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It’s time to celebrate micro business

- June 30, 2024 3 MIN READ
micro business

June 27 marks World Micro, Small, and Medium-sized Enterprises (MSME) Day, a global initiative by the United Nations to recognise and appreciate the vital contributions of small and family-run businesses. Bruce Billson, the Australian Small Business and Family Enterprise Ombudsman, is calling on Australians to celebrate these businesses and acknowledge their importance in our economy and society.

“These are great people in plain sight, and we see them everywhere, every day,” says Billson. “We depend heavily on the small and family-run businesses in our lives who work every day to delight customers and energise enterprise.”

The backbone of the economy

Small businesses in Australia make up nearly 98 per cent of all businesses, translating to approximately 2.5 million enterprises. These businesses generate almost $600 billion in economic activity, which accounts for 33 per cent of the nation’s GDP. They also provide jobs for 5.36 million people, representing 42 per cent of private sector employment.

“This contribution is truly worthy of recognition and celebration,” Billson states. However, he points out a concerning trend small business is on the decline.

“In 2006, the sector contributed 40 per cent of GDP and employed 53 per cent of private sector jobs. This worrying trajectory shows we need to do more to energise enterprise.”

A call for better support and recognition

To encourage enterprise, the ombudsman is advocating for more substantial support and recognition of small businesses at the policy-making level. He suggests the creation of the Prime Minister’s Small Business Awards to celebrate excellence and inspire future entrepreneurs. Furthermore, he calls for every government submission to include a small business impact statement to ensure that regulatory changes consider their effects on small businesses first.

“Every well-intentioned change by Parliament or regulators risks adding to the mountain of red tape that gets between the owner and the small business they are trying to run,” he explains. “Regulatory impact assessments should start with and focus on small business implications, not consider this as an afterthought.”

The challenges faced by small businesses

Recent data from the Australian Tax Office reveals that 46 per cent of small businesses did not make a profit in the most recent year of accounts available. Additionally, three-quarters of self-employed business owners earn less than the average total weekly full-time earnings.

“There’s no rivers of gold for these people, just a hard slog,” says Billson. “Surely, we can do more to get the risk and reward balance right, ensuring small business and entrepreneurship is a really attractive option for people, then create a supportive ecosystem to give enterprising people the best chance to be successful.”

The human side of small business

Small business owners are getting older, with the average age now at 50, up from 29 in 1976. In the 1980s, there were twice as many small business owners aged between 30 and 49 as those aged over 50. Today, only 8 per cent of small business owners are under 30, half the rate of the 1970s.

“Why is the next generation not seeing self-employment and their own enterprise as a pathway for the future?” Billson asks.

Despite this trend, the ombudsman highlights a positive development: 35 per cent of small businesses are now owned by women, double the rate from the 1970s. Additionally, one in three small businesses is run by people born overseas, enriching local business communities and diversifying the goods and services available.

Mental health and wellbeing

With mental health and wellbeing becoming more of a concern for small business owners, Billson stresses the importance of recent government support initiatives announced in the budget. He applauds the decision to provide $7.7 million over two years to extend funding for mental health support through the New Access for Small Business Owners program and $3.1 million over two years for the Small Business Debt Hotline.

“We have seen a 20 per cent increase in calls to our helplines over the past year from small businesses struggling to manage their debts,” he explains. “Sometimes it can be as simple as making time to pause, reflect and reconnect. Talking to trusted advisers and networks is a great way to find solutions.”

This post first appeared on Kochie’s Business Builders. You can read it here


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