Small Businesses Will Be Crucial For Australia’s Future: Here’s Why
PICKING UP a flat white at a cafe. Stopping for a bouquet of flowers at a local florist. Ordering a pizza for the family. These are the type of interactions we have each and every day with small businesses without even realizing the significance.
It can be easy to think of these transactions lightly. But small businesses are an incredibly individual and collectively powerful part of our economy – and they continue to face mind-blowing setbacks.
There are more than 2.1 million businesses in Australia that account for 20% of national GDP.
As of July 1, the Australian Government will increase the small business turnover threshold from $2 million to $10 million, meaning even more businesses will identify with being a small business.
Small business is not just the backbone of the economy; small business runs the world. There is no segment of the economy that is better equipped to rapidly influence Australia’s future – on its ability to champion change, mobilize new technology, compete globally and create homegrown opportunities.
And we need to do so much more to support that future.
Small business mobilizes technology to compete globally
As a geographically dispersed market of millions, Australia’s small business community has captured the attention of the technology world. Where once there were traditional pain points, now developers – both local and overseas – invest in new solutions.
As such, we can upend traditional access to capital, unlock time tracking, simplify inventory solutions and more. Any new small business in our country can choose from hundreds of solutions that connect and share data to one single source.
And any business owner can now use a global cloud-based platform to run her business from her living room, across the country to customers around the world. Of the thousands registered bookkeepers and accountants who use Xero in Australia, for example, one-fifth have offshore clients. Small business can now truly look and act like a big business through technology.
These small business solutions are helping Australia to be more nimble, efficient, connected and globally competitive.
Small business unlocks new opportunities
Here’s another thing: small businesses are hiring. They employ over 45% of the Australian workforce – against surprising challenges.
Data from Xero showed that 65 percent of small businesses had invoices overdue by more than 30 days in the six months to March – with more than 3.8 million invoices overdue across the Xero small business economy. Just think how crippling that is to a business. The agitated stance of ASBFEO expresses just how endemic the cash flow issue has become.
Small business shapes the national conversation
Change is happening, slowly. Politicians are now discussing the merits of decentralizing banking and financial data to give people greater control; and the Federal Government pledged $300 million to cut the red tape holding small businesses back, citing technology as a means to streamline compliance.
But it won’t happen fast enough until we appreciate the importance of small businesses in Australia’s future. The federal scheme has now been stalled at state level. It’s not being understood that we need to protect the fluidity with which smaller ventures, less entangled by red tape, can pivot to accurate real-time data. (The average business owner currently still spends 11 hours a week complying with government rules and regulations, according to recent estimates.)
We need a consistent framework across Australia that’s embraced by state governments nationally. We need affirmative action to ensure our small businesses remain relevant and competitive in years to come.