The Stats on Australian Businesses
Australian businesses are booming at present and for the second year in a row, the numbers of actively trading businesses have increased. The Australian Bureau of Statistics (ABS) confirmed that while the actual numbers showed a drop in terms of new business registrations, fewer businesses closed across the board. Statistics from the ABS showed 21,000 more businesses trading in the 2014-2015 period, a 1% increase from the previous financial year.
This is actually great news for Australian businesses and confirms they are managing to stave off issues such as cash flow or bankruptcy and continuing to trade for the long term. Deciding to close down a business, even one with huge financial issues, is a huge business decision. The reason to close down a business is not always monetary either. Sometimes the decision stems from a poor business plan, bad health, lack of management experience , unforeseen events or lack of capital.
Only one state showed a drop in business numbers during the 2014-2105 period and that was Tasmania, mainly influenced by businesses in the agricultural sector. Nationally, agricultural businesses have fallen a huge 10% from 2011 affecting other states’ overall results. Victoria was the state with the highest recorded number of new businesses during this period. Interestingly enough, ACT had both the highest business entry rate and exit rate out of all the states which means that businesses operating in the ACT were the least likely to survive.
Finance and insurance showed the fastest in growth while construction continues to have the most businesses in operation, Australia-wide. Electricity, gas, water and waste services had the fewest businesses in operation. Businesses focusing on health care and social welfare had the highest rate of all businesses with a massive 75% surviving over a 4-year period. Businesses focusing on Public Administration and Safety had the highest exit rate during this period.
As of June 2015, Australia saw 2,121,235 businesses trading and most of these businesses had an annual turnover of under $200,000 and no employees. National exit rates in turn were highest for small businesses with a turnover of less than $50,000 again making it more important that small businesses do their homework in terms of their business plans, market analysis, competitor analysis and marketing.
If you are a small business and don’t wish to feature as an exit rate percentage in ABS’ next report, then we recommend you contact us. Aside from our bookkeeping services, we also offer templates, tools and procedures to make your business run more efficiently, pricing advice, strategic business advice and more. Small businesses are our specialty, particularly in light of the fact that we are one ourselves. We can also assist with systemisation and procedures audits, KPIs and benchmarks and one-on-one business consultations to make sure your business is heading in the right direction. Don’t wait until it is too late; it is much better to be prepared for issues rather than having to react to such issues as they occur.