The Importance of Small Business

What is a Small Business? An enterprise is categorised as a small business if: An enterprise is categorised as a small business if: It is independently owned and operated It is independently owned and operated It is controlled by owners or managers who contribute most (if not all) the operating capital. It is controlled by owners or managers who contribute most (if not all) the operating capital. The owner / manager is the main decision maker (risk taker). The owner / manager is the main decision maker (risk taker).

ABS says small business is… A Non manufacturing business with less than 20 employees. A Non manufacturing business with less than 20 employees. A manufacturing business employing less than 100 people A manufacturing business employing less than 100 people

(medium sized biz employ staff. Large biz employ 200 or more staff.) (medium sized biz employ staff. Large biz employ 200 or more staff.) Sometimes small and medium size biz are grouped together as SME’s (small / medium enterprises) Sometimes small and medium size biz are grouped together as SME’s (small / medium enterprises)

Small business contributes to the Australian economy Aust has over 1 million small, privately owned biz employing 3 million workers. Aust has over 1 million small, privately owned biz employing 3 million workers. Non-agricultural small businesses account for 1/3 of Aust economy and 40% total N. Non-agricultural small businesses account for 1/3 of Aust economy and 40% total N.

Creating jobs Creating jobs Help improve GDP and living standards Help improve GDP and living standards Increase exports (although <5% of small biz export G&S) Increase exports (although <5% of small biz export G&S)

Contribute to growth of regions and communities. Contribute to growth of regions and communities. Innovation: 10% of investment in R&D Innovation: 10% of investment in R&D Skills: improves skills of workforce. Skills: improves skills of workforce. Strengthens family ties: 2/3 small biz are family owned. Strengthens family ties: 2/3 small biz are family owned.

Will Small Business continue to be important? New technology and internet enables small biz to obtain information, access global markets and achieve a high quality output at a relatively cheap price in a way that they could not before. New technology and internet enables small biz to obtain information, access global markets and achieve a high quality output at a relatively cheap price in a way that they could not before. This makes small biz more competitive. Larger businesses do not always have an advantage due to size anymore. However, survival is still difficult for small biz. Many do not survive their first year. This makes small biz more competitive. Larger businesses do not always have an advantage due to size anymore. However, survival is still difficult for small biz. Many do not survive their first year.