the
distribution of small businesses across industries for the whole of Australia. As such, the services sectors comprise the
largest proportion of small businesses within each state, followed by agriculture, manufacturing and mining.
Tasmania has the smallest proportion of small businesses in the services sector but the largest proportion of small
businesses in the agriculture sector. On the other hand, the Australian Capital Territory has the smallest proportion of small
businesses in the agriculture, mining and manufacturing sectors but a signi?cantly larger proportion of small businesses
in the services sector. New South Wales, Victoria and Queensland have a similar distribution of small businesses across the
industries. Western Australia has the highest proportion of small businesses in the mining sector but a relatively similar
distribution of small businesses to the other states across the remaining industries.
Table 6: Percentage of small businesses within each state by industry, 2008–09
Agriculture (%) Mining (%) Manufacturing (%) Services (%) Not classi?ed (%)
NSW 9.0 0.2 3.9 84.8 2.1
Vic 9.5 0.2 4.4 83.7 2.2
Qld 11.3 0.4 4.0 81.8 2.4
SA 14.4 0.4 4.4 78.9 1.9
WA 10.0 1.3 4.3 82.0 2.5
Tas 17.4 0.3 4.6 76.0 1.8
NT 7.9 0.7 3.8 84.9 2.7
ACT 2.5 0.1 2.7 92.5 2.2
Unknown 10.0 0.3 12.3 60.7 16.8
Data source: ABS Cat. No. 8165.0.
15
Australian small business KEY STATISTICS
Chapter 4: Entries, exits and small business survival rates
Chapter 4: Entries, exits and small
business survival rates
The most recent data available pertaining to business entries
6
and exits
7
was released by the ABS for the period from June
2007 to June 2009. This data falls within the period of the global ?nancial crisis, while the previous data release coincided with
a period of economic expansion. Thus, the two releases show very different business entry and exit trends. It is important
to note that a business exit is not the same as a business failure. There are a number of reasons why a business may exit,
including the sale of a business or changes to a business structure. Either of these occurrences would result in a business
exit, but neither would count as a business failure. A discussion of a new measure, survival rates
8
, is also provided. Similar to
business exits, survival rates cannot be used to indicate business failures, and should be used with care.
BUSINESS ENTRIES AND EXITS
In the 2008–09 ?nancial year, 1 982 066 small businesses were operating at the start of the ?nancial year. In 2008–09,
most business entries (93.5 per cent) occurred in the non-employing and employing micro business population,
which comprises businesses employing between 0–4 employees. This was followed by the remainder of small businesses
employing 5–19 employees, which accounted for 5.2 per cent of total business entries (see Table 7).
Similarly, the largest amount of business exits (92.6 per cent) occurred in the non-employing and employing micro business
population, with the remainder of small businesses accounting for a smaller 5.4 per cent of all exits.
At the end of the ?nancial year 2008–09, there were 20 729 fewer small businesses in operation.
Table 7: Business entries and exits by employment size, 2008–09
Operating at
the start of
the ?nancial
year Entries Exits
Net
movement
of surviving
businesses
Operating at
the end of
the ?nancial
year Entry rate %
Exit rate
%
Non employing 1 236 999 205 726 241 182 28 739 1 230 282 16.6 19.5
Employing
1-4 513 154 74 021 54 979 -35098 497 098 14.4 10.7
5-19 231 913 15 551 17 287 3780 233 957 6.7 7.5
Total small
business 1 982 066 295 298 313 448 -2 579 1 961 337
20-199 83610 3354 5952 2387 83 399 4.0 7.1
200 + 6113 511 467 192 6349 8.4 7.6
TOTAL 2 071 789 299 163 319 867 – 2 051 085 14.4 15.4
Data source: ABS Cat. No. 8165.0.
6 A business entry is de?ned as a business which is actively trading on the business register as at 1 June in the reference year, but not actively trading
as at 1 June the previous year.
7 A business exit is de?ned as a business which was actively trading on the business register as at 1 June in the previous year, but not actively trading
as at 1 June in the reference year.
8 A surviving business is de?ned as a business which is active on the ABSBR as at 1 June of the current year and also active in the previous year.
16
Australian small business KEY STATISTICS
SMALL BUSINESS ENTRIES AND EXITS AT THE INDUSTRY LEVEL
In 2008–09, the number of small businesses in arts and recreation services experienced the greatest decline (of 3.3 per cent),
followed closely by manufacturing, falling by 3.0 per cent, and other services which declined by 2.9 per cent. The largest
increase in the number of small businesses in 2008–09 was reported in the not classi?ed category (up by 20.6 per cent),
followed by mining (up by 4.0 per cent) and healthcare and social assistance sectors (up by 1.5 per cent). As the creative
destruction section outlines, business exits do not necessarily indicate a failure, and are simply part of the dynamic nature of
entrepreneurship. Structural change is inevitable, and has occurred in the economy as a result of changes in relative prices
and shifts in the domestic and global economic climate. Such change often indicates ?exibility and adaptability in an economy.
SURVIVAL RATES
Charts 9 and 10 show a breakdown of business survival rates by state. Chart 9 shows the percentage of businesses operating
at the end of June 2007 that survived to June 2008 and shows that small businesses generally had a much lower survival
rate than medium and large businesses within each state or territory. The survival rates are the lowest in states or territories
where the proportion of small businesses is high, such as in the Northern Territory or the Australian Capital Territory.
This may re?ect the greater susceptibility of small businesses to the major economic downturn during this period.
Chart 9: Survival rates by state, June 2007 to June 2008
Data source: ABS Cat. No. 8165.0.
80.0%
85.0%
90.0%
95.0%
100.0%
NSW Vic Qld SA WA Tas NT ACT
Small (0–19) Medium (20–199) Large (200+) Total
17
Australian small business KEY STATISTICS
Chapter 4: Entries, exits and small business survival rates
Chart 10 shows the percentage of businesses operating at June 2007 that survived over the two year period to June 2009.
Survival rates for all businesses across the states are lower during this period, with small businesses again recording
the lowest survival rates. The trend of small business survival rates across the states and territories remained relatively
unchanged, with the Northern Territory, the Australian Capital Territory and Queensland having the lowest small business
survival rates.
Chart 10: Survival rates by state, June 2007 to June 2009
Data source: ABS Cat. No. 8165.0
Chart 11 shows the percentage of businesses operating at the end of June 2007 that survived to June 2008 across the major
industries. Similarly to the state and territory breakdown, small businesses recorded the lowest survival rates compared with
medium-sized and large businesses. Survival rates were highest in agriculture, where small business survival rates were
closest to the survival rates of larger sized businesses, followed by mining, services and manufacturing.
