What is Small Business?

What Is a Small Business?

While definitions vary, one of the most meaningful ways to define a small business is this:

"A business in which all the critical management decisions are made by one or two people without the aid of internal specialists."

This resonates strongly with Australian business owners because it reflects the hands-on, self-reliant nature of how most small businesses operate.

The Numbers Behind Australian Small Business

Although many academic and policy definitions classify a small business as having fewer than 100 employees, this benchmark doesn't reflect the lived experience of most Australian operators. The vast majority, over 95%, of Australian businesses employ fewer than 20 people.

Estimates suggest there are between 700,000 and 900,000 small businesses in Australia, forming the backbone of the national economy.

The Owner-Operator Dilemma

Most small business owners are self-motivated, skilled, and determined to achieve financial and personal independence. They often possess deep expertise in their trade, profession, or craft. However, what’s frequently lacking are strong general management skills, especially in areas like:

• Financial management and bookkeeping

• Strategic planning

• Marketing and advertising

• Human resources

• Systems development

This lack of business management acumen is not just a gap, it’s a major obstacle to growth.

Working In the Business vs Working On the Business

There is a stark difference between two types of small business owners:

• In-the-business owners do the work themselves, often tirelessly, yet rarely make time for strategic planning or growth. They remain trapped in the business, effectively becoming their own underpaid, overworked employee.

• On-the-business owners, in contrast, develop systems and delegate. They build processes so that others can operate the business without constant oversight. They focus on scalability and independence.

As the saying goes:

“A business is nothing more than a network of systems, and employees are there to run those systems.”

If you're not building systems, you're not building a business, you're just creating a job for yourself.

Final Thoughts

Understanding what defines a small business is only the starting point. The real challenge, and opportunity, lies in moving from survival to scalability.

At Dolman Bateman, we help small business owners move from reactive operators to proactive business builders. From tailored tax strategies to business advisory and management reporting, our team is here to help you work on your business, not just in it.

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Disclaimer:

The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.