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The Importance of Small Business

The Importance of Small Business. What is a Small Business?. An enterprise is categorised as a small business if: It is independently owned and operated It is controlled by owners or managers who contribute most (if not all) the operating capital.

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The Importance of Small Business

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  1. The Importance of Small Business

  2. What is a Small Business? • An enterprise is categorised as a small business if: • It is independently owned and operated • 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).

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

  4. (medium sized biz employ 20-99 staff. Large biz employ 200 or more staff.) • Sometimes small and medium size biz are grouped together as SME’s (small / medium enterprises)

  5. Small business contributes to the Australian economy • 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.

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

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

  8. 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. • 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.

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