Small (0–19) Medium (20–199) Large (200+) Total
60%
65%
70%
75%
80%
85%
90%
95%
100%
NSW Vic Qld SA WA Tas NT ACT
18
Australian small business KEY STATISTICS
Chart 11: Survival rates by industry, June 2007 to June 2008
Data source: ABS Cat. No 8165.0
Chart 12 shows the percentage of businesses operating at the end of June 2007 that survived to June 2009 across the major
industries. The general trend of small business survival rates remained unchanged, with the highest survival rates being
recorded in agriculture, followed by mining, services and manufacturing.
60%
65%
70%
75%
80%
85%
90%
95%
100%
Agriculture Mining Manufacturing Services Total Industry
Small (0–19) Medium (20–199) Large (200+) Total
19
Australian small business KEY STATISTICS
Chapter 4: Entries, exits and small business survival rates
Chart 12: Survival rates by industry, June 2007 to June 2009
Data source: ABS Cat. No. 8165.0
CREATIVE DESTRUCTION
Economist Joseph Schumpeter (1942) popularised the term creative destruction to capture the idea that long-term economic
progress is driven mainly by innovation by entrepreneurs who, while creating new sources of value, also destroy the value of
older and established companies.
From an economic perspective, the phenomenon of creative destruction is not a negative concept
9
. Creative destruction is
often seen as a source of productivity growth, thus it is important to create an environment which facilitates this process.
Through the process of creative destruction more ef?cient, competitive or innovative competitors replace destroyed jobs and
businesses. While there is no data on creative destruction in Australia, the number of business entries and exits can serve as
a rough proxy. Business exit ?gures, as an indicator of the process of creative destruction are not necessarily negative,
as often a business may exit one category, only to enter a new one.
As Table 7 shows, the greatest number of entries and exits occurred within employing micro businesses in 2008-09, with
small businesses exhibiting the second highest rates of entries and exits. These ?gures characterise the dynamic and
entrepreneurial processes associated with creative destruction. Research by Davis, Haltiwanger and Schuh (1994)
10
in the
US manufacturing sector compared rates of job creation and destruction, and found that small businesses with less than
20 employees exhibited the highest job creation and job destruction numbers.
9 Although there are social costs such as job losses (which can often be temporary) and search costs.
10 Davis, S.J, Haltiwanger, J, Schuh, S (1994).
60%
65%
70%
75%
80%
85%
90%
95%
100%
Agriculture Mining Manufacturing Services Total Industry
Small (0–19) Medium (20–199) Large (200+) Total
20
Australian small business KEY STATISTICS
According to the report Doing Business 2011: Measuring Business Regulations by the World Bank and the 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 12
th
position
(see Table 8). These rankings indicate the minimal barriers to entry and exit which exist for SMEs in Australia and could
be indicative of an environment that facilitates innovation and entrepreneurship.
Table 8: Australia’s global rankings for starting and closing a business (rank out of 183)
Ease of doing business (rank) 10
Starting a business (rank) 2
Procedures (number) 2
Time (days) 2
Cost (per cent of income per capita) 0.7
Minimum capital (per cent of income per capital) 0.0
Getting credit (rank) 6
Closing a business 12
Time (years) 1.0
Cost (per cent of estate) 8
Recovery rate (cents on the dollar) 81.8
Data source: World Bank and the International Finance Corporation, 2011
As the majority of new start-up ventures occur in small and medium-sized enterprises, it is important that the
business environment fosters all aspects of the modern innovation process: creative destruction, knowledge
spillovers and entrepreneurship.
21 Chapter 5:Characteristics of small business operators
Australian small business KEY STATISTICS
Chapter 5: Characteristics of small
business operators
DEMOGRAPHICS
As shown by Chart 13, as at June 2006 (the latest available data), 68.5 per cent of small business operators;
were male and 31.5 per cent were female.
Chart 13: Male and female small business operators, June 2006
Data source: ABS Cat. No. 8175.0.
Chart 14 shows a breakdown of business operators by age (breakdown by business size is not available). The greatest number
of business owners are aged 45 to 54 years old (28.2 per cent), followed by 35 to 44 years old (26.8 per cent), 55 to 59 years old
(12.1 per cent) and 25 to 34 years old (14.3 per cent).
11
Less than 10 per cent of business operators are aged over 65 or less
than 25 years of age.
11 ABS Cat. No. 8175.0.
Male small
business operators
68.5%
Female small
business operators
31.5%
22
Australian small business KEY STATISTICS
Chart 14: Business operators by age, all businesses, 2007
Data source: ABS Cat. No. 8175.0.
TIME SPENT AT WORK, ALL BUSINESSES
As at December 2008, almost 50 per cent of business owners estimated working more than 40 hours in a typical working
week. Twenty-two per cent of business owners estimated working 41 to 50 hours, 18 per cent estimated working 51 to 70
hours, and 6 per cent estimated working over 70 hours. Of those owners estimating they worked less than 41 hours per week,
17 per cent estimated working 31 to 40 hours, 17 per cent estimated working 21 to 30 hours, 11 per cent estimated working 11
to 20 hours and 8 per cent estimated working 0 to 10 hours.
12
TYPICAL INCOME OF SMALL BUSINESS OPERATORS
As at August 2006 (latest available data), 19.2 per cent of small business operators earned a gross weekly income of between
$400 and $599. This was followed by 15.2 per cent of small business operators who earned a gross weekly income of between
$600 and $799. A total of 1.5 per cent of small business operators earned a negative or nil gross weekly income and
3.0 per cent of small business operators earned a gross weekly income of between $1 and $149 (see Table 9).
12 MYOB (2008).
35 to 44 years
26.8%
25 to 34 years
14.3%
20 to 24 years
2.5%
45 to 54 years
28.2%
55 to 59 years
12.1%
60 to 64 years
8.9%
15 to 19 years
0.5%
65 years and over
6.7%
23 Chapter 5:Characteristics of small business operators
Australian small business KEY STATISTICS
Table 9: Typical gross weekly income of small business operators, 2006
Individual gross weekly income,
small business operators, August 2006
Percentage of all
small business operators
Negative or nil income 1.5
$1 to $149 3.0
$150 to $249 5.2
$250 to $399 11.2
$400 to $599 19.2
$600 to $799 15.2
$800 to $999 12.4
$1000 to $1299 12.4
$1300 to $1599 6.8
$1600 to $1999 4.2
$2000 or more 8.8
Total 100.0
Data source: ABS Cat. No. 8175.0.
Note: May not sum to total due to rounding.
