What actually is an SME (small to medium-sized business, for those of us who don’t quite know for certain but have been too afraid to ask)? Well, it depends on who you ask.
The ATO – unsurprisingly – bases it on income. You’re a small business if your turnover is below $10m.
The ABS, however, use people employed – as the key metric, as does ASBFEO – the Australian Small Business and Family Enterprise Ombudsman. Under 20 employees, you’re a small business, between 20 and 199 you’re officially medium, while over 200 you’re playing at the big end of town.
How important are Australian SMEs?
In its most recent ‘Small Business Counts’ survey, published in December 2020 (using stats up to June 2019), ASBFEO underlined just how important SMEs in Australia are to the country’s economy – with 99.8% of businesses in Australia being SMEs.
The most recent ABS figures (table, below) to June 2021, underline the importance, even after everything we’ve all been through since 2019.
The ABS and ASBFEO split Australian small businesses down even further – with the below table showing the June 2021 split of SME businesses in Australia.
|1-4 employees (micro business)||711,364||31.3%|
|5-19 employees (small)||220,427||9.7%|
How much money do Australian SMEs contribute to the economy?
An awful lot, it turns out. In 2018-19 (the most recent figures available) Australian SMEs accounted for more than 50% of the country’s GDP.
|Type of business||$m|
|Small business||417,946 (32%)|
|Medium business||287,441 (22%)|
|Large business||583,893 (46%)|
Which industries do Australian SMEs operate in?
Of course, Australian SMEs operate in a wide variety of industries, as shown in the table below. Predictably, percentages of SMEs are smaller in ‘big’ industries, such as telecommunications, mining, education, and utilities.
|Industry sector||Small ($m)||Medium ($m)||Total ($m)||SME share %|
|Agriculture, forestry and fishing||23,964||5,555||31,425||93.93|
|Rental, hiring and real estate services||61,733||9,354||83,072||85.57|
|Professional, scientific and technical services||56,798||36,037||135,745||68.39|
|Health care and social assistance (private)||36,261||19,568||97,275||57.39|
|Accommodation and food services||15,023||17,056||43,275||74.13|
|Transport, postal and warehousing||19,503||13,801||79,782||41.74|
|Arts and recreation services||3,400||4,486||14,901||52.92|
|Administrative and support services||13,383||20,149||67,285||49.84|
|Public administration and safety (private)||1,217||2,021||6,477||49.99|
|Education and training (private)||5,533||9,825||30,756||49.93|
|Electricity, gas, water and waste services||5,295||6,597||51,414||23.13|
|Information Media and Telecommunications||3,791||5,483||36,819||25.19|
|Total selected industries||417,946||287,441||1,289,278||54.71|
What is the survival rate for Australian SMEs?
Stats from the ABS show that of the non-employing businesses in operation in 2017, 59.2% were still in operation in 2021.
72.7% of businesses with 1-19 employees were still going, while 83.8% of medium sized businesses (20-199 employees) had survived that four-year period. Big business, out of interest, had an 87.7% survival rate.
Support for Australian SMEs
If you’re an Australian SME, Bizcap is committed to helping you access the funding you need, regardless of your credit history. Call us today on 1300 922 223, or apply online to find out whether Australia’s most open-minded lender can help your business succeed.