The past few years have seen Australians face all kinds of challenges. From devastating natural disasters to pandemic disruption, uncertainty has seemingly become the new norm. These events have tested our limits – in particular, small business owners’. But has the turbulence defeated our entrepreneurial spirit? Absolutely not, writes Joseph Lyons, Managing Director, Xero AU & Asia.
Our nation’s entrepreneurs (both existing and emerging) have learned to adapt to the unsteadiness of today’s world. Xero’s new report, Where opportunity lies: Australia’s new small business boom, reveals a surge in small business creation since the pandemic’s arrival – and this trajectory shows no signs of slowing down.
Over the next decade, our research predicts there will be 3.5 million new small business registrations. This could be as high as 4.2 million firms if growth continues to surge.
However, for these aspiring entrepreneurs to realise their dreams, we need to uncover where opportunities exist for them to build innovative and lasting companies, now and in the future.
The answer lies in understanding how the pandemic, as well as events like the upcoming federal election, have (and continue to) reshape what it takes to become a small business owner in this country, and who will lead the way forward.
A changing perspective behind the small business surge
In the face of global crises, a small business boom – like the one we’ve experienced over the past two years here in Australia – is a unique phenomenon. Between 2019 and 2020, small business registrations increased 34 per cent in Australia from 225,000 in 2019 to over 300,000 in 2021. But what’s behind this surge?
We’re living through a great deal of environmental, political and economic turbulence, and increasingly, it’s forced us to rethink what’s most important in life. The result? Droves of Australians are ditching the nine-to-five grind to strike out on their own.
Armed with transferable skills and accessible tech, these new small business owners have tapped into a fresh wave of demand generated by pandemic pressures and circumstances. Although this forced some industries to hibernate, others like social assistance and healthcare – which increased 51 per cent in terms of new small business registrations between 2019 and 2021 – skyrocketed.
For people like Allison Nikula, it’s helped catapult their entrepreneurial journey.
Allison is a former occupational therapist turned founder of CareApp, an engagement platform that helps aged care providers communicate more effectively. Demand for her idea heightened during recent years, when sharing photos or videos of loved ones in care was the only point of connection for some families.
“By providing support during a difficult time, we hoped the industry would see value in our offering. The response was phenomenal,” Allison says.
She’s one of the many entrepreneurs who, since the pandemic’s arrival, have created impactful, purpose-led businesses, while making a meaningful difference in our nation’s pandemic recovery.
The new profile of Australian entrepreneurs
Over the next decade, small businesses like CareApp will collectively contribute over a million jobs and more than $60 billion per year to our economy by 2031. With greater incentives to take the plunge, the entrepreneurs behind this boom are more diverse than ever.
The Where opportunity lies report shows the number of small businesses owned by women has increased 40 per cent over the past 20 years, compared to a 14 per cent rise in male-owned small businesses over the same period.
The research also reveals 45 per cent of firms created within the past two years were founded by those younger than 35. As these generations grew up in a digitised era, most (72 per cent) believe technology has an essential or important role in their operations. But it’s not the only ingredient to success.
Remembering the early days of her startup journey, Allison says, “I’d attend the opening of an envelope! I’d go to anything where I thought I could learn something or connect with someone.”
This is something all emerging (and in fact, existing) entrepreneurs can learn from. In practice, it means finding a community that will support you as your business grows, while remembering the vital role an accountant or bookkeeper plays in this trajectory. As well as helping to manage finances, compliance, and digitalisation (among other things), advisors can connect small business owners to industry bodies and groups.
With a higher representation of young people, women, and those from different cultural backgrounds in the mix, these spaces are likely to become more accessible and welcoming than ever before.
The small business boom brings with it countless chances for growth, innovation and connection. Although the future is uncertain, what’s clear is that Australian entrepreneurs are empowered and equipped to unearth where these opportunities exist, and embrace them to the fullest.
Because what’s next for small businesses is a new chapter; and it’s yours for the taking.
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