DISCUSS THE CHALLENGE FACING SMALL BUSINESSES IN AUSTRALIA IN THE 21STCENTURYAustralia is a famous country with its constant growing economic standard, it is well known for looking after its people well. A large number of people are leaving or have left their highly paid jobs to start their own businesses in order to be their own bosses and work according to their own standards. But this is not that easy nor can anyone set up their own large business easily that is why smaller businesses are more popular not only in Australia but all over the world.
But with this comes many challenges which these small business must face, what are they; we will discuss this issue in this paper. Firstly it is important to know what a small business is. One can describe a small business as something that is owned independently and operated with a small number of employees, if we take a look at the US and the EU there are around under 50 employees but since our concern is with Australia that is what we will discuss. A small business in Australia is defined as a 1-19 employees and a medium business would be around 20-200 employees.
In addition to the number of employees the other method used to clarify small companies include annual sales, the value of the assets and a balance sheet. Small businesses are usually not dominant in their field of operation. Besides Australia, there are many countries where small businesses are common depending upon the economic system in operation, typical examples would be of bakeries, hairdressers, lawyers, accountants, guest houses etc. the smallest businesses which are often located in private homes are called “micro businesses” and another term is “mom and pop business” which is a common expression for a single family operated business with maybe few or possibly no employees other then the owners. Where there are challenges there are also advantages, and that is that having a small business can be started at a very low cost and it can also be done on a part time basis.
The properties of the small business tend to be more intimate with their customer and client.
And as a result it accounts in to more accountability and responsiveness. another advantage is the independence which comes with it, a survey was done and it showed that the main reason for people leaving their jobs at other companies was that they wanted to be their own boss and around 38% agreed to this. The ability or the freedom to operate independently is a reward for small business owners, these owners also have the pleasure of making their own decisions within the constraint imposed by the economic and environmental factors.
But however, entrepreneurs have to work very long hours and understand that ultimately their customers are their bosses. Now lets discuss the challenges which these smaller businesses are facing today, the first and foremost is the case of bankruptcy, this is a result of poor planning on part of the owner. Therefore it is advised that the owner of the business should have access to a sum of money which is at least equal to the projected revenue for the first year of business. An example of this would be if the future owner thinks that he/she will generate $100,000 in revenues in the first year with $150,000 in start up expenses then he/she should have no less then $250,000 available to them.
If they don’t have this then bankruptcy occurs.