Business Franchise Australia


Global study underscores the role of small businesses in shaping Australian communities

Australian consumers place the most value on small businesses from a community, culture and economic perspective, compared with their global counterparts.

Xero, the global small business platform, released a study highlighting the essential role small businesses play in shaping communities, with Australian consumers revealing their affection for the sector and its contribution to Australia’s way of life.

The commissioned study conducted by Forrester Consulting on behalf of Xero, ‘The Next Chapter for Small Business’ found nearly nine in 10 Australian consumers (87%) agreed that small businesses played an active role in shaping the culture of their local community, slightly higher than the global average of eight in 10 (81%).

The study also found that 85% of Australian consumers agreed that small businesses were essential to the global economy, which was again higher than the global average (75%).

Investigating how small businesses in key markets around the world have fared in the wake of COVID-19, the study is based on a survey of more than 1,000 small business owners and 1,000 small business customers evenly divided across Australia, New Zealand, Singapore, the UK, the US and Canada. The research also included interviews with individual small business owners in those countries.

Globally, seven in 10 consumers (69%) say they feel proud of the businesses in their communities and would feel a personal loss if those businesses were to close. Moreover, the leading reason (39%) consumers purchase from small businesses is to contribute to their community and support the local economy and local jobs.

“Small businesses have long been the beating heart of communities in Australia. This has never been more apparent than in recent times. The resilience of the small business sector has shone through this year, and it has been matched by a willingness and determination of communities to get behind them. As we chart a path to economic recovery, the resurgence of the small business sector will depend upon the same commitment from communities to champion their success,” said Trent Innes, Managing Director at Xero Australia and Asia.

Small businesses recognise the role they play

Similarly to consumers, Australian small businesses acknowledge how closely they are tied to the communities around them. Seven in 10 Australian small businesses (70%) agree that small businesses play an active role in shaping the culture of their local community, with the global average at 69%.

Small business taking on big business with confidence 

The research uncovers the unique value small businesses deliver to consumers, distinct from large enterprises, and that consumers depend on small businesses across all aspects of their lives. This provides confidence to small businesses, with nearly seven in 10 of Australian small businesses (67%) believing they have a competitive advantage against large enterprises.

Drivers of consumer behaviour when interacting with small businesses

The main reason Australian consumers are purchasing from small businesses is that they want to contribute to their local community (42%) ahead of more practical reasons of proximity (36%) and access to consistent and high-quality products (27%).

The pandemic has also shifted consumers’ expectations of small businesses, with increasing importance placed on empathy. The study shows 93% of consumers would trust a business, buy more, and recommend it to friends and family if it demonstrated empathy toward them, other customers and the community. This could potentially include implementing special rules to protect customers’ health during COVID-19, staying open longer and offering delivery options.

“It is a critical time for small businesses around the world to focus on a few areas to improve their ability to survive.  This research reveals the unique role they play in our communities as well as the variety of ways in which they can build resilience,” said Rachael Powell, Chief Customer Officer at Xero. “How these small businesses expand their capabilities, communicate with customers, adopt new technologies and get support will define their success while we continue to navigate with this pandemic.”

For more detailed information on ‘The Next Chapter for Small Business’, visit