Recently released statistics may point to an on-going impact of the Global Financial Crisis in Australia. Last month the Australian Bureau of Statistics released data showing the number of business in Australia remains effectively static, with no real growth since 2008. New businesses were established in 2011-12, however the start-up rate was only 0.1% higher than the exit rate. This meant an additional 8,868 businesses were established in the year to June 2012, taking the total number of actively trading businesses in Australia at that time to 2.14 million.
A whopping 96% of those active businesses were small businesses.
Compare these figures to the 299,123 new business entries during 2008–09 contributing to the total of 2.07 million businesses operating in June 2008 and the stagnation becomes clearly evident. Business survival rates showed almost 76% of those businesses operating in June 2008, were still operating two years later, but only 51% were still operating in June 2012. Perhaps unsurprisingly, the exit rates were highest for businesses in the ‘zero to less than $50k’ turnover range and while those businesses in the ‘$2m or more’ turnover range, had the lowest exit rates. It’s obviously really tough for many smaller businesses at the moment and these indicators should worry all policy makers. We are told small business is the engine room of our economy so with stagnant growth there is neither the activity nor jobs to stimulate growth.
To start a business in this environment you need great advice, support and spirit.
I encourage you to check out our StartUp Month resources which are designed to help all new and emerging business avoid the pit-falls that hamper business growth. If you’re interested, the full ABS statistics can be viewed here.