NUMBER OF SMALL BUSINESS OPERATIONS
In June 2006, around 92 per cent of all small business operators operated one business, 6 per cent operated two businesses
and 2 per cent operated three or more businesses.
13
GEOGRAPHIC LOCATION OF SMALL BUSINESS OPERATIONS
Table 10 shows that, unsurprisingly, most small business operators are located in major cities (64.8 per cent), followed by
inner regional areas (20.9 per cent).
Table 10: Numbers of small business operators by ‘remoteness area’, 2006
Remoteness area
Percentage of all
small business operators
Major cities 64.8
Inner regional Australia 20.9
Outer regional Australia 11.5
Remote Australia 2.0
Very remote Australia
Key Statistics Australian Small Business
© Commonwealth of Australia 2011
ISBN 978-1-921916-17-5
DIISR 11/052
This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced
by any process without prior written permission from the Commonwealth. Requests and inquiries concerning
reproduction and rights should be addressed to the Department of Innovation, Industry, Science and Research,
GPO Box 9839, Canberra ACT 2601.
This publication has been 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. It is available through the
small business key facts and statistics link on the department’s website at www.innovation.gov.au.
ACKNOWLEDGEMENTS
This report was written by Megan Clark, Melissa Eaton, William Lind, Emily Pye and Laura Bateman.
Assistance was provided by Richard Snabel and Nils de Jager.
CONTACT
For inquiries about this report or to obtain a copy, contact the Manager, Economic Conditions Section,
[email protected]
iii Contents
Australian small business KEY STATISTICS
Contents
Shortened forms vi
Introduction 1
Chapter 1: Contribution of small businesses to the economy 3
De?nitions of business size 3
Introduction 3
Industry value added 3
How many people do small businesses employ? 6
Chapter 2: Number of small businesses in Australia 8
Business numbers by size 8
Small business numbers by industry sector 9
Chapter 3: Number of small businesses by state and territory 11
Business numbers by state 11
Chapter 4: Entries, exists and small business survival rates 15
Business entries and exits 15
Small business entries and exits at the industry level 16
Survival rates 16
Creative destruction 19
Chapter 5: Characteristics of small business operators 21
Demographics 21
Time spent at work, all businesses 22
Typical income of small business operators 22
Number of small business operations 23
Geographic location of small business operations 23
Chapter 6: Small business exports 24
Number of businesses exporting goods 24
Value of goods exported 24
Chapter 7: Business conditions and con?dence 26
Overall small business conditions and con?dence 26
Small business conditions versus total business conditions 28
Overall small business con?dence 30
Metropolitan and regional small business con?dence 32
Business con?dence by industry 32
Australian small business KEY STATISTICS
iv
Chapter 8: Small business access to ?nance 34
Trends in small business access to ?nance 34
Trends in interest rates on small business loans 37
Chapter 9: Innovation 39
Chapter 10: Research and development 41
Chapter 11: e-commerce 44
Business use of the internet 44
SME investment in e-commerce 46
Social media 46
Bibliography 48
Charts and tables
CHARTS
Chart 1: Contribution to industry value added by business size, 2009–10 4
Chart 2: Industry contribution to small business industry value added, 2009–10 4
Chart 3: Employment by business size, at end June 2010 6
Chart 4: Small business employment by industry, at end June 2010 6
Chart 5: Business numbers by size, June 2009 8
Chart 6: Businesses, including small business sub-categories, by size, June 2009 9
Chart 7: Small business numbers by state, 2008–09 12
Chart 8: Breakdown of small businesses within each industry by state, 2008–09 13
Chart 9: Survival rates by state, June 2007 to June 2008 16
Chart 10: Survival rates by state, June 2007 to June 2009 17
Chart 11: Survival rates by industry, June 2007 to June 2008 18
Chart 12: Survival rates by industry, June 2007 to June 2009 19
Chart 13: Male and female small business operators, June 2006 21
Chart 14: Business operators by age, all businesses, 2007 22
Chart 15: Number of small business exporters by industry, 2009–10 24
Chart 16: Value of small good exports by industry, 2009–10 25
Chart 17: ACCI small business conditions 27
Chart 18: NAB SME survey business conditions 28
Chart 19: ACCI small business and total business conditions 29
Chart 20: ACCI pro?t growth con?dence 29
Chart 21: NAB SME survey measures of business conditions 30
Chart 22: Sensis SME business con?dence 31
Data source: Sensis Business Index – Small and Medium Enterprises 31
Chart 23: NAB business con?dence 31
Chart 24: Sensis regional and metropolitan business con?dence 32
v Contents
Australian small business KEY STATISTICS
Chart 25: NAB SME business con?dence by industry 33
Chart 26: Growth in selected ?nancial aggregates 35
Chart 27: Bank lending to ‘small’ and ‘large’ business borrowers 36
Chart 28: New credit approvals—by size 36
Chart 29: Value of outstanding bank loans to ‘small’ business borrowers (i.e. loans < $2 million) by industry 37
Chart 30: RBA small business indicator rate vs. the RBA cash rate target 38
Chart 31: Barriers to innovation, 2008–09 40
Chart 32: Drivers of innovation, 2008–09 40
Chart 33: Business expenditure on research and development by business size 41
Chart 34: Annual growth in business expenditure on research and development by business size, 2008–09 42
Chart 35: Share of total BERD by business size and sector, 2008–09 43
Chart 36: Types of customers sold to 45
Chart 37: When will investment be recovered? 46
Chart 38: How is social media used? 47
TABLES
Table 1: Industry value added by sector and business size, 2009–10 5
Table 2: Employment by sector and business size, at end June 2010 7
Table 3: Business numbers by industry sector, June 2009 9
Table 4: Small business numbers within the services sector, June 2009 10
Table 5: Estimated number of small businesses by main state of operation and industry, operating
at end of ?nancial year, 2008–09 11
Table 6: Percentage of small businesses within each state by industry, 2008–09 14
Table 7: Business entries and exits by employment size, 2008–09 15
Table 8: Australia’s global rankings for starting and closing a business (rank out of 183) 20
Table 9: Typical gross weekly income of small business operators, 2006 23
Table 10: Numbers of small business operators by ‘remote area’, 2006 23
Table 11: Summary of innovative activity in Australia by business size, 2008–09 39
Table 12: Summary of information technology in Australian businesses, 2007–08 to 2008–09 44
Australian small business KEY STATISTICS
vi
Shortened forms
ABN—Australian Business Number
ABS—Australian Bureau of Statistics
ABSBR—Australian Bureau of Statistics Business Register
ACCI—Australian Chamber of Commerce and Industry
ANZSIC—Australia and New Zealand Standard Industrial Classi?cation
CPA—Chartered Practising Accountants
DIISR—Department of Innovation, Industry, Science and Research
e-commerce—electronic commerce
GST—goods and services tax
IT—information technology
ITW—income tax withholding
NAB—National Australia Bank
NAB SME—NAB small, medium and emerging businesses
RBA—Reserve Bank of Australia
R&D—research and development
SMEs—small and medium enterprises
US—United States
UK—United Kingdom
1
Introduction
Australian small business KEY STATISTICS
Introduction
This publication aims to provide a comprehensive overview of Australia’s small businesses, with emphasis on business
counts, characteristics and performance.
