Top Aussie Small Business Trends

Small business is alive and well in the land down under and before we look at the trends here are a few statistics to show the importance of this sector to the Australian economy. 

From the Australia Bureau of Statistics there are nearly 1.9 million small businesses (defined as those employing less than 20 people) which represents 95% of all businesses. Nearly 7 out of 10 of these businesses operate from home and whilst the number of women owning a small business is increasing, 69% are operated by men. Small businesses employ 3.6 million people which equates to 47% of private sector, non agricultural employment businesses. 

To put the importance of this sector into perspective, small businesses account for about 25% of GDP and said to be capitalised at $4.3 trillion which is about 4 times as big as the Australian stock exchange. 

The year 2009 is certainly going to be challenging but as always exciting for small businesses and the key trends identified are: 

1. Connecting with Customers

Lately there have been more articles, blog posts and discussion on the importance of retaining key customers. Customer service is usually a key strength for small businesses and 2009 will see more emphasis on strengthening current customer relationships. Whilst it will be a mixture of new and old tactics I think we will see more personal contact as we go through the year. 

2.  Connecting with other Businesses

Australian small businesses are moving to utilize social media to network and developed business relationships. In 2008 Australian small business forums were launched such as the Flying Solo forum and the involvement in these will accelerate in 2009 especially if the economy declines, as a way of connecting and sharing ideas in a cost effective way. It appears the percentage of Australian small business using Twitter is quite small and while this percentage will increase it will not be a dramatic increase. 

3. Working Smarter

As conditions become tougher many Australian small business owners have already started focusing on better financial management of their businesses. They will continue to place greater emphasis on getting their invoices paid, conducting credit checks on new customers and looking at ways to receive payments up front. On the cost side their will look to streamline their business to quickly take advantage of market opportunities for growth as well as actively reducing any bank debt. 

4. Start up and Exits

In previous years when unemployment increased there was a rise in the number small business start ups, especially for those who received a redundancy package. However with the losses to superannuation funds and investments it is likely that home businesses will continue to grow as the cost involved is small, but it is unlikely that people will rush to use their redundancy to buy a franchise. Another factor regarding buying a franchise is that borrowing from banks is only going to get tougher with tighter requirements. 

For those thinking of exiting, the last few months have seen a number on the market; however, there are not as many buyers and this is unlikely to change next year. 

5. Employing Others

With the introduction of the new Labor government’s employment laws and the economic climate small businesses will not rapidly increase their staffing levels. A recent MYOB Survey found only 14% of small businesses intend to increase their employee numbers with the majority of small businesses keeping their current staff levels even though there is still a skill shortage in certain areas. This actually could be one of the opportunities for other small business who provide services as small businesses investigate outsourcing to assist their business growth. 

6.  Expanding their Presence

It is estimated that only 40% of small businesses in Australia have a website, although approximately 80% have internet access. Australian small businesses have been quite slow to establish a web presence; however this could increase more quickly next year as small businesses give more attention to the opportunities that even a basic website can offer. Also it is thought as awareness increases of blogging platforms that are free such as WordPress more small businesses may use this as a first step for a web presence before outlaying cash building their own. 

7. Embracing Technology

Australian small business will continue to embrace technology, especially where there are cost or time saving and uptake of applications such as Skype, mobile technology and Google applications etc will continue next year. This will lead to more interest in web based software applications.  However, it is unlikely there will be a fundamental shift away from packaged software in the near future for the majority of small businesses. 

8. Finding their Voice

As it is well known how important the small business sector is for the country and during 2009 and the next few years lobbying will continue and increase for better considerations from the government. It has been said that the Minister for Small Business Dr Craig Emerson is quite proactive and this could lead to rethinking of certain government policies, e.g., a submission has called for the lowering of the tax rate for this sector. 

9. Bartering for Goods and Services

I was a little unsure whether to include this, however talking and listening to other small business owners the last few months there seems to be a growing interest in this area for two reasons. One is cost saving to the business and the other is to overcome a short term need that requires the skills the business owner does not have. As next year will see the need to be more creative for business growth, bartering may be one area investigated and trialed by small businesses. 

10. Continued Confidence

Small business owners in Australia as in most countries have always been quite a confident bunch of people and this trend is set to continue. In a recent small business survey, over 40% still expected their revenue to increase and an additional 28% expected revenue to remain the same. 

To put this in perspective nearly 60% of those surveyed expected the economy to perform worse over the next twelve months and many believe there will be a recession. One reason for the confidence is for the past months small businesses in Australia have had the time to start preparing themselves for a downturn in the economy and gain key insights from events that have been occurring overseas.

