What is an Australian SME?

Written by: Aleena Aamir

March 8, 2022

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.

Employees Firm Count %
0-19 (small) 2,341,840 97.5
20-199 (medium) 56,046 2.3
200+ (large) 4,368 0.2
Total  2,402,254 100.0

 

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.

 

Category Employees %
Non-employing 1,410,049 62%
1-4 employees (micro business) 711,364 31.3%
5-19 employees (small) 220,427 9.7%
Total 2,271,839 100%

 

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%)
Total 1,289,280

 

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
Construction 71,310 27,386 128,003 77.10
Other services 19,124 10,044 34,420 84.74
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
Retail trade 20,418 17,539 78,927 48.09
Transport, postal and warehousing 19,503 13,801 79,782 41.74
Wholesale trade 16,689 25,275 70,300 59.69
Arts and recreation services 3,400 4,486 14,901 52.92
Manufacturing 24,710 32,140 112,271 50.64
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
Mining 19,794 25,125 187,131 24.00
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.

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