Understand your small business customer

Australia is an entrepreneurial nation, with small businesses dominating the economy, and a third of all businesses facing financial and operational challenges.

Owning a business is an entrepreneurial dream for more than 2 million Australians who face challenges paying bills and have endured significant legislative changes and industry longevity to succeed.

According to the Small Business Counts White Paper released by the Australian Small Business and Family Enterprise Ombudsman in 2019, of all new businesses that commenced 4 years ago, almost half (46%) are no longer operating.

Know how the pandemic is impacting business

In fact, 35% of Australian businesses expect to find it difficult or very difficult to meet financial commitments over the next three months as opposed to 18% of large businesses.

The Business Impacts of COVID-19 Survey released on 27 August 2020 by the Australian Bureau of Statistics states that decisions related to expenditure on capital were significantly influenced by uncertainty resulting in 59% regarding the future state of the economy.

Analyse your demographics

Small businesses account for nearly 98% of all Australian businesses and 88% of all Australian businesses employ 4 people or less.

Employees	Company Count	%
0-19 (small)	2,259,098	97.7%
20-199 (medium)	50,338	2.1%
200+ (large)	3,855
Total	2,313,291	100%

Source: Small Business Counts, Small business in the Australian Economy July 2019 (excludes nano businesses with no GST role)

 

Small businesses (0-19 staff) in Australia, broken down by the number of employees.

Type	Employees	Percentage
Sole traders with no employees	0	63%
Micro business (1-4) employees)	1-4	28%
Small business (5-19)	5-19	9%

Source: Small Business Counts, Small business in the Australian Economy July 2019 (excludes nano businesses with no GST role)

 

More than 50% of Australian businesses have a turnover of less than $200,000 and only 2.95% of businesses have a turnover of more than $5M

Turnover	No. of businesses	%
$0 to less than $50K	572,826	24.76%
$50k to less than $200k	792,373	34.25%
$200k to less than $2M	787,685	34.05%
$2M to less than $5M	92,126	3.98%
$5M to less than $10M	32,483	1.40%
$10M or more	35,798	1.56%
Total	2,313,291	100.00%

Source: Small Business Counts, Small business in the Australian Economy July 2019 (excludes nano businesses with no GST role)

Address the needs of your demographics

Consider how your business can holistically support your target market. By understanding the whole ecosystem your clients work within including their strategy and business operations will ultimately give your business a competitive edge.

• Payment terms

Late client invoice payments can impact on small businesses’ long-term sustainability. Just over half of small businesses receive late invoice payments.

If you can ensure on-time payment of your invoices, you are more likely to secure the sale.

Cash flow is a key concern for small businesses. Late payments are responsible for 43% of negatively impacting cash flow. 92% of businesses believe they would generate more revenue in the previous year if they didn’t invest significant time and resources realising bad debt.

• Red tape

Two out of five business owners say red tape and compliance costs directly impacts business performance. This represents 41% of all businesses. How can your business support your target market to reduce this impact and ensure your ongoing business relationship is effective and of mutual benefit?

• Staff

Coraggio recognises the plethora of challenges associated with staffing. This requires extensive knowledge and resource management. To that end, Coraggio regularly hosts HR experts during our Thought Leadership Lunchtime sessions to share the latest industry trends and shifts in the workplace.

For more information

If you are interested to explore leveraging Coraggio’s support systems and information to manage resourcing, contact our Advisory Team on 1300 899 006.