Despite making up over 97% of all Australian businesses, small enterprises are the roaring engine of the national economy, employing nearly half of the private sector and creating seven out of every ten new jobs.
Key Takeaways
- As at June 2023, there were 2,663,958 actively trading businesses in Australia with 97.5% being small businesses (0-19 employees)
- Small businesses account for 97.2% of all employer businesses in Australia as of June 2022
- In 2021-22, there were 1,054,000 small incorporated businesses in Australia
- Small businesses employ 44% of the private sector workforce or 5.1 million people in 2022
- 68% of all employed Australians work for small businesses as of 2023
- Micro businesses employ 3.9 million people representing 35% of workforce in 2022
- Small businesses contribute $420 billion to GDP or 35% in 2022
- Total turnover of small businesses was $1.2 trillion in 2021-22
- Average annual turnover for small businesses is $450,000 in 2022
- 28% of small businesses survival rate beyond 10 years as of 2022
- 60% of small businesses survive first 3 years post-2019 cohort
- Entries of new small businesses 350,000 in 2022-23
- 55% inflation challenges
- Labour shortages impact 62% small businesses in 2023
- Regulatory burden costs $25,000 pa average per small business 2023
Small businesses overwhelmingly form Australia's economic backbone, employing millions and generating significant economic activity.
Challenges and Government Support
155% inflation challenges
Verified2Labour shortages impact 62% small businesses in 2023
Verified3Regulatory burden costs $25,000 pa average per small business 2023
Verified448% cite cash flow as top challenge in 2023 survey
Directional5Cyber threats affected 29% small businesses in 2023
Single source6Skills gaps reported by 57% small businesses 2023
Verified7Government grants accessed by 22% small businesses $5.2 billion total 2022-23
Verified8Instant asset write-off utilised by 52% saving $10 billion 2023
Verified9Energy costs crisis hit 65% small businesses 2023
Directional10Supply chain disruptions affected 41% in 2023
Single source11Mental health issues 39% small business owners 2023 survey
Verified12Compliance costs 12% of revenue for smallest businesses 2022
Verified13JobMaker Hiring Credit supported 150,000 small businesses 2021-22
Verified14R&D tax incentive claimed by 12,000 small businesses $3 billion 2022
Directional1570% small businesses fear recession impact 2023
Single source16Access to finance denied 28% small business loan applications 2023
Verified17Training subsidies reached 40% small businesses via Skills Checkpoint 2023
Verified18Bushfire recovery aid to 15,000 small businesses $500 million 2020-23
Verified19Flood relief grants 25,000 small businesses $1 billion 2022-23
Directional20Export Market Development Grants 3,500 small businesses $150 million 2023
Single source21Digital Boost program trained 100,000 small business owners 2023
Verified22Fair Work compliance issues for 35% small businesses 2023
Verified23Climate change risks identified by 52% small businesses 2023
VerifiedChallenges and Government Support Interpretation
In the face of a relentless gauntlet of inflation, labour shortages, and red tape, Australia's small businesses are staggering forward with remarkable tenacity, a modest safety net of government support, and a quiet but growing dread of the next economic punch to the gut.
Employment Impact
1Small businesses employ 44% of the private sector workforce or 5.1 million people in 2022
Verified268% of all employed Australians work for small businesses as of 2023
Verified3Micro businesses employ 3.9 million people representing 35% of workforce in 2022
Verified4Small businesses created 70% of new jobs in Australia between 2018-2022
Directional5Average employment per small business is 2.1 employees in 2023
Single source6Construction small businesses employ 12% of total small business workforce in 2022
Verified7Health care small businesses employ 450,000 people (8%) in 2022
Verified8Retail small businesses workforce totals 650,000 (11%) in 2022
Verified9Professional services small businesses employ 1.1 million (19%) in 2022
Directional1025% of small business employees are part-time as of 2023 survey
Single source11Female employees in small businesses comprise 47% of workforce in 2022
Verified12Youth employment (15-24) in small businesses is 28% of their workforce 2022
Verified13Regional small businesses employ 2.2 million people (43% of small biz workforce) 2022
Verified14Small businesses in NSW employ 1.8 million (35%) nationally in 2022
Directional15Victorian small businesses workforce is 1.3 million (25%) in 2022
Single source16Queensland small business employment totals 900,000 (17%) in 2022
Verified17Small businesses added 250,000 jobs post-COVID by 2023
Verified18Casual employment in small businesses is 32% of their workforce 2023
Verified19Manufacturing small businesses employ 300,000 (5.5%) in 2022
Directional20Accommodation small businesses workforce 400,000 (7%) in 2022
Single source21Transport small businesses employ 350,000 (6%) in 2022
Verified22Education small businesses workforce 250,000 (4.5%) 2022
Verified23Arts and recreation small businesses employ 150,000 (2.7%) 2022
Verified24Indigenous employment in small businesses is 4% of workforce 2021
Directional25Small business apprenticeships account for 55% of total apprentices 2023
Single source26Wage growth in small businesses averaged 3.5% in 2023
Verified27Turnover per small business employee averages $180,000 annually 2022
Verified28Small businesses with 5-19 employees employ 1.2 million (22% workforce) 2022
VerifiedEmployment Impact Interpretation
While often seen as the plucky underdogs of the economy, Australia's small businesses are, in fact, the country's backbone, quietly employing nearly half the private sector, creating most new jobs, and proving that big things really do come in packages averaging 2.1 employees.
