More small businesses are being set up during the pandemic, as lockdowns spark career pivots

More small businesses are being set up during the pandemic, as lockdowns spark career pivots
  • New ABS figures show that the number of small businesses has actually increased since the start of the pandemic.
  • The data shows a 15.2% jump in registrations for small businesses over the past financial year.
  • Healthcare, construction and retail have also seen a boost in new businesses. 
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Even as many have been forced to shrink physical operations due to lockdowns, new registrations for small businesses are actually on the rise. 

Data released by the Australian Bureau of Statistics (ABS) shows an increase in the number of small businesses registered during the pandemic — up 15.2% over the last financial year.

And in the June quarter, which rounded out just as Greater Sydney plunged into a new lockdown, the number of businesses rose by 1.4%, with 34,000 created. 

The ABS also revealed which industries saw a boom, with healthcare and retail — including e-commerce ​​— topping the list with growth of 7.2% and 6.3% respectively.

The construction sector saw the largest net increase in business with a jump from 16,603 to 410,839 businesses. 

This spike was no doubt driven by the government’s HomeBuilder program, which handed out $25,000 grants for building and renovation projects and began in June 2020.

At the same time as the small business sector is seeing surprising green shoots, evidence shows businesses have been protected from insolvency by government support. 

While the federal government has not returned to the JobKeeper wage subsidy that enabled businesses to retain their staff over 2020, the government launched a federal loan scheme to support businesses, which was recently expanded.

Corporate regulator ASIC said an average of 8,000 businesses close annually, but this fell dramatically to just 4,200 in the past financial year. 

The ABS figures also show that the number of sole traders and small organisations entering the workforce was also boosted.

The last 12 months saw an increase of 15.2% in businesses with one to four employees; from 92,495 to 699,623 organisations.

Additionally there was a 7.6% spike in the number of businesses with five to 19 employees. 

Over the past financial year the number of businesses employing new staff jumped by 13.6%, with a net increase of 58,209 businesses moving from non-employing to employing.

Alexi Boyd, chief executive of the Small Business Council, told the ABC that the uncertainty of the pandemic had lead to a desire by some to take control of their careers.

“People are saying, ‘Well I’ve got no opportunities here to see an increase in my wage if I’m working full-time for a large company but I can be more in control of what I can charge for my goods and services if I’m in my own business,'” Boyd said. 

She said in particular workers in stable fields which had seen an increase in demand since the start of the pandemic, such as IT professionals, had set up businesses where they could work from home. 

“It’s a lucrative place to perhaps start a business because there’s a real shortage of skilled workers,” Boyd said.