No matter what the global markets are doing, there is always an opportunity for an aspiring small business owner to make their mark. Australia in particular has always been an attractive proposition for both local and foreign investors, not least due to a historically stable economy that has recorded over two decades of growth with, unlike many other countries, no recession.
The latest Deloitte report confirms this consistency, predicting that $400 billion will be added to the domestic economy over the next two decades, with Chris Richardson of the Deloitte Access Economics division and co-author of the most recent paper stating that a newly diversified spread of sector opportunities will allow Australia to ‘remain the fastest-growing developed Western nation in the world in the coming decade.’
The study makes it clear that there are five major advantages that will continue to encourage investment in Australia – widely understood regulatory and tax regimes; an attractive and temperate climate; geographic proximity to Asia, currently one of the world’s fastest growing markets; the country’s use of English, the universal business language, and the abundance of prime natural resources in the form of land, energy and minerals.
Although mining has historically been responsible for 10-per-cent of Australia’s GDP, the growth wave in this sector is gradually subsiding. The Deloitte report, however, is optimistic that the ‘big five’ sectors of gas, agribusiness, tourism, international education and wealth management will collectively match this downswing and fill the gap.
Given Asia’s booming economic marketplace and the organic effect this is having on Australia’s domestic opportunities, the Deloitte study ‘shows that Australia’s growth options remain excellent,’ according to Richardson.
Yet although the ‘big five’ are all predicted to see around 4-per-cent of growth, there are twenty other sectors that far outstrip this projected increase and a number of them fall quite firmly into the small to medium business arena.
Indeed, SMEs play a significant role in the Australian economy. Over 70 percent of the workforce is employed by an SME; over 90 percent of actively trading businesses are defined as an SME; in 2012, SMEs contributed almost 50 percent to the country’s GDP and, according to the Deloitte report, in 2014 almost 90 percent of ‘businesses engaging in innovative activity’ were SMEs.
The report identified the most significant growth opportunities in sectors resulting from ‘the collision of health costs and ageing.’ Residential aged care came top of the 25 for projected growth rates, followed further down the list by community care and personal services, then the preventative health and wellness sector, then the re-skilling of an aging workforce and, finally, retirement living and leisure.
In fact, nearly 70-per-cent of Australia’s GDP is represented by the services industry, and includes any support sectors that fall into this category. For example: the number of older Australians interested in extending their working lives is expanding, leaving a growth pocket for any service involved in offering re-skilling training. In terms of education, the report also identifies a continuous and rapid growth in tertiary and secondary sectors as birth rates have continued to rise, with parents increasingly turning to private education providers in an effort to provide what they see as the best schooling for their children.
The rapid advances in Information and Communication Technology is considered to have huge potential as a ‘gateway’ for growth sectors in the ‘downstream’ support of the big five, including the transport and construction sectors, clean energy technology, and ICT-enabled wealth management services. Even parcel delivery has been identified as having its own growth pocket, as new buying patterns and an asset-rich aging population, influenced in no small part by the boom in online enterprise, offer the opportunity to benefit from new investment in this basic area of service provision.
It is very clear that, through this recent assessment of the competitive landscape for SMEs and the economic context within which all predictions are made, the small and medium sized business sector, with its broad scope of influence and varied focus, is poised for great opportunities in the coming years.
In a nutshell: The most promising small business sectors:
Health and Ageing
- Community care and personal services: Home based medical and non-medical care, garden maintenance, personal grooming, meal and food delivery, mobility
- Preventative health and wellness: gyms, leisure centres, health food shops, health supplement retailers, fitness franchises, personal training
- Re-skilling/retraining agencies for late career changers
- Retirement living and leisure: Care homes, retirement communities, age-sensitive leisure facilities
- Nurseries and childcare facilities
- SEN provision
- Education franchises
- Educational aids/ literature/toys
- Transport and Construction technology
- Clean energy technology
- Wealth management software and systems
- Postal services
- Parcel delivery franchises
- Freight shipment businesses
Guest Post: Faye Ferris: Faye is responsible for the active day to day management of the Dynamis APAC Pty Ltd offices in Sydney and BusinessesForSale.com,