Business & Economy
THE LARGE IMPACT OF SMALL BUSINESS
Every year, 4,000 businesses are launched in Canberra. Of these, only 1,000 make it past their first year.
Why is it so difficult to sustain a small business? And how can we support them to be more successful? Dr Michael Schaper, CEO of the Canberra Business Chamber and UC Council member, shares his thoughts.
“Canberra is interesting. We have one of the highest rates of business start-ups in the country, but we also have a very high exit rate,” Michael says.
“The thing about a small business, as opposed to just business per se, is that it’s not just about business. Sure, there are cash flows and marketing and human resources and trade and business planning … but it’s more holistic than if you work in a big corporation because if you’re in small business you have to deal with everything. You’re not a specialist. You’re not an HR professional or a marketing expert, you are a jack of all trades.”
Small businesses are vital for the economy, and Michael uses the analogy of ants and elephants to describe their role. An elephant (a big business) is visible, with obvious movements. An ant (small business) might not seem like much on its own, but in a colony, is extremely important.
“They are all part of an eco-system and there is a mutual co-dependency. For example, big businesses get most of their new ideas by buying, absorbing or partnering with small businesses and vice versa, small businesses rely on large businesses for some of their dealings.
“There is a mutual system there so you can’t take one out. You can’t take ants out of the jungle, or the entire ecosystem will collapse.”
In the ACT, there are 28,000 businesses; about 16,000 of these are non-employing owner-operators and 10,000 are small businesses with less than five staff. The national figures are similar, with 96 per cent of all trading businesses being small or micro-sized.
“Small businesses together are a big employer of people and collectively are responsible for a big share of our Gross Domestic Product (GDP),” Michael explains.
For universities, creating a supportive climate for small businesses to survive is three-fold, according to Michael.
“Universities can play a role in helping small business survival through teaching, research and other support services. Courses and units that teach small business management, or entrepreneurship, at both undergraduate and postgraduate levels, are valuable.
“Research that has a practical focus, and can be applied, is also necessary. I would encourage all researchers to ask themselves if their outputs are theoretical or practical.”
Michael also speaks about small business advisory centres and the value of establishing one in Canberra to provide support for start-ups and existing businesses that are looking to grow.
“Canberra has to recognise that the future lies in the private sector. There are areas of growth in government such as artificial intelligence, high tech, gaming, health and education, but at the same time you still need all the basic services that only small businesses and the private sector can provide – whether that be restaurants, or coffee shops or drycleaners or people to build your house, people to sell your house, and people to service your car. It might not be glamorous, but it is needed.”
While the number of start-ups that don’t make it past the first year may seem daunting to those looking to venture into the business world, Michael is still encouraging.
“A business degree is a good start. If you have a dream or an entrepreneurial idea and you want to have a go and be your own boss, then you should certainly go for it. Universities are as good a place as anywhere else to do that.”
Words by Tara Corcoran. Photos: supplied and sourced.