Launching your business

What are the latest trends of small businesses in Australia? Where are they leading us? What industries appear to be thriving?

Over these next few months, I aim to answer all these questions as we dive into the most notable business trends in Australia over the last few years.

In 2018, Australia had a total of 2.31 million businesses which was a grand increase of 75,000 business from the previous year. Notably, most of these businesses, 89.2%, employ only four (4) people or less, with one (1) active trading business for every 11 Australians.

If you’re a business that turns over more than $2 million, you represent 6.9% of businesses in Australia. A turnover of more than $5 million represents a smaller 2.9% of businesses, and only 1.5% of business achieve a turnover of $10 million or more (refer to the table below).

Businesses by annual turnover size range

Source: ABS counts of Australian Businesses, Feb 2019

It is evident that there is a vast array of businesses with their own goals in terms of revenue etc., but what all business owners have in common is the hard work and dedication taken to reach these goals. Remember, it’s not necessarily the size of your turnover that counts, it’s what you’re looking to achieve via your business that dictates the amount of success that you’re going to have moving forward.

It is certainly a tough gig starting your own business, and it is often difficult due to the following reasons:

All data sourced from McCrindle's research ABS counts of Australian Businesses, Feb 2019

• The hardship one must endure - Statistics show that the average new business only survives 4 years and 5 months. New business owners either run out of money or realise it was a lot harder than they thought.

• The false hope of flexibility - Many people wish to start a new business to achieve flexibility with their lifestyles, but having small business often means you’re always on call. When a client comes in and wants to start their own business for lifestyle reasons, I always joke that, yes, they certainly get a lot of flexibility…. to decide which 60 hours per week they get to work.

• Team building challenges - This is often one of the greatest challenges of a business owner. That is, finding the right team and moulding that team into a well-functioning business machine. The soft skills often required to do this take several years to develop and can often hamper business owners over the medium term.

• Simply giving up... - When the going gets tough, it is not uncommon for people to simply give up. It takes a lot of time and patience to develop a successful business and many often underestimate this.

The reality is, building a successful business is tough and you may experience a lot of hardship and heartache along the way. The good news is that, as you endure these difficult times and adhere to a few essential tips, you may build business that you envisage when you started on the journey.

Over the past 28 years, I’ve sat on the Boards of businesses and have run small businesses in Australia. I’ve endured both the highs and the lows mentioned above, and my pieces of advice for our clients and younger people starting businesses are:

• Never give up and develop a support network of professionals that may guide and mentor you through your journey.

• Control your stress levels by having interests outside of the 40-hour grind that you can focus on.

• Build your leadership skills as it is a strong sense of leadership that makes you successful.

• Always appreciate those that help you on the journey and give them your respect for playing part in the process.

As we start to think about the 2022 calendar year, I would remind all our clients that there are many opportunities on the horizon, as there has never been more so a window of opportunity than now to grow your business.

By staying focused and holding a long-term perspective in relation to building a business consistent with your own personal goals, although there will be difficult years, you will have a sense of achievement with the business you build.

Check out our Business Start-Up webinar for what you’ll need to consider before kickstarting your business