Topic 3 – Business Planning

Definition and Role

Topic 3: Business Planning
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 SME
Small to medium enterprises
SMEs make a significant contribution to Australia’s gross domestic product and balance of
payments, to employment, invention and innovation. The past 12–18 months have been
extremely challenging for most SMEs in Australia due to COVID-19
SME’s (small to medium enterprises)

• SMEs are very important to the

Australian economy, regarded as
the ‘engine room’ of economy
• Quantitative measures
• Employs between 5 – 199
employees
• Qualitative measures
• Independently owned &
operated
• Personalised service
• Local target markets
• Locally based
Characteristics of SME’s
• According to the ABS in February 2019, SMEs accounted or
approximately 99.8 per cent of all private sector businesses.
• no universally accepted definition of a SME.
• the SME sector is extremely dynamic and changing daily.
• During a boom time in the economy, the number of SMEs increases
Number of
rapidly. During a recession, business failures far outweigh business
commencements.
SME’s
• According to ABS research, at February 2019 there were 2 063 
455 micro businesses, 196 629 small business and 50 338 medium
businesses in the Australian economy.
• It is important to remember that even though medium-sized businesses
represent only about 2 per cent of all SMEs, they play an important role
because of the large number of people they employ.
 Australian small to medium enterprises:
• employ about 68.3 per cent of all the people working in the private
sector (44.2 per cent in small businesses and 24.1 per cent in
medium businesses)
• produce approximately 55 per cent of all the products produced
Role of SME’s
each year
• generate an increasing amount of our total exports
• account for 43 per cent of all money spent on R&D
• provide a wide range of products used by large businesses
• earn more profits and pay more taxes than do large businesses.