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Susan OakesAbout the Author: Susan Oakes is a director and cofounder of Marketing for Business Success Pty Ltd., which has developed the M4B Marketing Software.  She blogs at M4B Marketing Blog.


Susan Oakes Susan Oakes is the Founder of Marketing for Business Success Pty Ltd. M4B Marketing, helping small businesses get and stay on the path to marketing success by keeping it simple, customer and results focused.

18 Reactions
  1. Hi Susan,

    I think the stats are pretty interesting for how many Australian small businesses have websites (40%), and your assessment that usage of social media site Twitter is low among Australian businesses.

    There are some very well known Australian Internet entrepreneurs, such as Darren Rowse of fame. So I tend to think of all small businesses in your country as being super advanced on the Web.

    But I guess the profile falls into “early adopters,” “mainstream” and “late adopters” just like here in the United States.

    Perhaps more alike than different?


    — Anita

  2. I’m surprised that 7 out of 10 Aussie businesses are home based. With that amount of people working from home, I would think more would be involved in social networking. Interesting stuff.

  3. Hi Susan – Fantastic article. Interesting to note that 68% of your small businesses felt that revenues would either stay the same or increase! That’s an encouraging mindset – even though they KNOW and expect the economy to slow. That’s what I love about small business – creative, undaunted and persistent.

  4. I think it will be interesting to see the stats after this year has ended.

    Anita, the population are early technology adoptors, but in this area I think social media, seo etc is just starting to get to get attention. I think we are more similar.

    Amanda, a high number of those are women and many with small children. If you think of all the forums in the US, the first one I know of in Aust was only started in December last year.

    Ivana, that was from a survey taken in December, it will be interesting to see the Jan figures. Also you are right about small business and in Australia we tend to have an attitude about difficult times of “she will be right mate”

    Thanks for your comments.


  5. I have to agree with Amanda here. I’m shocked to see that 7 out of 10 businesses are home based. Good for them! Those statistics are amazing. They need to come and network over at Twitter though 🙂

    I like the fact that you included bartering for goods and services. Its important and a lot more people are doing it than you may think so its definitely worth mentioning. I think more small businesses should consider that here in the states.

  6. Interesting Post; particularly the comparison between how many people have access to the internet vs. those who own websites.

    Regarding your home-based business comment, I believe that home-based and internet businesses are steadily increasing nowadays. In the US, the layoffs are propelling the start of home-based businesses designed around a hobby or past experience. I’m personally noticing a lot of inquiries for home-based online product business and infopreneur consulting businesses.

  7. Great post Susan, but I’m a bit surprised (disappointed?) there’s nothing about exports, selling abroad, going global…

  8. Chris, I am sure the word about twitter will spread. If you think about bartering there is no reason it can’t go global.

    Cheryl, Australians are early adoptors with technology, but still getting there with their own business.

    Amadou, you make a good point about exports and they have been increasing over the years.

    However I think with the decline in the Aust dollar against the US dollar and overseas economic problems these will affect the small business export dollar growth. That said online business will probably grow but they are still a small percentage of the export market.

  9. Ooh. Darren Rowse is from Australia? OMG! I’m late in the news.

    Key #1. Retaining your customers is very important. It definitely deserves to be on the number 1 spot.

  10. Susan,

    Are you a participant of the Flying Solo site? I have to check it out. I have an example of an Australian who moved to Sweden and then challenged the Swedish wine monopoly, offering customer to buy wines online and get the products delivered to their homes. You could read about the company in my post, Wine Freedom Weblog (“Martin Lindeskog” Says:).

    I will soon start my podcast interviews again. The founder of Solid Vox is Prodos from Australia! 🙂 I am sitting here in Sweden, he is producing the show in Australia, and most of my guests that I will interview will come from America. It is a connected world, don’t your think?

  11. these are some good points and things that definitely should be concentrated on when advancing small businesses.

  12. Martin,

    I don’t participate now but I do look at the forum to see the issues affecting micro and solo businesses. I do participate in their daily posts on their main website.

    I will look at your post and in Aust there are a number of companies that now offer this type of service. You are right it is a connected world.

    Good luck with your podcast interviews.

  13. Wow, Aussie market is huge for home based business. I should look at getting some Aussie traffic for my blog. Thanks for this detailed post

  14. Susan:

    Thanks for your kind words. I will keep you informed regarding my future podcast interviews.

    Do you know if New Zealand has the same situation for small businesses?

  15. Sorry Martin, I don’t have any information on New Zealand.

  16. Susan,

    No problem. I bet we could find information on the “down under” area as times goes by!

    Cheers! 🙂