Small businesses spend an average of $8600 per month with other small businesses, which amounts to $103,000 a year, according to a recent study. Considering that there are around 1.98 million small businesses in Australia, the study estimates that business-to-business (B2B) spending at the smaller end of town could be a $204 billion industry.
American Express has released new research as part of its Shop Small campaign that looks at how small businesses can benefit the Australian economy. The credit card company surveyed 500 small businesses and 24% of them noted that they spend more than $10,000 with other small operators each month with 10% spending more than $20,000; this works out to be an average of $8600 per month.
There is a strong sense of collaboration within the small business community. Over 80% of respondents said they'd like to work with other small businesses nearby. Around one-third of respondents said they directly benefited from other small businesses in the area:
- 24% said new businesses setting up shop nearby makes it easier to source products and services.
- 32% said new businesses bring with them increased customer traffic.
- 31% said new businesses helped them increase profits.
Small businesses are also noted to be good at paying each other, according to a separate report that called out how bigger organisations are bad at coughing up money that is owed to the smaller guys. Australian Small Business and Family Enterprise Ombudsman Kate Carnell has launched an inquiry into late payments to small and medium businesses.
Are you a small business owner who is working closely with other small businesses? Let us know how it's going in the comments.