Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Oly Peterson.
26 June 2023
Micro, Small and Medium-sized Enterprises Day,
Small Business Matters data report
Tomorrow (June 27) is world Micro, Small and Medium-sized Enterprises Day. Did you know 98% of Australian businesses are a small business? So most of the businesses that you engage with are a small business. It coincides with the new report out today, Small Business Matters. Joining me is the Australian Small Business and Family Enterprise Ombudsman. Bruce Billson, good afternoon.
Oly, it’s fab to be with you and your listeners and isn’t it interesting, an international day is what's its taken to get off the topic of the West Coast Eagles. It gives you an idea how big this is. I mean, I'm a Tigers fan. Talk about pain. My goodness. We used to say we're 17 years into our five year redevelopment plan. But anyway.
But as a Tigers fan, you sympathise with Eagles fans. How long do you think they have to wait to get out of these pain and misery? Another 15 years?
Well, I hope for the Eagles fan it's not because I remember my son, who's now 25, looked at me one day and said, Daddy, can you tell me why we barrack for the Tigers again? But I needed to even convince the offspring that it was a sound call.
But, what is good news all around is tomorrow is international Micro, Small and Medium Enterprise Day and we think it's a great time to shout out to those small and family businesses that really delight you as a customer, that add so much to your community. And as you touched on earlier, 98% of businesses are small business.
A third of all the GDP in Australia is generated through small and family businesses. So that's half a trillion dollars, Oly. It's a big deal. You know, there's 2.6 million small businesses. Two out of every five jobs in the private sector is made possible by small business. And we've got to recognise this is such a vital contributor. That's what tomorrow's all about.
And it's still growing as well, adding 15% in 21-22 to Australia's GDP. So Bruce say they do go from strength to strength. But you know, the outlook as we know in the economy at the moment in Australia isn't as rosy as it was.
There's plenty of headwinds there and changing times sometimes play into some businesses model and sometimes not.
I mean a bit like Geelong playing at Kardinia Park. A narrow footy oval suits some people and it's a bit like that in the economy with small businesses. We saw a significant increase in the number of small businesses last financial year and that was kind of COVID affected. Slightly less in WA, 5% new businesses in 21-22, compared to 7% nationally.
But we also pulled out some numbers. It's not all beer and skittles being a small business owner Oly, and I'm sure your listeners would appreciate that. During that time, that's the last financial year, about 43% of small businesses didn't make a profit. About three-quarters of small business owners actually take home less than the average male total weekly wage, because so often it's the business owner that is last to be paid.
And when margins are being squeezed, and we've talked about that before, that can have a real impact on those business owners. But they keep at it Oly because it's a real driver in their life. Often their own personal identity is interwoven into it. They like the flexibility, they want to be self employed and running their own show, marching to their own beat. And that's great. And we need more of that. And that's why we're honoring those contributions tomorrow.
And on the positive side of things as well, there's been a huge surge in female ownership when it comes to small businesses, Bruce.
Yeah, it's been huge. I mean, it's almost double the rate from 1970. So, just over a third of all businesses now are owned and led by women.
And when we look at that story that sits behind it, it's often because women are great problem solvers Oly, and many businesses arise from a woman solving a problem in their life that they share with their friends who go, hey, that's a great idea. Can I have a piece of that action as well? And then before you know it, the business is up and about.
We did some research around women owned businesses. Many talk about the flexibility it affords them, that they can balance other life objectives, family, livelihoods.
But also that flexibility is also important for more mature aged people. I don't know whether many people realise Oly, more mature age people actually are still employed running their own business than are actually employed by other people.
You talk to mature aged people who still feel they're got plenty of fire in the belly. They sometimes feel, you know, some workplaces are a little ageist, they go, well, hey, I'll get amongst it on my own terms. And that's where self-employment is so attractive to mature age people as well.
And that's important. But for younger people under 30, Bruce, I see a stat in your report, that shows just 8% and we go back to the seventies, it was 17%. So what are we doing to younger people under the age of 30 who don't want to start their own business? Or what else can be done to help them?
Well, something's happening there. We're doing some extra work to try and work out what that looks like. Our early thesis, it's only a thesis Oly and your listeners might pick up what I'm putting down here, that when the economy is strong a lot of young people look at pretty attractive employment opportunities rather than embark on their own venture because no matter which way you cut it, owning and running your own business is a big responsibility and not everyone's cut out for that.
And when there's big opportunities elsewhere in the economy, maybe you might put that idea of running your own business or being an entrepreneur on the back burner.
But what we also hear about is people, you know, putting a toe in the water as a bit of a side hustle, seeing how it goes, seeing whether it takes flight. That's the sort of thing we want to encourage.
And my aim in my work is to try and make the environment within which enterprising men and women think about their future as attractive as it can be. You mentioned at the outset there's been a few headwinds of late. Maybe that makes it a little less attractive. What can we do to put the wind in the sails of enterprising men and women and not just in their face and that's where we do a bit more work out of this excellent research.
Well, Happy world, Micro, Small and Medium-sized Enterprises Day tomorrow and go and thank those small businesses that we all communicate with Bruce. I think that's what we should be doing. Give them a little pat on the back.
Indeed Oly, and the best way of doing that, put some of your hard-earned into those businesses. Let them know you value what they do, and that adds to the economic and community vitality. It's a great time to acknowledge that contribution. It's really worthwhile.
Good on you, Bruce. Good to catch up. We'll chat again soon.
Take care and best wishes to you and your listeners and can I say go the Tiges, or is it too soon?
Bruce Billson, the Australian Small Business and Family Enterprise Ombudsman.