This publication includes chapters covering a range of issues:
Chapter 1 provides information about employment and industry value added. Small businesses are a vital part of the
Australian economy, providing almost half of total industry employment and around a third of industry value added in 2009–10.
Chapter 2 provides information on the number of small businesses in Australia and by industry sector, operating at the end
of the 2008–09 ?nancial year. There were 2 051 085 actively trading businesses in Australia as at June 2009—around 96 per
cent of these were small businesses (1 961 337).
Chapter 3 provides information on the number of small businesses by state and territory, operating at the end of the 2008–09
?nancial year. As would be expected, the largest proportions of small businesses operate in the two most populated states,
New South Wales (33.3 per cent) and Victoria (25.2 per cent).
Chapter 4 provides information about small business entries, exits and survival rates, covering ?nancial years
2006–07 to 2008–09.
Chapter 5 provides information about the typical characteristics of small business operators.
Chapter 6 provides information about small business exporters, speci?cally the number of small business exporters and the
value of the goods they export. Small business exporters account for 41.1 per cent of all businesses exporting goods, but only
0.6 per cent of the total value of goods exported.
Chapter 7 provides an overview of private sector information on small businesses. Most of?cial data on small businesses is
released with a signi?cant lag. Therefore, private sector surveys targeting small businesses can provide important information
about current conditions, expectations and concerns facing small businesses.
Chapter 8 provides information about small business access to ?nance. This was a particularly topical issue during the global
?nancial crisis and was the subject of a Senate Economic Reference Committee report in 2010.
Chapter 9 provides an overview of the proportion of small businesses that undertake innovative activity in Australia.
Innovation is predominantly undertaken by larger businesses.
Chapter 10 provides an overview of research and development conducted by small businesses. Similarly to innovation,
R&D is predominantly undertaken by larger businesses.
Chapter 11 provides information on electronic commerce (e-commerce), or the buying and selling of goods and services
over the internet. Since data was ?rst collected by the ABS in 2005–06, the uptake and prevalence of businesses with internet
access has increased signi?cantly.
Australian small business KEY STATISTICS
2
3 Chapter 1: Contribution of small businesses to the economy
Australian small business KEY STATISTICS
Chapter 1: Contribution of small
businesses to the economy
DEFINITIONS OF BUSINESS SIZE
No single de?nition of a small business will suit all the needs of government or the private sector. This is re?ected in the
many different ways a small business can be de?ned. The two most common ways of de?ning an Australian small business
is by annual turnover, the number of employees, or a combination of the two.
For statistical purposes, the Australian Bureau of Statistics (ABS) de?nes a small business as an actively trading business
with 0–19 employees. Micro businesses are small businesses with 0–4 employees. Actively trading businesses are
businesses that have an ABN and are actively remitting in respect of a GST role (or are businesses that are monitored directly
by the ABS and are determined to be “active”).
The ABS de?nes a medium-sized business as an actively trading business with 20–199 employees, and a large business
as an actively trading business with 200 or more employees.
The employment size ranges are based on “headcount”, rather than a measure of full-time equivalent persons. A distinction
can also be made between employing and non-employing businesses, where employing businesses have an active Income
Tax Withholding (ITW) role.
Unless otherwise stated, the statistics contained in this publication are based on the ABS de?nition of business
size outlined above.
INTRODUCTION
Small businesses make a signi?cant contribution to the Australian economy, accounting for almost half of industry
employment and contributing over a third of industry value added
1
in 2009-10.
ABS data on small business employment and industry value added is constrained to selected industries. It excludes ?nancial
and insurance services, and the general government component of public administration and safety, education and training
and health care and social assistance. The statistics (including percentage shares) in this chapter re?ect this limitation.
INDUSTRY VALUE ADDED
Chart 1 shows a comparison of industry value added between small, medium and large businesses. Small businesses
contributed around 35 per cent of industry value added in 2009–10, compared with 42 per cent contributed by large
businesses and 22 per cent by medium-sized businesses.
2
1 Industry value added is the measure of the contribution by businesses in each industry to gross domestic product.
2 ABS Cat. No. 8155.0. Numbers may not sum to total due to rounding.
Australian small business KEY STATISTICS
4
Chart 1: Contribution to industry value added by business size, 2009–10
Data source: ABS Cat. No. 8155.0.
Chart 2 shows that over 85 per cent of the total small business contribution to industry value added is attributable to
small businesses in the services sectors. Around 6 per cent is attributable to small businesses in the manufacturing
sector, almost 6 per cent to small businesses in the agriculture, forestry and ?shing sector and almost 3 per cent to
small businesses in the mining sector. Among the services sectors, almost 16 per cent of the total small business
contribution to industry value added is attributable to the construction services industry subsector, around 13 per cent
to the professional, scienti?c and technical services subsector and over 12 per cent to the rental, hiring and real estate
services subsector.
Chart 2: Industry contribution to small business industry value added, 2009–10
Data source: ABS Cat. No. 8155.0.
Table 1 shows that almost 83 per cent of total agriculture, forestry and ?shing industry value added is attributable to
small businesses, compared with around 40 per cent in the services sector, 19 per cent in the manufacturing sector
and around 9 per cent in the mining sector.
