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8167.0 - Selected Characteristics of Australian Business, 2010-11 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 13/09/2012   
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BUSINESS MARKETS AND COMPETITION


GEOGRAPHIC MARKETS IN WHICH BUSINESSES SOLD GOODS OR SERVICES

Businesses were asked to identify in which geographic markets they sold their goods or services during the year ended 30 June 2011. There were four options: local (the immediate area, town or city in which the business is located), outside of local area but within the state/territory, outside of state/territory but within Australia, and overseas. Multiple responses could be provided.

Geographic markets in which businesses sold goods or services, by employment size(a)(b)(c), 2010 - 11

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Local(d)
78.9
83.6
81.0
79.0
80.5
Outside of local area but within the state/territory
37.5
44.2
48.1
61.7
40.5
Outside of state/territory but within Australia
21.6
24.6
34.7
66.1
23.8
Overseas markets
5.7
8.4
13.7
34.6
7.3

(a) Proportions are of all businesses in each output category.
(b) Businesses were asked to identify all geographic markets in which they sold goods or services.
(c) Businesses could report more than one geographic market.
(d) The local market is defined as 'the immediate area, town or city in which this business is located'.


Four out of five businesses sold goods or services in the local area, while two in every five businesses sold goods or services outside of local area but within the state/territory. Overall, 7% of all businesses sold goods or services in overseas markets.

The proportion of businesses that sold goods or services in the local area was greatest among those with 5-19 persons employed (84%). In each of the three remaining geographic markets, the proportion of businesses that sold goods or services in the market increased with each successive employment size range. For example, the proportion of businesses that sold goods or services in overseas markets ranged from 6% of businesses with 0-4 persons employed to 35% of businesses with 200 or more persons employed.

The proportion of businesses that sold goods or services in the local area was highest in the Accommodation and food services industry (95%). Agriculture, forestry and fishing recorded the highest proportion of sales of goods or services outside of local area but within state/territory (58%), while Information media and telecommunications recorded the highest proportion of sales of goods or services outside of state/territory but within Australia (52%). Mining recorded the highest proportion of businesses that sold goods or services overseas (25%).

Diagram: Geographic markets in which businesses sold goods or services

Innovation-active businesses were three times more likely than non innovation-active businesses to sell goods or services overseas (12% compared to 4%), and more than twice as likely to sell goods or services outside of state/territory but within Australia (36% compared to 16%).


MAIN SOURCE OF BUSINESS INCOME

Businesses were asked to identify their main source of income from the sale of goods or services during the year ended 30 June 2011. A list of sources was provided, however, definitions for large businesses or organisations and small and/or medium businesses or organisations were not provided.

Main source of business income, by employment size(a)(b)(c), 2010 - 11

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Australian sources
Government organisations
3.3
6.2
7.8
13.3
4.6
Large businesses or organisations
14.9
17.4
25.4
41.2
16.6
Small and/or medium businesses or organisations
40.4
36.8
28.6
19.2
38.3
General public
46.8
48.4
45.3
32.6
47.1
Overseas sources
1.6
2.0
3.1
4.1
1.9

(a) Proportions are of all businesses in each output category.
(b) Businesses were asked to identify their main source of income from the sales of goods or services and were asked to nominate one source only.
(c) The sum of the component items may not equal 100% due to rounding and/or provision of multiple responses. Refer to Explanatory Notes 29 and 30 and the Quality Declaration.


Just under half of all businesses (47%) reported the Australian general public as their main source of income from the sale of goods or services, followed by small and/or medium businesses or organisations within Australia (38%).

Businesses with 200 or more persons employed were most likely to report that their main source of income from the sale of goods or services was derived from large businesses or organisations within Australia (41%). Businesses within this employment size range also reported the highest proportion receiving their main source of income from overseas sources (4%).

Accommodation and food services had the highest proportion of businesses reporting the Australian general public as their main source of income (90%) from the sale of goods or services. Businesses in Mining were the most likely to have overseas sources as their main source of income (14%).


MAIN SUPPLIER OF GOODS OR SERVICES

Businesses were asked to identify their main supplier of goods or services for the year ended 30 June 2011. A list of suppliers was provided, however, definitions for large businesses or organisations and small and/or medium businesses or organisations were not provided.

Main supplier of goods or services, by employment size(a)(b)(c), 2010 - 11

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Australian suppliers
Government organisations
1.0
1.2
1.3
1.9
1.1
Large businesses or organisations
14.8
22.1
24.0
43.6
17.9
Small and/or medium businesses or organisations
61.8
65.1
60.3
41.5
62.6
Overseas suppliers
4.9
6.1
8.9
12.0
5.6
Not applicable
20.0
11.1
11.5
7.6
16.5

(a) Proportions are of all businesses in each output category.
(b) Businesses were asked to identify their main supplier of goods or services and to nominate one supplier only.
(c) The sum of the component items may not equal 100% due to rounding and/or provision of multiple responses. Refer to Explanatory Notes 29 and 30 and the Quality Declaration.


Australian small and/or medium businesses or organisations were the main suppliers of goods and services for almost two-thirds of all businesses (63%), while Australian government organisations were the least common (1%).

Businesses with 200 or more persons employed were most likely to report large businesses or organisations within Australia as their main supplier of goods or services, while businesses in the three smaller employment size ranges were most likely to report small and/or medium businesses or organisations within Australia. The proportion of businesses with overseas suppliers as their main supplier of goods or services increased with each successive employment size range.

Businesses in Wholesale trade (36%) had the highest proportion of overseas suppliers, followed by Manufacturing (12%). All remaining industries recorded proportions of 10% or less, including Mining (9%).

