Starting a small business is a journey that will reveal the entrepreneur’s talents, weaknesses, and skills. You will discover flaws you had not identified and virtues that will help you be better in professional and personal aspects. Entrepreneurship’s path is full of obstacles and stones, but undoubtedly, knowledge is the best tool to face them.

As of June 2021, there are 2,402,254 companies in Australia, with more than 227,000 exiting the market. According to the Australian Bureau of Statistics, around 365,000 were incorporated, leading to an increase in the number of companies by 3.8%. Despite the Covid-19 pandemic, the numbers are encouraging and this should be the first indicator to consider when setting up a business.

Why is it important to know the numbers?

To achieve healthy entrepreneurship that can stand on its own, you must know data and statistics to understand each sector and industry.  What works in one sector does not necessarily work the same way in another.

When researching data, the first assignment is to discover what is the most profitable business. This way, you will see the picture more clearly and make better decisions before starting this new adventure.

Better data can help you understand if now is the right time to start a new business, and even how to scale a small business into a larger one.

Data to help guide you in creating your business

It is necessary to consider many aspects to know what type of business you should start: your talent, passion, abilities, financial resources, and many other variables can define the success of a company.

An extremely relevant factor to consider is the industry’s statistics in which you intend to enter, from this data you can analyze how you will get the most out of each indicator.

In 2020-21, the three industries with the highest net business and property growth in Australia were

• Construction with 16,603 new businesses, Professional, Scientific and Technical services with 14,432, and Health Care and Social Assistance with 10,674 (source).

While the three sectors with the highest percentage growth in this same period were:

• Other Services reached 7.4%, Health Care and Social Assistance 7.2% and Retail Trade achieved 6.3% between 2020 and 2021.

Despite being one of the significant participants due to mobility restrictions, the Transport, Postal, and Warehousing sector is considered the big loser this year. It decreased by 5,589 companies, representing -2.8%.  

Other industries that had adverse results in the last year, compared to other sectors, were:

– Public Administration and Safety. -1.4%

– Mining 0.5%.

– Agriculture, Forestry and Fishing 0.8%

These industries are simply at a different point in the business cycle.

Other interesting data

The race to get the most profitable business is full of relevant information; Other statistics that future entrepreneurs should care about focus on geography. The fact that there are many companies in the area where you are looking to start a business can mean a lot of competition and economic activity. The best economics books can help you understand which data is most relevant, and how to get the most out of it through rigorous analysis. The data is relevant, but your analysis is more important. 

• 5.8% increase in the number of companies in the Australian Capital Territory
• 4.0% the number of companies in New South Wales
• 2.8% increase in the number of companies in Northern Territory and South Australia

Another statistic that generates excellent projections for the future is the growth of companies with employees in Australia. Businesses with 1 to 4 employees increased by 15.2%, companies with a range of 5 to 19 employees grew by 7.6%, while the number of companies with no employees decreased by -2.2%. This last figure is not necessarily bad news, as many of these institutions have hired workers and are no longer owned by a solopreneur.

Numbers are the best allies to achieve the most profitable business; use all the statistical tools at your hand to gain more knowledge.

Entrepreneurship is an assignment that requires leadership, talent, courage, strength, and a cool head to not fall victim to impulses. Analyze all available statistics to get the ideal business, the one that satisfies you 100%. Check out the best business books for other stories, anecdotes and explicit advice on how to start and grow a small business.