Small 35.3%
Large 42.2%
Medium 22.4%
Services 85.2%
Manufacturing 6.3%
Mining 2.7%
Agriculture 5.8%
5 Chapter 1: Contribution of small businesses to the economy
Australian small business KEY STATISTICS
Table 1: Industry value added by sector and business size, 2009–10
Business size
Industry sector
(selected industries only
—see ‘Note 1’ for exclusions)
Small
(0–19
employees)
Medium
(20–199
employees)
Large
(200+
employees) Total
Small business
share of gross
value added in
each sector
($m) ($m) ($m) ($m) %
Agriculture, forestry and ?shing 16 919 2986 506 20 411 82.9
Mining 7976 15 368 64 463 87 807 9.1
Manufacturing 18 482 28 314 50 013 96 809 19.1
Services 250 632 140 167 236 421 627 220 40.0
Electricity, gas, water and waste services 2141 3590 26 357 32 088 6.7
Construction 46 549 17 908 19 365 83 822 55.5
Wholesale trade 16 941 17 541 20 763 55 246 30.7
Retail trade 23 644 12 278 27 720 63 641 37.2
Accommodation and food services 13 471 10 617 6956 31 044 43.4
Transport, postal and warehousing 14 801 9548 27 911 52 260 28.3
Information media and telecommunications 3000 3246 28 782 35 029 8.6
Rental, hiring and real estate services 36 675 5424 7375 49 475 74.1
Professional, scienti?c and technical services 38 728 21 282 23 886 83 895 46.2
Administrative and support services 13 539 9954 15 164 38 656 35.0
Public administration and safety (private) 1276 938 1461 3675 34.7
Education and training (private) 2900 7813 5918 16 631 17.4
Health care and social assistance (private) 20 339 10 923 17 380 48 642 41.8
Arts and recreation services 2626 2540 4850 10 016 26.2
Other services 14 002 6565 2533 23 100 60.6
TOTAL SELECTED INDUSTRIES 294 009 186 836 351 402 832 247 35.3
Data source: ABS Cat. No. 8155.0.
Note 1: Selected industries. Excludes ?nancial and insurance services, and the general government component of public administration and safety, education
and training and health care and social assistance.
Note 2: Items may not sum to total due to rounding.
Australian small business KEY STATISTICS
6
HOW MANY PEOPLE DO SMALL BUSINESSES EMPLOY?
Chart 3 shows that small businesses provided employment for almost half of total industry employment in 2009–10,
which equates to almost 4.8 million people.
3
Chart 3: Employment by business size, at end June 2010
Data source: ABS Cat. No. 8155.0.
Chart 4 shows that around 85 per cent of total small business employment is within the services sectors, compared
with 8 per cent in agriculture, forestry and ?shing, around 6 per cent in manufacturing and less than 1 per cent in
mining. Around 14 per cent of total small business employment is in the construction subsector, followed by
12 per cent in professional, scienti?c and technical services and 10 per cent in retail trade.
Chart 4: Small business employment by industry, at end June 2010
Data source: ABS Cat. No. 8155.0.
3 ABS Cat. No. 8155.0.
Large 29.5%
Small 47.2%
Medium 23.3%
Services 85.1%
Manufacturing 6.1%
Agriculture 8.4%
Mining 0.4%
7 Chapter 1: Contribution of small businesses to the economy
Australian small business KEY STATISTICS
Table 2 shows that small businesses account for 85.7 per cent of employment in the agriculture, forestry and ?shing sector,
compared with 47.6 per cent in the services sector, 30.2 per cent in the manufacturing sector and 13.9 per cent
in the mining sector.
Table 2: Employment by sector and business size, at end June 2010
Business size
Industry sector
(selected industries only
—see ‘Note 1’ for exclusions)
Small
(0–19
employees)
Medium
(20–199
employees)
Large
(200+
employees) Total
Small
business
share of
employment
in each
sector
(‘000s) (‘000s) (‘000s) (‘000s) %
Agriculture, forestry and ?shing 400 55 12 467 85.7
Mining 20 25 99 144 13.9
Manufacturing 288 302 364 955 30.2
Services 4040 1958 2496 8492 47.6
Electricity, gas, water and waste services 15 16 77 107 14.0
Construction 686 163 146 994 69.0
Wholesale trade 218 169 162 548 39.8
Retail trade 497 234 559 1290 38.5
Accommodation and food services 468 235 183 886 52.8
Transport, postal and warehousing 245 82 222 550 44.5
Information media and telecommunications 39 32 106 177 22.0
Rental, hiring and real estate services 286 48 30 363 78.8
Professional, scienti?c and technical services 557 202 181 941 59.2
Administrative and support services 249 206 263 718 34.7
Public administration and safety (private) 22 22 23 66 33.3
Education and training (private) 93 136 93 322 28.9
Health care and social assistance (private) 297 247 336 880 33.8
Arts and recreation services 69 56 66 192 35.9
Other services 299 110 49 458 65.3
TOTAL SELECTED INDUSTRIES 4747 2339 2970 10 057 47.2
Data source: ABS Cat. No. 8155.0.
Note 1: Selected industries. Excludes ?nancial and insurance services, and the general government component of public administration and safety,
education and training and health care and social assistance.
Note 2: Items may not sum to total due to rounding.
8
Australian small business KEY STATISTICS
Chapter 2: Number of small
businesses in Australia
BUSINESS NUMBERS BY SIZE
There were 2 051 085 actively trading businesses in Australia as at June 2009. Chart 5 shows that of these, around
96 per cent were small businesses (1 961 337), 4 per cent were medium-sized businesses and less than 1 per cent
were large businesses.
Chart 5: Business numbers by size, June 2009
Data source: ABS Cat. No. 8165.0.
Chart 6 shows the numbers of businesses by size, and includes the following small businesses sub-categories: non-
employing, employing micro (1–4 employees) and the remaining small businesses (5–19 employees). Non-employing
businesses numbered the most, accounting for 60 per cent (1 230 282) of total businesses, followed by employing micro
businesses, which accounted for 24.2 per cent (497 098) and the remaining small businesses, which accounted for
11.4 per cent (233 957). Medium-sized businesses accounted for 4.1 per cent (83 399) of total businesses, while large
businesses accounted for 0.3 per cent (6 349).
Small 95.6%
Large 0.3%
Medium 4.1%
9 Chapter 2: Number of small businesses in Australia
Australian small business KEY STATISTICS
Chart 6: Businesses, including small business sub-categories, by size, June 2009
Data source: ABS Cat. No. 8165.0.
SMALL BUSINESS NUMBERS BY INDUSTRY SECTOR
Table 3 shows that around 83 per cent of small businesses were active in various services sectors in June 2009, over
10 per cent were in the agriculture, forestry and ?shing sector, and the remaining small businesses operated in the
manufacturing sector (around 4 per cent), the mining sector (less than 1 per cent), or were not classi?ed to a sector (over
2 per cent).
Table 3: Business numbers by industry sector, June 2009
Industry sector
Number of businesses
(% of all businesses)
Number of small businesses
(% of total small businesses)
Small business share of industry
sector (%)
Agriculture, forestry and ?shing
203 810
(9.9)
199 312
(10.2) 97.8
Mining
7950
(0.4)
7225
(0.4) 90.9
Manufacturing
91 839
(4.5)
81 051
(4.1) 88.3
Services
1 703 564
(83.1)
1 629 978
(83.1) 95.7
Not classi?ed
44 068
(2.1)
43 801
(2.2) 99.4
TOTAL 2 051 085 1 961 337 95.6
Data source: ABS Cat. No. 8165.0, datacube 9.