Innovation-active businesses were three times as likely to use overseas suppliers (9%), than non innovation-active businesses (3%).


RELIANCE ON CLIENTS, CUSTOMERS AND BUYERS

Businesses were asked whether they relied on a small number of clients, customers or buyers to generate a significant proportion of their income. There was no accompanying definition of what constitutes a small number of clients, customers or buyers or what constitutes a significant proportion of their income. Businesses that did report a reliance on a small number of clients, customers or buyers were also asked to indicate the likely impact on the business if they had lost one of these.

Reliance on clients, customers or buyers, by employment size(a), 2010 - 11

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Businesses that relied on a small number of clients, customers or buyers(a)
54.8
43.1
37.2
35.9
49.7
Potential impact on business income from the loss of one of these clients, customers, or buyers(b)(c)
Little or no impact on the business' income as would have been relatively easy to find replacement client, customer or buyer
38.1
31.5
28.0
14.7
35.6
Moderate to large impact on the business' income as would have been difficult to find replacement client, customer or buyer
48.4
55.5
57.2
^69.0
50.9
Extremely large impact which would have forced the business to close
13.7
13.0
15.2
^16.3
13.6

^ estimate has a relative standard error of 10% to less than 25% and should be used with caution
(a) Proportions are of all businesses in each output category.
(b) Proportions are of businesses that relied on a small number of clients, customers or buyers to generate a significant proportion of their income, in each output category.
(c) The sum of the component items may not equal 100% due to rounding and/or provision of multiple responses. Refer to Explanatory Notes 29 and 30 and the Quality Declaration.


Half of all businesses relied on a small number of clients, customers or buyers to generate a significant proportion of their income. Of the businesses that reported relying on a small number of clients, customers or buyers, 51% indicated there would be a moderate to large impact on business income if one of these clients was lost.

The proportion of businesses reporting a reliance on a small number of clients, customers or buyers decreased with each successive employment size range. A moderate to large impact on business income was the most likely response for all employment size ranges increasing with each successive employment size range from 48% for businesses employing 0-4 persons to 69% for businesses employing 200 or more persons.

The Professional, scientific and technical services (63%) and Administrative and support services (62%) industries recorded the highest proportions of businesses reliant on a small number of clients, customers or buyers, while businesses in Accommodation and food services and Retail trade (both 26%) were the least likely to report reliance on a small number of clients, customers or buyers.

Businesses in Transport, postal and warehousing were most likely to experience an extremely large impact which would have forced the business to close in the event of losing one of these clients (34%). By contrast, 58% of businesses in Health care and social assistance expected little or no impact on business income as the outcome of losing one of these clients.

Innovation-active businesses were also more likely to report a moderate to large impact on business income if one of these customers, clients or buyers were lost (60%) when compared to non innovation-active businesses (44%).


AMOUNT OF COMPETITION EXPERIENCED BY BUSINESSES

All businesses were asked to report the amount of competition they experienced during the year ended 30 June 2011. They were required to select one of four available options; none/captive market/no effective competition, one or two competitors, three or four competitors, or five or more competitors.

Amount of competition experienced by businesses, by employment size(a)(b)(c), 2010 - 11

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Amount of competition experienced by businesses:
none/captive market/no effective competition
18.6
8.7
9.6
10.4
14.8
one or two competitors
10.9
12.7
11.2
7.7
11.4
three or four competitors
10.4
15.0
16.7
14.0
12.3
five or more competitors
60.2
63.7
62.5
68.0
61.5

(a) Proportions are of all businesses in each output category.
(b) Businesses were asked to identify which one of four options best describes the amount of competition experienced during the year.
(c) The sum of the component items may not equal 100% due to rounding and/or provision of multiple responses. Refer to Explanatory Notes 29 and 30 and the Quality Declaration.


Overall, almost two thirds of all businesses (62%) reported five or more competitors, while 15% of businesses reported none/captive market/no effective competition. Businesses with 200 or more persons employed were the most likely to report five or more competitors (68%), while businesses with 0-4 persons employed were the most likely to report none/captive market/no effective competition (19%).

By industry, businesses in Agriculture, forestry and fishing were the most likely to report none/captive market/no effective competition (32%), followed by Mining (25%), while businesses in Retail trade were the least likely to report this amount of competition (5%). Businesses in Financial and insurance services were the most likely to report five or more competitors (76%) followed by Construction (72%). Businesses in Mining were the least likely to report five or more competitors (48%).


SIZE OF COMPETITORS

Businesses with some form of competition were asked to identify the size of their major competitors during the year ended 30 June 2011. They were asked to select one of three options that included smaller in size than this business, about the same size as this business, and larger in size than this business. A definition of what constitutes the size of competitors was not provided.

Size of competitors(a)(b)(c), by employment size, 2010 - 11

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Competitors which were:
smaller in size than this business
6.8
7.9
12.6
19.9
7.7
same size as this business
51.7
54.1
50.6
50.9
52.4
larger in size than this business
46.2
40.6
39.1
33.1
43.7

(a) Proportions are of businesses reporting some amount of competition in each output category.
(b) Businesses were asked to identify the size of their competition and nominate one only.
(c) The sum of the component items within each output category may not equal 100% due to rounding and/or provision of multiple responses. Refer to Explanatory Notes 29 and 30 and the Quality Declaration.


Of those businesses reporting some form of competition, 8% reported that the majority of the competition faced came from businesses which were smaller in size than this business. More than half of businesses reporting some form of competition indicated that their competitors were about the same size as this business (52%).

By industry, Accommodation and food services had the highest proportion of businesses that reported competitors about the same size as this businesses (72%).


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