The report by the Mckell Institute highlights the significant contribution of microbusinesses to the economy and the opportunities to boost the sector into the future.

The Micro but Mighty: Magnifying Microbusiness in Australia, commissioned by NRMA Insurance, found that microbusinesses (which typically employ up to four people) make up 89% of all businesses in Australia.

The microbusiness sector increased in size by 14% over the past four years to 2.28 million businesses.

The report examines the changing nature of microbusinesses in Australia, how the COVID pandemic turbocharged the sector, and estimates that the economic contribution of microbusinesses is now greater than small business.

NRMA Insurance chief executive officer Julie Batch said the report underscores the value of microbusinesses to the nation.

“Microbusinesses start with a passionate owner, a fantastic idea, and thrive on community support. There are incredible opportunities for this sector, not only in economic contribution to the nation but also the positive impacts many of these businesses have within their local communities,” Ms Batch said.

The unique challenges for microbusiness owners identified in the report include:

  • limited access to resources and specialist knowledge
  • the lack of a formal definition of microbusiness
  • the ongoing threat of extreme weather, and 
  • cyber security risks related to operating online businesses.

The report also challenges the stereotype that the sector is predominantly men operating in trades, despite a growing proportion of women starting businesses, with the latest figures showing 35% of Australian businesses are owned by women.

The report’s key recommendations include:

  • establish a formal definition of microbusiness in Australia
  • address the structural barriers that limit access to finance for women who own microbusinesses
  • create a one-stop-shop resource for microbusiness support and resources across different levels of government
  • partner with the financial sector to provide education courses for microbusinesses that will help them grow, and
  • provide government support that treats microbusiness as a separate category from small business.

Download the report here.