There are barriers restricting small business owners from growing their businesses and acting on their plans, and these barriers are estimated to cost the Australian economy $93.8 billion per year – a figure dubbed the Dormant Dollar.
39 per cent of Australian small business owners have ideas, plans and visions they believe would grow their business but are yet to implement them.
This insight comes from this year’s Economy of Shopping Small report, commissioned by American Express.
The main factors halting growth were identified as:
- Increased costs and overheads
- Cashflow restraints
- The current state of the Australian economy
Lisa Belcher, Vice President of Small Merchants for American Express, said: “This year’s research demonstrates not only the impact small businesses have on our communities and the Australian economy, but the even greater role they could play if provided with the right support and backing. It’s a reminder to all of us to back the small business community, and help owner and operators unlock growth opportunities by ‘shopping small’ in November and all year round.”
Lisa is referring to November as Shop Small month, a national movement founded by American Express, to highlight the importance of small businesses in our communities and encourage more Australians to back them.
Small businesses are also experiencing broader economic pressure with the report revealing Australia’s economic climate is the biggest concern for 50 per cent of small business owners, up from 43 per cent in 2018. Keeping up with technological change is the fastest growing concern, up from 27 per cent in 2018 to 41 per cent this year, while attracting new customers is now also up slightly to 44 per cent from 40 per cent.
Australian Small Business and Family Enterprise Ombudsman, Kate Carnell added: “Small businesses make a significant contribution to our economy and people’s lives, with 12.7 million Australians involved with a small business in some way.
It is concerning that small business operators feel there are substantial barriers that hinder their growth plans, ultimately costing the Australian economy billions a year. Equally, one third of small business owners fear insolvency in the next three to five years. This clearly shows that we need to be doing more to make small business operators feel adequately supported to alleviate barriers and concerns,” Ms Carnell said.
Brian Walker, CEO & Founder, Retail Doctor Group commented: “Small business operators are under immense pressure to keep up with rapid industry evolution, but often lack the resources to be able to address these changes. While many small business owners have ideas and ambitions, they aren’t always able to act on them to increase their growth. Shop Small month reminds us that choosing to support small businesses can make a huge difference to our local small business operators both now and into the future.”