News‎ > ‎

1 in 5 Households owns a business.

posted 6 Jul 2016, 21:31 by Gordon Kay   [ updated 6 Jul 2016, 21:32 ]
We found Phil Ruthven of IBISWorld newsletter of particular interest this month as it provides an overview of the Australia Business Sector.  (The full report is attached to the end of this page.)

Here are some key points:-

Numbers & Impact
This year ends with Australia having 2.1 million active trading businesses.
Generating a GDP of almost $1.7 trillion, 
Revenue of $4.8 trillion 
Employing 12.1 million persons. 

More than one in five households own a business.
Nearly all households own shares in businesses directly or via their superannuation.

The Average Business
The average business is around 12 years old, is in a service industry (70.0% of the nation’s GDP), has a revenue of $2.3 million, employs six people, and is currently growing revenue at around 3.0% pa in a slow-growing economy with no inflation.

Startup and Closures
Around 285,000 new businesses started up in 2015. However, some 263,000 businesses closed added a net 22,000 businesses to the total. (Over 90% of business close within 12 months)  
The majority of the businesses that closed had no employees, which is true of some 61% of the total 2.1 million businesses.
Businesses with revenue over $2 million have the best prospects for surviving.

The revenue size of businesses
The number of businesses in various revenue size categories is shown in the chart. Some 312 enterprises with revenues over $1 billion in 2015 accounted for almost 30% of the nation’s revenue. 
Enterprises with over $10 million in revenue account for around half of all revenue with just 0.6% of the number of businesses, meaning that the SME sector generates the other half, but with 99.4% of all enterprises.

The SME's share of the nation’s revenue 50 years ago was around 30% but is now almost equal in importance to the big end of town. The SME sector has pioneered new service industries via household functions outsourcing, business non-core functions and overseas outsourcing to Australia (tourism, educations business services, etc.). Franchising has been a significant contributor to the faster growth of SMEs, not only in new retailing but also in new household and business services.

Where the businesses are
In geographic terms, numbers follow population levels across states and territories, with NSW and Vic each having a slightly higher share of businesses than their population share. When it comes to industries, the number of businesses does not align to the economic or revenue importance of industries due to different average sizes, degrees of capital intensity and automation of businesses in the various industries. 

Further information and stats can be found at the ABS 

Gordon Kay,
6 Jul 2016, 21:31