Square’s State of Regional Business Report shows regional Australia is undergoing a revival. The report shows regional businesses have processed 259 per cent more in sales through Square since the onset of the pandemic. Comparatively, companies in metro areas have processed 178 per cent more in sales through Square.
The report focuses on the impact of the COVID-19 pandemic and the recovery of small businesses across Australia.
Key findings include:
- Regional businesses growing faster than metropolitan: Regional businesses have outpaced their metropolitan counterparts in terms of payment processing growth since the pandemic’s beginning.
- Regional Queensland leads on growth: Regional Queensland has the fastest growing regional hubs on the Square platform, with Goondiwindi, on the QLD-NSW border, leading the charge in the state.
- Digital divide in rural areas: Just over a quarter of all businesses have an online store. Businesses in regional Australia are signing up to Square Online faster than those in metro areas.
- Small business confidence is high, but typical challenges persist: Seven in ten small business owners are confident about their prospects but are concerned about access to capital and having the tools and skills needed to run their business.
State of regional business
Aggregated data from millions of transactions across Square’s Australian seller’s platform forms the base of Square’s State of Regional Business Report. The data reported since the onset of the pandemic is compared against data from the same period before March 2020. The report also included a survey of hundreds of small business owners.
The survey of more than 300 businesses provides valuable insights into business performance across the country. However, the focus is on regional businesses, observing their outlook on the future and their top of mind challenges.
The report observed significant growth in regional small businesses and revealed the driving factors of this trend. Also in the spotlight are the challenges small businesses face as the sector begins to recover from the pandemic.
Record relocation drives growth
Business is booming in Australia’s regions. Record migration from metropolitan areas and freedom from prolonged and harsh lockdowns have driven regional Australia’s revival.
As capital cities suffered through lockdown and restrictions, regional Australia carried the country’s economy. Innovation and growth of regional small businesses have never been so crucial to Australia’s economy.
ABS data shows migration to regional Australia is the highest since records began 20 years ago. As more people migrate away from expensive cities and to regional towns, small businesses in these areas have experienced notable growth compared to city-based companies.
Not only has this mass migration enabled regional businesses to grow, but it has also provided opportunities for aspiring entrepreneurs to start their own businesses. The ABS reported a 15.8 per cent jump in registrations for small businesses in the last financial year.
Nearly 70 per cent of survey respondents said freedom to work on their own terms was the biggest driver of establishing a new business, followed by wanting to be their own boss (55 per cent) and passion for their field of work (39 per cent).
Head of Business Development at Square Australia, Colin Birney, said, “The last two years have shown the entrepreneurial and adaptive best of Aussie businesses.
“Our regions have been particularly savvy and turned to technology to help them adapt and enable continued growth. We’ve seen huge numbers of Australian sellers use Square Online to build an omnichannel business and tap into a Square Loan to invest in their business.”
The report revealed that hopes are high amongst Australia’s small business community; the survey shows 70 per cent of businesses are confident about growth prospects over the next 12 months.
Despite the optimism, small businesses are still facing challenges in recovery from the pandemic. Square reported the following as being the most significant:
- 42 per cent were concerned about access to the best tools and skills
- 34 per cent were worried about saving for day to day operations
- 20 per cent were concerned about access to working capital
Resilience of small business
The pandemic has tested the resilience of small businesses across Australia like never before. In this time of crisis, Australia’s small business community has shown just how adaptive and resilient it can be. Square’s report shows this is particularly true for those businesses in regional Australia.
Claire Hewson, co-founder of Flamin Galah, a brewery based in Huskisson, near Jervis Bay in regional NSW, knows how hard it is to start a small business during a pandemic. The craft brewery opened its doors in March 2020 on the cusp of the pandemic.
Claire said, “The last couple of years have definitely been challenging for us. We were uniquely impacted across two separate locations and at two separate periods of our business.”
“To help us through and keep things fresh, we started offering new products to the local community as takeaway options. We’d still sell growlers of our beer, but we’re now also selling cocktail kits and working with some of our good friends who run a food truck, The Nest, and invited them on site to help them sell their products too.”
In a show of resilience and adaptability, not only have sales through Square grown faster in regional Australia, so have the number of businesses signing up to use digital payments.
More businesses began taking payments with Square since the onset of the pandemic until now, compared to the same time period before March 2020. The pace of adoption grew more quickly in regional areas than in metro areas.
Claire and her husband Sam credit the loyalty of the local community for coming together to help businesses stay afloat during the last two years. Now, they’re looking to repay that loyalty.
Claire said, “We aren’t looking to take over the world just yet, and will stay local for the time being and give our locals and regulars the first taste of our new products or ideas. We’ve had tonnes of requests from other parts of Australia to start an eCommerce store, so we’ll be looking into how Square Online can help us grow a second revenue stream.”