Last Thursday, the Australian Small Business and Family Enterprise Ombudsman launched a new quarterly index. The Small Business Pulse will capture how small businesses are faring across three broad areas. These areas are sentiment, business transformation, and business operation.
The difference between the Pulse and existing SME indexes is its use of non-traditional data sources, such as internet searches. These alternative data sources will complement more traditional measurements such as customer data, sample populations, and specific questions.
“The ASBFEO Pulse probes factors which range from people considering starting a business, responses to changing conditions, those who are transforming or growing their business, through to those who are considering closing their business and those who finally do so,” said the Ombudsman.
“The Pulse was created in line with OECD best practice and brings together a range of data sources that can provide early indicators of changes in the lived experience of small business and the motivations that drive them and is particularly important when conditions are changing rapidly, which traditional sources of information and point-in-time surveys often miss,” he added.
The time-series of the Pulse covers the last eight years, according to the Ombudsman.
The August Pulse
Like similar recent SME health reports, the August Pulse reveals a business environment well below the long-term average. It fell 0.6 per cent in August, the eighth consecutive fall.
“For small and family businesses, higher interest rates not only impact their costs of financing but have profound implications for customers in terms of their spending, preferences and confidence,” said the Ombudsman.
“Small business owners are concerned about the viability of their business and whether they can ride the tough economic climate out.”
Happily, early indicators are suggesting that the Pulse may pick up when it next comes around in November.
“Queries from people considering taking the leap into business have remained relatively high since February,” said the Ombudsman. “Similarly, there has been a rise in small business owners interested in growth ambitions and seeking business coaching and mentoring.”
