What is a 'small business'? And why does it matter?

And who is a 'small business owner'? Much like John Cleese, Ronnie Barker and Ronnie Corbett in 'The Class Sketch', the mind immediately pictures a caricature of the phrase and that's what tends to stick.

But it does depend on your perspective. If you're in government and dealing more often with very big businesses than with smaller ones, your definition of small is likely to be, well, not that small.

Statistical bodies and governments have their own varying definitions. In the European Union for example, a small business is one with less than 50 employees. Here in Australia ASIC defines a small business as one with annual revenue of less than $25M and less than 50 employees and gross assets of less than $12.5M, where any two of these three criteria are met.

The ATO has its own definition again, at least for tax concessions and for them a small business is one that turns over less than $2M. And the ABS has yet another definition - less than 20 employees.

Most people do not think in terms of these technical definitions. The words 'small business' conjure up the image of the corner shop or backstreet workshop in most people's minds, despite the fact that the official definitions above catch a much wider range of larger and more sophisticated businesses.

Why is this important?

If you're not aware of these official definitions, you might assume that 'small' means 'micro'. Or that it means a business with say four or five employees.

If you think this way, you might be missing a trick, because some of the government bodies above have some 'special arrangements' for small businesses.

One of these is the Small Business Advisory Service - a service funded by Federal Government (it's referenced on business.gov.au), which provides free and/or very low cost, high level advice via experienced independent consultants to 'small business'*.

The definition of small business for this purpose is an entity not employing more than 20 full time equivalent staff. That's in fact quite a reasonably sized business. And advisors that take part in the scheme are not government employees advising from a theoretical standpoint, but business people with a lot of experience in their field, giving practical advice and/or training that can yield results quickly.

At My Marketing Person we have a team member who is an advisor with the Small Business Advisory Service (via Brisbane based provider GBSBAS) for digital marketing, although the service has a range of expert advisors covering a range of other areas such as business planning, HR, legal and finance/accounting.

*businesses based in the Greater Brisbane area with less than 20 full time equivalent staff can access up to 5 hours of advice/training under the scheme. The first hour is free of charge and subsequent hours are $20 per hour.

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