The bank surveyed more than 800 Australian SMEs over the past year – defined as businesses with turnovers of between $100,000 and $50 million – and found that SMEs were responsible for creating around 7 million jobs in Australia.
NAB’s latest whitepaper Moments That Matter aims to shed light on the state of Australian small businesses, including what opportunities and challenges exist in the sector today.
The report found Australia’s small business environment to be fertile ground for growth and new ideas.
One in ten SMEs were actively growing their business, while nearly half (45%) aimed to expand within the next three years.
Over a third of these growing businesses have invested in winning new customers during the past year.
More than a quarter of growing SMEs also invested in cost reductions, new equipment or premises, and the hiring of new staff over the past year.
In terms of growth strategy, 40% of small and medium businesses planned to launch new products or services in order to grow their operations.
Nearly a third (32%) also planned to start selling online or increase their sales through the internet.
Young people leading the way in small and medium business
NAB found that Australia’s small business landscape is relatively young.
Half of all SMEs had been in business for less than 10 years, while the majority (56%) were run by Gen X or Millennial owners.
The internet has also become a crucial part of Australian business, as well as an illustration of the sector’s generational divide.
The majority of businesses surveyed said that they simply would not exist without the internet, a figure which rose to a massive 63% among Millennial owners.
Furthermore, nearly a quarter of Millennial-run businesses (23%) were online-only, with no customer-facing retail presence whatsoever.
By comparison, this figure dropped to less than one tenth (9%) when measured amongst all other SMEs.
SME owners feeling confident about the future
NAB’s research also surveyed the outlook of SME owners with regards to future changes, and found that the vast majority of Australian small businesses are feeling happy about the future.
Four in five SMEs said they were optimistic about their business, and a smaller majority (66%) said they felt confident in their prospects over the next few years.
A similar number (65%) expected their business’s profitability to grow over the coming three years.
Aussie businesses were also forward-thinking, with more than two thirds saying they would make time to keep up with new technology in order to keep their business competitive.
More than half of the total sample for NAB’s survey were actively looking for opportunities to automate their business processes, or to otherwise increase efficiency and save money.
The future state of the economy was also a worry for a quarter of all businesses surveyed, but less so for Millennials.
Just 14% of younger business owners saw the economy as a future challenge, suggesting a growing optimism in the Australian SME sector alongside the rapid changes in technology.
— NAB (@NAB) June 5, 2017