Population boom = business boom?

25/09/09:'Population boom = business boom?' - Australia is steaming ahead as the fastest growing industrialised nation - with the population set to explode over the next four decades.

As well as importing more people, a baby boom is on its way - so get ready for those baby showers. It’s a proven fact that in tough economic times couples stay at home, make hay and the birth rate soars.

If the G20 leaders lined up in order of expected population growth, Kevin Rudd would be in 2nd place – behind King Abdullah of Saudi Arabia.

No wonder Rudd is smiling in the midst of our recession riddled cousins.

We even beat India and China hands down. Australia is expected to grow at a rate of 65 per cent - well above the global average - according to a survey by the US research group Population Reference Bureau.

Our own Australian Bureau of Statistics conservatively estimates the population will balloon from the current 21 million to 34 million by 2050. While Wayne Swan says Treasury estimates are closer to 35 million – quite a leap.

This presents an enormous opportunity to small business owners.

“In the federal treasurer’s own words, small business is the backbone of the Australian economy – and he’s right on the money,” said COSOBA the Council of Small Business of Australia.

With half of all private sector employees employed by SMEs (small to medium enterprises) the market is going to play a critical role in keeping Australia afloat.

SMEs currently generate a staggering 30 percent of our country's wealth already.

What does this mean? It means we will be facing more people, needing more products and services - which at the moment are increasingly supplied by SME’s.

The SME sector is the life blood of our economy - so it is more important now than ever that SMEs prepare for this future.

Prepare, via long term strategic planning. Global, rather than local, thinking. And by increasing brand recognition.

With Australia increasingly providing assistance to poorer nations, we should also be faced with more export opportunities for SMEs.

So it is vital that our internet presence is mature and sophisticated enough to attract and reassure international enquirers.

However, on the flip side, we are facing:

• Tightening of lending from the banks which has made life difficult for many
• We still have to fight to be heard – ‘big business’ is still the squeaky wheel that gets the oil
• We are faced with illogical and crippling taxes incurred by SMEs – payroll tax, high interest on loans
• Importance of Credit History – now greater focus more than ever.

We really do want a restoring of confidence in the sector. Yes, the Government handouts are helpful, such as the:

• Small business tax break - Extension and expansion of the Small Business Tax Break to 50 percent, available for expenditure incurred up to 31 December 2009;
• Small business support line - $10m over two years to help small businesses with advice during the recession.
• Small business online programme – this scheme is designed to help small businesses participate in the digital economy and enter the world of e-commerce, which can lead to more effective marketing, direct online sales and purchasing, and making it easier for customers to find a local business.
• The new R&D Tax credit (formerly R&D tax concession) supports small businesses by offering up to twice the current value of the tax R&D tax concession that is currently available.

As the backbone of the Australian economy, our characteristics are flexibility, resilience and hard work.

There is no doubt in my mind, that it is small business that has the capacity to capitalise on the recovering economy and exploding population if it is supported by the Government to do what it does best.

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