Financial Performance
1Small businesses contribute $420 billion to GDP or 35% in 2022
Verified2Total turnover of small businesses was $1.2 trillion in 2021-22
Verified3Average annual turnover for small businesses is $450,000 in 2022
Verified445% of small businesses reported profit margins over 10% in 2023 survey
Directional5Small business tax revenue to government $80 billion in 2021-22
Single source6Debt levels average $250,000 per small business in 2022
Verified7Cash flow issues affect 42% of small businesses monthly 2023
Verified8Construction small businesses average turnover $1.2 million 2021-22
Verified9Retail small businesses average profit $120,000 annually 2022
Directional1035% of small businesses have annual revenue under $100,000 in 2022
Single source11Investment in small businesses totalled $150 billion in loans 2023
Verified12Profitability rate for small businesses 62% in 2023 survey
Verified13Average small business superannuation contributions $25,000 pa 2022
Verified14Export revenue from small businesses $45 billion in 2022
Directional15Cost of living pressures increased expenses 22% for small businesses 2023
Single source16Digital adoption boosted revenue 15% for 40% of small businesses 2023
Verified17Insurance costs average $15,000 pa for small businesses 2023
Verified18Energy costs rose 28% impacting 55% small businesses profitability 2023
Verified19Small business R&D expenditure $12 billion in 2021-22
Directional20Bankruptcy filings for small businesses 8,500 in 2022-23
Single source21Average small business asset value $500,000 in 2022
Verified2252% small businesses use instant asset write-off averaging $20,000 claim 2023
Verified23Wage costs 32% of total expenses for small businesses 2023
Verified24Marketing spend averages 5% of revenue for small businesses 2022
DirectionalFinancial Performance Interpretation
Small businesses are Australia's economic engine, remarkably humming along at a $1.2 trillion turnover and contributing a third of our GDP, yet they're simultaneously navigating a precarious tightrope where nearly half face monthly cash flow woes while balancing an average debt of a quarter-million dollars and soaring costs.
Prevalence and Demographics
1As at June 2023, there were 2,663,958 actively trading businesses in Australia with 97.5% being small businesses (0-19 employees)
Verified2Small businesses account for 97.2% of all employer businesses in Australia as of June 2022
Verified3In 2021-22, there were 1,054,000 small incorporated businesses in Australia
Verified470% of small businesses in Australia are sole traders
Directional5New South Wales hosts 28% of Australia's small businesses with 746,000 as of 2023
Single source6Victoria has 25% of small businesses totaling 665,000 in June 2023
Verified7Construction sector has 18.6% of small businesses (495,000) in 2023
Verified8Professional, scientific and technical services hold 14.3% of small businesses (381,000) as of 2023
Verified9Rental, hiring and real estate services comprise 11.1% or 296,000 small businesses in 2023
Directional1038% of small businesses are less than 4 years old as of 2022
Single source11Micro businesses (0-4 employees) make up 94.8% of all small businesses in 2023
Verified12Queensland has 306,000 small businesses representing 11.5% nationally in 2023
Verified13Western Australia small businesses number 238,000 or 8.9% in 2023
Verified14South Australia has 126,000 small businesses (4.7%) in 2023
Directional15Tasmania small businesses total 32,000 (1.2%) as of 2023
Single source16Northern Territory has 15,000 small businesses (0.6%) in 2023
Verified17ACT small businesses number 22,000 (0.8%) in 2023
Verified182.5 million non-employing small businesses exist in Australia in 2023
Verified19Female-owned small businesses increased by 12% from 2018 to 2022
Directional20Indigenous-owned small businesses number 90,000 as of 2021
Single source2165% of small businesses are in metropolitan areas in 2022
Verified22Retail trade sector has 210,000 small businesses (7.9%) in 2023
Verified23Administrative services small businesses total 173,000 (6.5%) in 2023
Verified24Health care small businesses number 142,000 (5.3%) in 2023
Directional25Accommodation and food services have 126,000 small businesses (4.7%) in 2023
Single source26Average age of small businesses is 9.5 years as of 2022
Verified2715% of small businesses are family-owned according to 2021 survey
Verified28Online-only small businesses grew to 12% of total in 2023
Verified2928% of small businesses are in professional services in NSW 2023
Directional30Exporting small businesses represent 6% nationally in 2022
Single sourcePrevalence and Demographics Interpretation
Australia's economy is a bustling hive of 2.5 million small businesses, where the heroic solo operator is king, construction is the most popular trade, and the spirit of a fresh start is alive with over a third of them younger than a four-year-old with a business plan.
