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Small Businesses

who’s got your back?

Every year, American Express commissions research exploring small business sentiment in Australia. In this year’s report– “The Economy of Shopping Small: Back Your Backyard” – we explore who truly has got the back of small business, the challenges owners face and how we can all do more to ensure they thrive.

The research* was commissioned by American Express and undertaken by RFi Group, surveying over 1,000 consumers and more than 850 small business owners from across Australia, making it the biggest Shop Small survey conducted in its six year history.

*Research was conducted over August - September 2018

Pattern Pattern

Every year, American Express commissions research exploring small business sentiment in Australia. In this year’s report– “The Economy of Shopping Small: Back Your Backyard” – we explore who truly has got the back of small business, the challenges owners face and how we can all do more to ensure they thrive.

The research* was commissioned by American Express and undertaken by RFi Group, surveying over 1,000 consumers and more than 850 small business owners from across Australia, making it the biggest Shop Small survey conducted in its six year history.

*Research was conducted over August - September 2018

Aussies want to
back their backyard

Consumers care about small businesses, but worry they aren’t doing enough.  

86% of consumers classify themselves as someone who tries to support small businesses, but admit they could be doing more. 

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0%

admit they could do
more to support small
businesses

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Aussies want to
back their backyard

A growing number of consumers (65%) say they feel a responsibility to support small businesses (up from 61% in 2017). 65% of people also say they prefer to buy from small businesses rather than larger ones, an increase from 53% in 2017.  

Worryingly however, 59% don’t think their shopping habits have an impact on the success or failure of small businesses. Yet, when one does close down in their community, consumers worry about the loss of employment opportunities and range of shopping choice.

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59%
of consumers don’t think their shopping habits have an impact on the success or failure of small businesses
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Small business
sentiment

Small business sentiment is a mixed bag. 38% of owners rate their business success as “extremely good,” with 59% claiming to be “extremely satisfied” with life as a small business owner.

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0%
are extremely satisfied with life as a small business owner
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Small business
sentiment

Yet, for the majority of small business owners (62%) revenue growth was either flat or had declined in the past financial year.

Also of concern is the 33% who believe they are at risk of becoming insolvent in the next three-five years – this rises to 50% amongst businesses that have been operating for less than two years. 

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0%

claimed that revenue growth was
flat or had declined in the past year

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Small business
sentiment

When asked about their biggest concerns, small business owners name increasing energy prices (45%), followed by the economic climate in Australia (43%) and increasing costs and overheads (43%) – these were the same key concerns in 2017.

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infographic
infographic
0%

concerned about increasing energy prices

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graph
graph
0%

concerned about the economic Climate in australia

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0%

concerned about increasing costs and overheads

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Small business champions

Who do small business owners turn to for support and who are their biggest champions?

Ranking stakeholders who demonstrate “excellent support,” the results reveal that consumers and family top the list.

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4a
4a
4a
4a
4a
baseline
0% 0% 0% 0% 0%
consumers family
members
large business
customers
small business
customers
friends
people
people
panel
0%
Consumers
0%
Family
Members
people
panel
0%
Large Business Customers
people
people
panel
0%
Small Business
Customers
0%
Friends

Stakeholders who demonstrate
“excellent support”

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Are consumers really walking the talk?

While shoppers express a strong desire to support small businesses – and owners acknowledge their support – there is sometimes a disconnect between intent and action. 70% of consumers shop at small businesses at least once a week, a statistic that has fallen by 12% since 2016.

Word of mouth recommendation is a huge driver of footfall for small businesses, with 72% of consumers saying they are more likely to buy from a small business if it has been recommended to them. However, two in five consumers cannot ever recall recommending a small business when they’ve had a positive experience.

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82% 2016
75% 2017
70% 2018
baseline
82% 2016
75% 2017
70% 2018
baseline

Consumers spending in small businesses at least once a week

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Keeping it in the family

Family play the role of “hidden backers” for many small business owners.

Three in five small businesses have a family member working with them in some capacity. One in 10 say family members step in during busy periods or staff shortages, working, on average, 29 days per year. 

One in four instances of casual work is unpaid, demonstrating how many family members go above and beyond to support the business success of loved ones.

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3 IN 5
Small businesses have a family member working with them
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Backing from the frontbench

Just 8% of businesses say they have accessed resources, grant support or training from government over the last 12 months.  This proportion was higher among businesses that import/export, but still only represents 14%.

Pointing to this low result is the fact that there remains a lack of awareness amongst small businesses about the assistance available to them – only 15% rate themselves as “very knowledgeable” in regards to federal government support.

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8%
have accessed any form of government support over the last 12 months
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Who’s backing small business?

Businesses feel the greatest action government can take to help the sector grow is:

  1. Reduce taxes
  2. Remove red tape
  3. Reduce compliance burden
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base 1 2 3 shop
base 1 2 3 shop
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Do what you love. Love what you do.

Despite the challenges facing the sector, small business owners’ love for what they do is undeniable.

59% rate themselves as highly satisfied with life as a small business owner – a 10% increase year-on-year– and almost two thirds (63%) would pursue the same career path if they had their time again.

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59%
infographic

are highly satisfied WITH LIFE as a
small business owner

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Do what you love.
Love what you do.

Indeed, Aussie’s entrepreneurial spirit is alive and well. Of those who have a secondary income, 63% operate or work in a small business. Over two thirds (67%) would like this to become their primary source of income in the future and 63% believe there’s the likelihood it will become reality.

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0% who run a small business on the side would like it to be their primary source of income
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