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.\u00a0 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.\u00a0 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.\u00a0 The\u00a0year 2009 is certainly going to be challenging but as always exciting for small businesses and the key trends identified are:\u00a0 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.\u00a0 2. \u00a0Connecting 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.\u00a0 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.\u00a0 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.\u00a0 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.\u00a0 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.\u00a0 6. \u00a0Expanding 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.\u00a0 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.\u00a0 However, it is unlikely there will be a fundamental shift away from packaged software in the near future for the majority of small businesses.\u00a0 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.\u00a0 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.\u00a0 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.\u00a0 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. * * * * * About the Author: Susan Oakes is a director and cofounder of Marketing for Business Success Pty Ltd., which has developed the\u00a0M4B Marketing Software.\u00a0 She blogs\u00a0at M4B Marketing Blog.