Small businesses are the backbone of any economy, and that’s also true for the UK and Australia. They provide employment, goods, services, and contribute to innovation in a variety of ways.
However, there are some differences between small businesses in these two countries. In this article, we will explore how small businesses differ between the UK and Australia by looking at their size, structure, regulations, and access to finance.
By comparing these factors across each country’s respective small business landscape, we can gain insight into what makes them unique. We will also discuss the potential implications of these differences on each nation’s economic growth.
Size
Despite being two independently developed countries on opposite sides of the world, the sizes of small businesses in the UK and Australia are similar. In the UK, 75% of small businesses list the owner as the only employee, while the same is true with 60% of small businesses in Australia.
This has dramatically impacted both nations’ economies as it rapidly becomes one of the primary sources providing employment to thousands of people annually.
To improve and ensure steady growth, both governments have established specific state schemes to help fuel entrepreneurial endeavors – proving beneficial for all parties involved.
Structure
The structure of small businesses in the UK and Australia follows similar patterns. Both countries provide access to sole traders, partnerships, limited liability companies, and public companies.
Each type of business has its own advantages regarding tax liabilities, legal protection, and the ability to raise funds. However, there are some differences between the two countries.
For instance, the UK does not provide as much flexibility for sole traders who wish to expand their business operations by allowing them to transform into a limited liability company or public company.
Regulation
Regulations can be a significant factor for small business owners in both countries. Although the UK and Australia have similar overall regulations relating to health and safety, labor law, and environmental protection, there are some differences between them.
For instance, both countries have a minimum wage. Australia’s is 21.38 per hour, equivalent to around 12 pounds. On the other hand, we base our minimum wage on the employee’s age. Teenagers and people in their early 20s can be paid less than older adults.
Both countries have a variety of options for resources, such as electricity and internet, and small businesses can compare prices and go with what best fits their needs. Brits can go with a site like Money Supermarket, while a business in New South Wales will use a site like iselect electricity nsw for their comparison.
Access to Finance
Access to finance can be a major challenge for small business owners in both countries. However, there are some differences between the UK and Australia when it comes to financing options.
Banks remain an essential source of funding for small businesses in the UK.
Government-backed loan schemes such as the Enterprise Finance Guarantee (EFG) are also available to help businesses access funds.
In Australia, small business owners have more financing options, including venture capital and private equity investments. Government-backed loan schemes are also available through the Small Business Loan Guarantee Scheme (SBLGS).
Implications for Small Businesses
The collective economic impact of these businesses is immense, as they account for the vast majority of all companies in each country.
Moreover, their presence has helped to reduce unemployment and create thousands of jobs annually. They have also created a culture that encourages innovation and entrepreneurship.
Small businesses in the UK and Australia have also played an important role in helping to bridge the economic gap between different populations.
Their presence has been a key factor in expanding access to goods and services across diverse communities, providing individuals with greater opportunities for economic mobility.
The Takeaway
Small businesses in the UK and Australia play prominent roles in their respective economies, significantly impacting employment, innovation, and economic mobility.
With different regulations and access to finance options available in each country, it is essential for business owners to understand these differences before expanding or starting a small business.
By effectively leveraging both countries’ resources, entrepreneurs can gain valuable insights that will help them grow their businesses into successful enterprises.
