The Council of Small Business Organisations Australia (COSBOA) and Square have teamed up once again, unveiling the third edition of the Quarterly Small and Micro Business Index.
This report casts a spotlight on the remarkable resilience exhibited by businesses in Australia.
The most recent findings underscore a significant rebound in growth rates among Australian businesses, effectively returning to the levels experienced before the pandemic-induced upheaval. After navigating the turbulent waters of reduced spending caused by the pandemic, businesses have displayed a robust recovery, marked by a strong resurgence in consumer spending. Remarkably, growth rates have shown consistency across businesses of varying sizes, with small and medium-sized businesses (SMBs) displaying accelerated growth compared to micro and mid-market enterprises over the past two years.
Luke Achterstraat, CEO of COSBOA, emphasizes the scale of Square’s platform and its widespread use in physical and online commerce, accurately reflecting the business landscape. He underscores the report’s goal of presenting a comprehensive view of small businesses’ experiences, bridging gaps that macroeconomic data might miss. The intention is to provide context and clarity for small businesses, industries, and decision-makers, facilitating well-informed and evidence-based choices.
While growth rates have regained momentum, the report acknowledges the anticipation of a potential pullback in consumer spending. However, businesses are taking a proactive approach, diversifying revenue streams and embracing software solutions to optimise operations, enhance efficiency, and foster resilience.
Data from the Australian Bureau of Statistics shows that – despite an increase in business exits – there remains a net positive in new businesses being started in the last quarter (March to June saw a net increase of 11,349 new businesses in Australia).
The report delves beyond growth statistics, examining broader macroeconomic factors that influence the small business landscape. Notably, it highlights the dynamics of business entries and exits, as well as job vacancies, shaping the trajectory of small enterprises.
The report underscores the remarkable resilience of new businesses, even in challenging times. Despite an uptick in business exits, Australia has seen a net increase of 11,349 new businesses in the last quarter, reflecting the entrepreneurial spirit that emerges during economic downturns. Marco Lamantia, Executive Director for Square in Australia, notes how businesses are innovating and diversifying to weather the storm. Examples range from barber shops expanding into merchandise sales to delis offering evening dinner services.
On the labor front, the report sheds light on the strain felt by small businesses due to high job vacancy rates. Industries like arts, recreation, accommodation, and food services face significant shortages in staffing, with job vacancy rates well above pre-pandemic levels. While some businesses find the increased cost of employment challenging, others are leveraging technology to streamline operations and alleviate labour-related stress.
This report marks the third in a series aiming to provide a realistic glimpse into the world of Australian small businesses. While COSBOA has historically relied on anecdotal evidence, this report leverages real-time data from Square and various datasets encompassing experiences from a multitude of small businesses. By presenting an on-the-ground perspective, COSBOA intends to offer a valuable counterpoint to macroeconomic data in policy decision-making processes. The collaboration between COSBOA and Square aims to provide a more complete understanding of the challenges and opportunities faced by small businesses in Australia’s ever-changing economic landscape.
Click here to read the full report.
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