Performance Measures
Profits per FTE are highest for small firms
Profits per FTE, illustrated in figure 22 are significantly higher amongst small enterprises than any other size group
Profits for most firms declined between 1996 and 1997
The economic downturn saw profits for all but 6-9 FTE size firms take a hit over 1996/1997,15 with the 20-49 FTE size group experiencing the largest fall, of 77.5 percent. It is the 20-49 FTE size group however, which is the only group to have now recovered fully to the 1995/1996 level, assisted mainly through a 274 percent increase for the 1999/2000 period. Profits for 1999/2000 per FTE for all other categories range from a rise of 21 percent for 6-9 FTE size firms, to a fall of 53 percent for the 50-99 FTE size group. This follows a volatile period for the 50-99 FTE size, having almost recovered to 1995/1996 profit levels in 1998/1999, following a fall in 1997/1998 where the group actually recorded a negative profit.
Figure 22: Average Real Profit16,17 per FTE18 by Enterprise Size
Small Businesses recorded the largest combined profits
Due to the high number of small businesses in operation, enterprises with five or fewer FTEs recorded the largest combined profit for 1999/2000. However, the average profit for these enterprises was only $48,000 compared to an average of $6.5m for enterprises employing 100 or more FTEs.
Figure 23: Total Real Profit by Enterprise Size
As illustrated in figure 24, excluding small firms, average sales and other income per FTE increase with enterprise size increases.
No consistent increase in annual income
No size category has seen a consistent increase in annual income, although two categories (0-5 and 6-9) have recorded a decrease in their total income in each of the last three years. In 1998/1999 100+ FTEs showed the only increase.
Figure 24: Average Real Sales and Other Income per FTE by Enterprise Size
Large firms have the highest combined income
Summing figures over all years for each firm size, total sales and other income over 1998/2099 were largest for the group of firms employing 100 or more FTEs, reflecting the size of the individual enterprises. Enterprises in this size bracket generated an average income of $86 over 1999/2000. The relatively high level of sales recorded by small enterprises reflects the large number of businesses with 5 or fewer FTEs, with each individual enterprise recording an average income level for 1999/2000 of only $226,000.
It is interesting to note that, while large firms show the greatest total income (and the highest per FTE), small firms record the greatest combined profit (and the greatest profit19 per FTE). We would expect the opposite to be true if larger firms were taking advantage of economies of scale to produce at a lower cost than could be achieved by smaller firms. However, these figures suggest that economies of scale may not be as important as the advantages that small firms have in areas such as flexibility, speed and lower management costs.
Figure 25: Total Real Sales and Other Income by Enterprise Size
Average wages per employee are highest for 50-99 FTE size category
Average real salaries and wages per FTE were highest for those enterprises in the 50-99 FTE size group over 1998/1999 and 1999/2000, a change from 1997/1998 when the highest levels were recorded by the 100+ category.
Figure 26: Average Real Salaries and Wages per FTE by Enterprise Size
Large firms account for 50% of total salaries and wages
Total salaries and wages paid to employees are greatest for all firms employing greater than 100 FTEs, accounting for 49 percent of all monies paid out. In contrast to the figures for both sales and profits, firms employing 20-49 FTEs record the second highest value, accounting for 14 percent of all payments. Small firms who contribute 11.2 percent follow in third place, with similar payments made by firms employing 50-99 and 10-19 FTEs. (10.6 and 9 percent respectively). Firms employing 6-9 FTEs contributed only 6.6 percent.
Figure 27: Total Real Salaries and Wages by Enterprise Size
Table 5 presents statistics from the 1999/2000 financial year relating to the average performance of firms within each size group, giving an indication of the relative sizes of firms in each bracket.
Table 5: Average Performance Measures by Firm Size
| Enterprise Size | Average Profit ($) per firm | Average Income ($) per firm | Average Total Salaries ($) per firm |
|---|
| 0-5 FTEs | 48,000 | 226,000 | 21,000 |
| 6-9 FTEs | 86,000 | 927,000 | 143,000 |
| 10-19 FTEs | 144,000 | 1,882,000 | 295,000 |
| 20-49 FTEs | 427,000 | 4,510,000 | 895,000 |
| 50-99 FTEs | 313,000 | 12,168,000 | 2,807,000 |
| 100+ FTEs | 6,502,000 | 85,974,000 | 14,676,000 |
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