Survival and Growth
128% of small businesses survival rate beyond 10 years as of 2022
Verified260% of small businesses survive first 3 years post-2019 cohort
Verified3Entries of new small businesses 350,000 in 2022-23
Verified4Exits of small businesses totalled 280,000 in 2022-23
Directional5Growth rate of small businesses 4.2% annually 2018-2022 average
Single source6High-growth small businesses number 15,000 (0.6%) in 2022
Verified722% of small businesses expanded workforce in 2023
Verified8Digital transformation adopted by 65% small businesses boosting growth 12% 2023
Verified9Exporting small businesses grew 8% from 2021-2023
Directional10Franchised small businesses survival 85% after 3 years vs 60% independent 2022
Single source11Regional small business growth 5.1% vs metro 3.8% 2022
Verified12Construction small business growth 6% in entries 2023
Verified13Tech sector small businesses growth 12% employment 2022
Verified14Pandemic resilient small businesses 75% recovered by 2023
Directional15Succession planning in place for 18% small businesses 2023 survey
Single source16Innovation active small businesses 32% filed patents 2022
Verified17E-commerce growth 25% revenue for small retailers 2023
Verified18Female-led small businesses growth 7% faster than male-led 2022
Verified19Green initiatives adopted by 40% small businesses for growth 2023
Directional20M&A activity in small businesses up 15% in 2023
Single source21Survival rate for startups 48% after 5 years 2017 cohort
Verified22Scale-up small businesses 5,000 grew >20% turnover 2022
Verified23Overseas expansion by 4% small businesses in 2023
Verified24Automation investment grew output 18% for 35% small businesses 2023
DirectionalSurvival and Growth Interpretation
The landscape for Australian small businesses is a thrilling yet brutal marathon where nearly a third of starters make it to the ten-year mark, proving that success is less about a flashy start and more about relentless adaptation, digital savvy, and sometimes, the sheer grit to outlast 280,000 annual exits.
Sources & References
- Reference 1ABSabs.gov.auVisit source
- Reference 2ATOato.gov.auVisit source
- Reference 3BUSINESSbusiness.gov.auVisit source
- Reference 4ASBFEOasbfeo.gov.auVisit source
- Reference 5REGIONALAUSTRALIAregionalaustralia.org.auVisit source
- Reference 6COSBOAcosboa.org.auVisit source
- Reference 7AIGROUPaigroup.com.auVisit source
- Reference 8NSWnsw.gov.auVisit source
- Reference 9AUSTRADEaustrade.gov.auVisit source
- Reference 10RBArba.gov.auVisit source
- Reference 11INSURANCECOUNCILinsurancecouncil.com.auVisit source
- Reference 12INDUSTRYindustry.gov.auVisit source
- Reference 13AFSAafsa.gov.auVisit source
- Reference 14FRANCHISEBUSINESSfranchisebusiness.com.auVisit source
- Reference 15IPAUSTRALIAipaustralia.gov.auVisit source
- Reference 16CYBERcyber.gov.auVisit source
- Reference 17BLACKDOGINSTITUTEblackdoginstitute.org.auVisit source
- Reference 18FAIRWORKfairwork.gov.auVisit source
- Reference 19CLIMATECHANGEAUTHORITYclimatechangeauthority.gov.auVisit source