Please note: the sum of businesses in each industry will not sum to the published totals. For further information, please refer to the Quality Declaration
available from:http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8165.0Explanatory%20Notes1Jun%202007%20to%20Jun%202009?OpenDocument.
Percentage shares are based on the total calculated from the sum of industries and not on the published totals.
Non-employing
60.0%
Employing micro
(1-4 employees)
24.2%
Other small
(5-19 employees)
11.4%
Medium
(20-199 employees)
4.1%
Large
(200+ employees)
0.3%
10
Australian small business KEY STATISTICS
The services sector is made up of diverse subsectors. Table 4 provides a breakdown of small business numbers for each
services subsector. The largest services subsector in terms of business numbers was construction, followed by professional,
scienti?c and technical services. The smallest services industry subsector was electricity, gas, water and waste services,
followed by public administration and safety.
Table 4: Small business numbers within the services sector, June 2009
Services subsectors Number of businesses
Number of small
businesses
Small business share of
services subsector (%)
Construction 341 618 333 744 97.7
Professional, scienti?c and technical services 231 465 224 257 96.9
Rental, hiring and real estate services 217 464 214 050 98.4
Financial and insurance services 149 645 147 302 98.4
Transport, postal and warehousing 133 263 129 775 97.4
Retail trade 139 609 128 678 92.2
Health care and social assistance 92 395 87 700 94.9
Other services 85 476 82 978 97.1
Administrative and support services 76 561 70 414 92.0
Wholesale trade 76 302 70 363 92.2
Accommodation and food services 77 111 63 930 82.9
Arts and recreation services 27 496 26 026 94.7
Education and training 23 551 21 622 91.8
Information media and telecommunications 17 986 16 873 93.8
Public administration and safety 8053 7147 88.7
Electricity, gas, water and waste services 5569 5119 91.9
TOTAL SERVICES 1 703 564 1 629 978 95.7
Data source: ABS Cat. No. 8165.0, datacube 9.
11 Chapter 3: Number of small businesses by state and territory
Australian small business KEY STATISTICS
Chapter 3: Number of small
businesses by state and territory
BUSINESS NUMBERS BY STATE
4
The ABS publishes statistics on the number of businesses by state and territory based on the main state of operation.
Table 5 shows the breakdown of these small business numbers by state and territory and by industry.
Table 5: Estimated number of small businesses by main state of operation
5
and industry
Operating at end of ?nancial year, 2008–09
NSW Vic Qld SA WA Tas NT ACT
Currently
Unknown Australia
Agriculture, forestry
and ?shing 58 637 47 080 45 338 19 988 20 299 6248 1014 590 105 199 299
Mining 1366 831 1748 487 2575 96 87 30 3 7223
Manufacturing 25 440 21 987 15 995 6104 8637 1644 492 618 129 81 046
Services industries 553 043 414 101 326 925 109 191 166 296 27 343 10 894 21 542 637 1 629 972
Not classi?ed 13 968 11 001 9470 2659 5004 656 351 521 176 43 806
TOTAL SMALL
BUSINESSES 652 454 495 000 399 476 138 429 202 811 35 987 12 838 23 301 1050 1 961 337
Data source: ABS Cat. No. 8165.0.
Please note: the sum of small businesses in each state/territory will not sum to the published total for Australia. For further information, please refer to
the Quality Declaration available from:http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8165.0Explanatory%20Notes1Jun%202007%20to%20Jun%20
2009?OpenDocument
The ABS reports that at June 2009, the proportion of businesses by state (as de?ned as the main state of operation) was
broadly in line with the proportion of Australia’s population by state. Chart 7 shows that the same is true for small businesses,
with the largest number of small businesses present in the two most populated states, New South Wales (33.3 per cent) and
Victoria (25.2 per cent).
4 A very small percentage of businesses are not associated with a state or territory. They are classi?ed as ‘unknown’ and comprise less than
0.1% of all small businesses.
5 ABS de?nes Main State as ‘For businesses in the non pro?led population, Main State refers to the state or territory of the main business address.
For businesses in the pro?led population, Main State refers to the state or territory with the highest employment’.
12
Australian small business KEY STATISTICS
Chart 7: Small business numbers by state, 2008–09
ACT 1.2%
unknown 0.1%
NSW 33.3%
NT 0.7%
Tas 1.8%
SA 7.1%
WA 10.3%
Vic 25.2%
Qld 20.4%
Data source: ABS Cat. No. 8165.0.
Chart 8 shows the proportion of small businesses within each industry from each state or territory. Excluding the mining
sector, the number of small businesses from each state are distributed similarly across each industry, with the largest share
of small businesses in each industry attributable to New South Wales, followed by Victoria and Queensland. Within the mining
sector, the majority of small mining businesses are in Western Australia, followed by Queensland, New South Wales and
Victoria.
13 Chapter 3: Number of small businesses by state and territory
Australian small business KEY STATISTICS
Chart 8: Breakdown of small businesses within each industry by state, 2008–09
Data source: ABS Cat. No. 8165.0.
ACT 0.3%
unknown 0.1%
NSW 29.4%
NT 0.5%
Tas 3.1%
SA 10.0%
WA 10.2%
Vic 23.6%
Qld 22.7%
Agriculture
ACT 0.4%
NSW 18.9%
Vic 11.5%
NT 1.2%
Tas 1.3%
WA 35.7% SA 6.7%
Qld 24.2%
Mining
ACT 0.8%
unknown 0.2%
NSW 31.4%
NT 0.6%
Tas 2.0%
SA 7.5%
WA 10.7%
Vic 27.1%
Qld 19.7%
Manufacturing
ACT 1.3%
NSW 33.9%
NT 0.7%
Tas 1.7%
WA 10.2%
SA 6.7%
Vic 25.4%
Qld 20.1%
Services
14
Australian small business KEY STATISTICS
Table 6 shows that the distribution of small business numbers across industries within each state generally follows the
distribution of small businesses across industries for the whole of Australia. As such, the services sectors comprise the
largest proportion of small businesses within each state, followed by agriculture, manufacturing and mining.
Tasmania has the smallest proportion of small businesses in the services sector but the largest proportion of small
businesses in the agriculture sector. On the other hand, the Australian Capital Territory has the smallest proportion of small
businesses in the agriculture, mining and manufacturing sectors but a signi?cantly larger proportion of small businesses
in the services sector. New South Wales, Victoria and Queensland have a similar distribution of small businesses across the
industries. Western Australia has the highest proportion of small businesses in the mining sector but a relatively similar
distribution of small businesses to the other states across the remaining industries.
