My eye was caught this morning by a new report from the big end of town’s business lobby group, the Business Council of Australia, which is designed to show the close connections between large and small business.
It’s really quite interesting, and there are some great stats in there. For example, the BCA has calculated that there are $474 billion worth of transactions between small and big businesses each year.
It also shows that 38% of large businesses state that their main supplier of goods and services is small business, while 22% of large businesses’ main source of income is from small businesses.
On the flipside, 17% of small businesses state that their main supplier of goods and services is large business, while 18% of small businesses’ main source of income is from large businesses.
There’s even a stat in there to gladden the hearts of SMEs who sell online – the report states that of the $122.9 billion of income generated through the internet each year, small business generates $67.3 billion, while large businesses generate $55.6 billion. In other words, the little guys are leading the big boys in the battle for the online dollar!
BCA chief Katie Lahey says the report is designed to break down the us-and-them mentality between big and small businesses, by highlighting the close relationship between the two groups.
She also argues large and small businesses have similar priorities – slashing red tape, improving infrastructure and tax reform – and they should work together to drive change in these areas.
All of which sounds pretty reasonable, if not a little obvious (the stats in the report are interesting, but I’m pretty sure we also recognise that large and small businesses are constantly working with, and selling to, each other).
Small business often does struggle to get heard on issues like tax reform and infrastructure, so working with the big end of town to drive change makes sense.
However, on issues like competition, many areas of regulation, industry support and government representation, there are often big divides between the large and small business community. The drivers, the problems, the challenges and opportunities faced by SMEs and larger corporate are often very different.
While the small business should take every opportunity it can to extend its influence by working with large companies where appropriate – a strong, independent voice remains essential.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
