Con Foo, Rodney (2006) The Context for Australian SME Exits. In: Burapha International Conference 2006, June 22-23,2006, Bangkok, Thailand.

Abstract

SMEs play a significant role in the Australian economy as they account for 95% of enterprises and 60-70% of jobs. The nature of SMEs are that there are many start-ups and almost as many failures each year. Whilst there have been significant studies on areas associated with business cessation, there has been very little research focus on business exits that do not include business cessation. Of the 3,015,318 active businesses in operation on June 30, 2004 the vast majority (72.2%) were non-employing businesses i.e. owner only operated or legal entities established for non-trading purposes. The non-agriculture private sector consisted of 90.0% small business (1-19 employees), 9.4% of medium business (20-199 employees), and 0.6% large business (200+ employees). The combination of Business Exits Australia and Experimental Estimates, Entries and Exits of Business Entities provides a foundation for understanding business exits related to harvest. Overlaying the range of outputs from both studies provides a spread from 1.0% to 2.3% with a benchmark harvest rate of 1.3%. Based on a June 30, 2004 population of 762,837 employing non-agricultural private enterprises, this provides a forecast of 9,917 owners who sold their businesses in that financial year and the annual value add of $9.26 billion or an average of $933,356 per business.

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