8165.0 - Counts of Australian Businesses, including Entries and Exits, Jun 2003 to Jun 2006  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 26/02/2007   
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February 26, 2007
Embargoed 11:30am (AEDT)

1.9 million businesses in Australia: ABS

There were 1,963,907 actively trading businesses in Australia in June 2006, up 1.3% from a year earlier, according to figures released today by the Australian Bureau of Statistics (ABS).

Of these, the vast majority are small businesses based on either their employment or turnover:

    • almost 1.9 million businesses (96% of the total) employed less than 20 people (this figure includes 1.1 million businesses who did not employ staff);
    • over 1.8 million businesses (94% of the total) had annual turnover of less then $2 million.
Property and business services had the greatest number of businesses with 25% of the total. The 'Construction' industry had the next highest number of businesses at 16%, followed by 'Retail trade' and 'Agriculture, forestry and fishing' (both 11%).

Business entries and exits
Growth in the number of businesses slowed slightly in each of the three most recent financial years, due to the entry rate for new businesses during 2005-06 (16%) being marginally lower than the entry rates in 2003-04 and 2004-05. The rate of business exits over the three year period was relatively consistent at about 15%.

Business survival
Close to two-thirds (65%) of businesses that were operating in 2003 were still operating three years later. Of the businesses which did not survive, 43% exited during 2003-04, 33% during 2004-05, and the remaining 24% during 2005-06.

Over half (58%) of the new business entries during 2003-04 were still operating in June 2006. Of these new businesses which did not survive, over half (59%) had exited by June 2005.

Over the short to medium term, business survival is very dependent on the age of the business. The longer a business survives, the greater its chances of continuing survival.

Survival rates are also heavily influenced by the effect of non-employing businesses. The bulk of businesses in Australia are non-employing businesses, the majority of new business entries are non-employing businesses and more non-employing businesses fail. For example, of the new entries in 2003-04, 50% of these new non-employing businesses were still operating in June 2006, compared with 80% of new employing businesses.

Further details can be found in Counts of Australian Businesses, including Entries and Exits (cat. no. 8165.0).