Table 6: Percentage of small businesses within each state by industry, 2008–09
Agriculture (%) Mining (%) Manufacturing (%) Services (%) Not classi?ed (%)
NSW 9.0 0.2 3.9 84.8 2.1
Vic 9.5 0.2 4.4 83.7 2.2
Qld 11.3 0.4 4.0 81.8 2.4
SA 14.4 0.4 4.4 78.9 1.9
WA 10.0 1.3 4.3 82.0 2.5
Tas 17.4 0.3 4.6 76.0 1.8
NT 7.9 0.7 3.8 84.9 2.7
ACT 2.5 0.1 2.7 92.5 2.2
Unknown 10.0 0.3 12.3 60.7 16.8
Data source: ABS Cat. No. 8165.0.
15
Australian small business KEY STATISTICS
Chapter 4: Entries, exits and small business survival rates
Chapter 4: Entries, exits and small
business survival rates
The most recent data available pertaining to business entries
6
and exits
7
was released by the ABS for the period from June
2007 to June 2009. This data falls within the period of the global ?nancial crisis, while the previous data release coincided with
a period of economic expansion. Thus, the two releases show very different business entry and exit trends. It is important
to note that a business exit is not the same as a business failure. There are a number of reasons why a business may exit,
including the sale of a business or changes to a business structure. Either of these occurrences would result in a business
exit, but neither would count as a business failure. A discussion of a new measure, survival rates
8
, is also provided. Similar to
business exits, survival rates cannot be used to indicate business failures, and should be used with care.
BUSINESS ENTRIES AND EXITS
In the 2008–09 ?nancial year, 1 982 066 small businesses were operating at the start of the ?nancial year. In 2008–09,
most business entries (93.5 per cent) occurred in the non-employing and employing micro business population,
which comprises businesses employing between 0–4 employees. This was followed by the remainder of small businesses
employing 5–19 employees, which accounted for 5.2 per cent of total business entries (see Table 7).
Similarly, the largest amount of business exits (92.6 per cent) occurred in the non-employing and employing micro business
population, with the remainder of small businesses accounting for a smaller 5.4 per cent of all exits.
At the end of the ?nancial year 2008–09, there were 20 729 fewer small businesses in operation.
Table 7: Business entries and exits by employment size, 2008–09
Operating at
the start of
the ?nancial
year Entries Exits
Net
movement
of surviving
businesses
Operating at
the end of
the ?nancial
year Entry rate %
Exit rate
%
Non employing 1 236 999 205 726 241 182 28 739 1 230 282 16.6 19.5
Employing
1-4 513 154 74 021 54 979 -35098 497 098 14.4 10.7
5-19 231 913 15 551 17 287 3780 233 957 6.7 7.5
Total small
business 1 982 066 295 298 313 448 -2 579 1 961 337
20-199 83610 3354 5952 2387 83 399 4.0 7.1
200 + 6113 511 467 192 6349 8.4 7.6
TOTAL 2 071 789 299 163 319 867 – 2 051 085 14.4 15.4
Data source: ABS Cat. No. 8165.0.
6 A business entry is de?ned as a business which is actively trading on the business register as at 1 June in the reference year, but not actively trading
as at 1 June the previous year.
7 A business exit is de?ned as a business which was actively trading on the business register as at 1 June in the previous year, but not actively trading
as at 1 June in the reference year.
8 A surviving business is de?ned as a business which is active on the ABSBR as at 1 June of the current year and also active in the previous year.
16
Australian small business KEY STATISTICS
SMALL BUSINESS ENTRIES AND EXITS AT THE INDUSTRY LEVEL
In 2008–09, the number of small businesses in arts and recreation services experienced the greatest decline (of 3.3 per cent),
followed closely by manufacturing, falling by 3.0 per cent, and other services which declined by 2.9 per cent. The largest
increase in the number of small businesses in 2008–09 was reported in the not classi?ed category (up by 20.6 per cent),
followed by mining (up by 4.0 per cent) and healthcare and social assistance sectors (up by 1.5 per cent). As the creative
destruction section outlines, business exits do not necessarily indicate a failure, and are simply part of the dynamic nature of
entrepreneurship. Structural change is inevitable, and has occurred in the economy as a result of changes in relative prices
and shifts in the domestic and global economic climate. Such change often indicates ?exibility and adaptability in an economy.
SURVIVAL RATES
Charts 9 and 10 show a breakdown of business survival rates by state. Chart 9 shows the percentage of businesses operating
at the end of June 2007 that survived to June 2008 and shows that small businesses generally had a much lower survival
rate than medium and large businesses within each state or territory. The survival rates are the lowest in states or territories
where the proportion of small businesses is high, such as in the Northern Territory or the Australian Capital Territory.
This may re?ect the greater susceptibility of small businesses to the major economic downturn during this period.
Chart 9: Survival rates by state, June 2007 to June 2008
Data source: ABS Cat. No. 8165.0.
80.0%
85.0%
90.0%
95.0%
100.0%
NSW Vic Qld SA WA Tas NT ACT
Small (0–19) Medium (20–199) Large (200+) Total
17
Australian small business KEY STATISTICS
Chapter 4: Entries, exits and small business survival rates
Chart 10 shows the percentage of businesses operating at June 2007 that survived over the two year period to June 2009.
Survival rates for all businesses across the states are lower during this period, with small businesses again recording
the lowest survival rates. The trend of small business survival rates across the states and territories remained relatively
unchanged, with the Northern Territory, the Australian Capital Territory and Queensland having the lowest small business
survival rates.
Chart 10: Survival rates by state, June 2007 to June 2009
Data source: ABS Cat. No. 8165.0
Chart 11 shows the percentage of businesses operating at the end of June 2007 that survived to June 2008 across the major
industries. Similarly to the state and territory breakdown, small businesses recorded the lowest survival rates compared with
medium-sized and large businesses. Survival rates were highest in agriculture, where small business survival rates were
closest to the survival rates of larger sized businesses, followed by mining, services and manufacturing.
Small (0–19) Medium (20–199) Large (200+) Total
60%
65%
70%
75%
80%
85%
90%
95%
100%
NSW Vic Qld SA WA Tas NT ACT
18
Australian small business KEY STATISTICS
Chart 11: Survival rates by industry, June 2007 to June 2008
Data source: ABS Cat. No 8165.0
Chart 12 shows the percentage of businesses operating at the end of June 2007 that survived to June 2009 across the major
industries. The general trend of small business survival rates remained unchanged, with the highest survival rates being
recorded in agriculture, followed by mining, services and manufacturing.
