Short version: Australia added 66,650 businesses in 2024–25, online spend hit $82.6 billion, and the online ad market grew 11.5% to $18.4 billion. Yet Australian small businesses trail their regional peers on growth, social media use and return on technology. The gap between businesses that measure their marketing and those that don't is widening. Below are the numbers, where they come from, and what we'd do about them.
1. There are more competitors than ever, and most are tiny
The ABS counted 2,729,648 actively trading businesses in 2024–25, up 2.5% (66,650) on the prior year. 437,150 businesses started and 370,500 closed, both higher than in 2023 and 2024 (ABS, Counts of Australian Businesses 2024–25).
Of those, 97.3% are small businesses (0–19 employees), 2.5% (67,857) are medium and only 0.2% are large. Some 64% have no employees at all, and self-employed businesses were the only small-business segment to grow, up 4.3% (ASBFEO, Number of small businesses in Australia, Aug 2025).
What it means: roughly 1,200 new businesses open every day. In most categories, the competitor you lose a customer to isn't a big brand. It's a sole trader with a good Google profile and fast follow-up. The advantage goes to the business that answers first and makes it easy to buy.
2. Growth is concentrated in a few industries
Health Care and Social Assistance grew fastest (+6.6%), followed by Transport, Postal and Warehousing (+5.1%). Construction recorded the most new businesses of any industry, with 76,414 entries (ABS).
Churn is also concentrated. Of the 14,153 companies that entered external administration in 2025–26 (down 4% on the year before), 24.5% were in construction, 14.7% in accommodation and food services, and 7.1% in retail trade (ASIC Corporate Insolvency Update, Oct 2026).
What it means: in health and allied services, demand is growing and the challenge is capacity and reputation. Reviews, booking conversion and local search matter most. In construction, hospitality and retail, the challenge is cash flow. Marketing has to be judged on cost per qualified lead and payback period, not reach.
3. Australian small businesses are behind their regional peers
CPA Australia's 2025–26 Asia-Pacific Small Business Survey compares 11 markets. Australia is near the bottom on most growth and digital measures (CPA Australia, 2025–26):
- 45.9% of Australian small businesses grew in 2025, against a survey average of 62.5% (ranked 9th of 11).
- 52.8% expect to grow in 2026, compared with 69.9% across the region.
- 31.7% do not use social media for business at all, the highest rate of any market surveyed (average 12.0%).
- Only 29.6% said technology investment improved profitability (average 56.3%).
- 43.6% earn more than 10% of revenue online (average 63.4%).
What it means: the problem isn't that Australian SMBs don't buy technology. It's that the technology isn't connected to revenue. When fewer than a third see a profit impact, the missing piece is usually measurement: nobody can see which spend produced which customer.
4. Most small businesses use digital tools, but few use them for marketing
A June 2025 survey of 516 owners by Square and COSBOA found 85% use at least one digital tool. But the mix is lopsided: 51% use accounting software, while only 26% use digital marketing tools (COSBOA & Square, State of Small Business Report 2025).
What it means: three in four small businesses are making marketing decisions without the data to back them. That's the cheapest competitive advantage available right now. A working analytics set-up, conversion tracking on every enquiry and a simple CRM put you ahead of most of your market.
5. The online ad market is growing faster than the economy
Australian internet advertising reached $18.4 billion in 2025, up 11.5%. Search alone was $8.0 billion, a record. Video grew 19.8% to $5.4 billion and now makes up 29% of the market, with social video up 35.1% (IAB Australia & PwC, March 2026).
What it means: more money chasing the same searches and feeds means more competition in every auction. SMBs can't outspend that. They win on targeting and relevance instead: tighter audiences, better first-party data fed back to the platforms, and landing pages built to convert.
6. Customers are shopping online more often, but spending less each time
Australians spent $82.6 billion online in 2025, up 14%. 9.8 million households (82%) shopped online, and online now accounts for 24% of all retail spending. But the average basket fell slightly to $96. Victorians spent $20 billion online, up 13% (Australia Post eCommerce Report 2026).
What it means: more frequent, smaller purchases reward retention over acquisition. For e-commerce SMBs, the biggest lever is often the second order. That means email and SMS flows, customer audiences in Google and Meta, and measuring customer lifetime value rather than first-purchase ROAS.
What we'd do with these numbers
If you run a small or medium business, this is the order we'd work in:
- Fix measurement first. Track every lead and sale back to its source in GA4 and your ad platforms. If you can't see cost per lead by channel, you can't cut waste.
- Build your own audience data. Customer lists, enquiry data and website behaviour are the inputs that make ad platforms work harder for small budgets.
- Pick the channels your industry's data supports. Local search and reviews for growing service categories. Efficient lead generation for cash-sensitive ones. Retention for e-commerce.
- Activate, then measure again. Run campaigns against clear targets, review monthly and move budget to what's working.
Round15 is a Melbourne-based, data-led marketing agency working with small and medium businesses across Australia on data, strategy, audiences, analytics and activation. Book a free consultation and we'll review your current measurement set-up and show you where the gaps are.
Sources are linked throughout. Figures are as published by each source at the time of writing (November 2026).