60%
65%
70%
75%
80%
85%
90%
95%
100%
Agriculture Mining Manufacturing Services Total Industry
Small (0–19) Medium (20–199) Large (200+) Total
19
Australian small business KEY STATISTICS
Chapter 4: Entries, exits and small business survival rates
Chart 12: Survival rates by industry, June 2007 to June 2009
Data source: ABS Cat. No. 8165.0
CREATIVE DESTRUCTION
Economist Joseph Schumpeter (1942) popularised the term creative destruction to capture the idea that long-term economic
progress is driven mainly by innovation by entrepreneurs who, while creating new sources of value, also destroy the value of
older and established companies.
From an economic perspective, the phenomenon of creative destruction is not a negative concept
9
. Creative destruction is
often seen as a source of productivity growth, thus it is important to create an environment which facilitates this process.
Through the process of creative destruction more ef?cient, competitive or innovative competitors replace destroyed jobs and
businesses. While there is no data on creative destruction in Australia, the number of business entries and exits can serve as
a rough proxy. Business exit ?gures, as an indicator of the process of creative destruction are not necessarily negative,
as often a business may exit one category, only to enter a new one.
As Table 7 shows, the greatest number of entries and exits occurred within employing micro businesses in 2008-09, with
small businesses exhibiting the second highest rates of entries and exits. These ?gures characterise the dynamic and
entrepreneurial processes associated with creative destruction. Research by Davis, Haltiwanger and Schuh (1994)
10
in the
US manufacturing sector compared rates of job creation and destruction, and found that small businesses with less than
20 employees exhibited the highest job creation and job destruction numbers.
9 Although there are social costs such as job losses (which can often be temporary) and search costs.
10 Davis, S.J, Haltiwanger, J, Schuh, S (1994).
60%
65%
70%
75%
80%
85%
90%
95%
100%
Agriculture Mining Manufacturing Services Total Industry
Small (0–19) Medium (20–199) Large (200+) Total
20
Australian small business KEY STATISTICS
According to the report Doing Business 2011: Measuring Business Regulations by the World Bank and the 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 12
th
position
(see Table 8). These rankings indicate the minimal barriers to entry and exit which exist for SMEs in Australia and could
be indicative of an environment that facilitates innovation and entrepreneurship.
Table 8: Australia’s global rankings for starting and closing a business (rank out of 183)
Ease of doing business (rank) 10
Starting a business (rank) 2
Procedures (number) 2
Time (days) 2
Cost (per cent of income per capita) 0.7
Minimum capital (per cent of income per capital) 0.0
Getting credit (rank) 6
Closing a business 12
Time (years) 1.0
Cost (per cent of estate) 8
Recovery rate (cents on the dollar) 81.8
Data source: World Bank and the International Finance Corporation, 2011
As the majority of new start-up ventures occur in small and medium-sized enterprises, it is important that the
business environment fosters all aspects of the modern innovation process: creative destruction, knowledge
spillovers and entrepreneurship.
21 Chapter 5:Characteristics of small business operators
Australian small business KEY STATISTICS
Chapter 5: Characteristics of small
business operators
DEMOGRAPHICS
As shown by Chart 13, as at June 2006 (the latest available data), 68.5 per cent of small business operators;
were male and 31.5 per cent were female.
Chart 13: Male and female small business operators, June 2006
Data source: ABS Cat. No. 8175.0.
Chart 14 shows a breakdown of business operators by age (breakdown by business size is not available). The greatest number
of business owners are aged 45 to 54 years old (28.2 per cent), followed by 35 to 44 years old (26.8 per cent), 55 to 59 years old
(12.1 per cent) and 25 to 34 years old (14.3 per cent).
11
Less than 10 per cent of business operators are aged over 65 or less
than 25 years of age.
11 ABS Cat. No. 8175.0.
Male small
business operators
68.5%
Female small
business operators
31.5%
22
Australian small business KEY STATISTICS
Chart 14: Business operators by age, all businesses, 2007
Data source: ABS Cat. No. 8175.0.
TIME SPENT AT WORK, ALL BUSINESSES
As at December 2008, almost 50 per cent of business owners estimated working more than 40 hours in a typical working
week. Twenty-two per cent of business owners estimated working 41 to 50 hours, 18 per cent estimated working 51 to 70
hours, and 6 per cent estimated working over 70 hours. Of those owners estimating they worked less than 41 hours per week,
17 per cent estimated working 31 to 40 hours, 17 per cent estimated working 21 to 30 hours, 11 per cent estimated working 11
to 20 hours and 8 per cent estimated working 0 to 10 hours.
12
TYPICAL INCOME OF SMALL BUSINESS OPERATORS
As at August 2006 (latest available data), 19.2 per cent of small business operators earned a gross weekly income of between
$400 and $599. This was followed by 15.2 per cent of small business operators who earned a gross weekly income of between
$600 and $799. A total of 1.5 per cent of small business operators earned a negative or nil gross weekly income and
3.0 per cent of small business operators earned a gross weekly income of between $1 and $149 (see Table 9).
12 MYOB (2008).
35 to 44 years
26.8%
25 to 34 years
14.3%
20 to 24 years
2.5%
45 to 54 years
28.2%
55 to 59 years
12.1%
60 to 64 years
8.9%
15 to 19 years
0.5%
65 years and over
6.7%
23 Chapter 5:Characteristics of small business operators
Australian small business KEY STATISTICS
Table 9: Typical gross weekly income of small business operators, 2006
Individual gross weekly income,
small business operators, August 2006
Percentage of all
small business operators
Negative or nil income 1.5
$1 to $149 3.0
$150 to $249 5.2
$250 to $399 11.2
$400 to $599 19.2
$600 to $799 15.2
$800 to $999 12.4
$1000 to $1299 12.4
$1300 to $1599 6.8
$1600 to $1999 4.2
$2000 or more 8.8
Total 100.0
Data source: ABS Cat. No. 8175.0.
Note: May not sum to total due to rounding.
NUMBER OF SMALL BUSINESS OPERATIONS
In June 2006, around 92 per cent of all small business operators operated one business, 6 per cent operated two businesses
and 2 per cent operated three or more businesses.
13
GEOGRAPHIC LOCATION OF SMALL BUSINESS OPERATIONS
Table 10 shows that, unsurprisingly, most small business operators are located in major cities (64.8 per cent), followed by
inner regional areas (20.9 per cent).
Table 10: Numbers of small business operators by ‘remoteness area’, 2006
Remoteness area
Percentage of all
small business operators
Major cities 64.8
Inner regional Australia 20.9
Outer regional Australia 11.5
Remote Australia 2.0
Very remote Australia