Performance Measure
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 all firms declined between 1996 and 1997
While the economic downturn saw profits for all firm sizes take a hit over 1996/199710, the 0-5 and 20-49 FTE size groups have since regained some ground. Average profits per FTE for these categories have dropped 20 percent and 60 percent respectively over the year to June 1999 following a rise of 31 percent and 113 percent in the previous year. Other size categories, on the other hand, showed a rise after the continuing downward trend, especially with the 50-99 FTE size group recording a negative profit for 1997/1998.
Figure 22. Real Profit11 per FTE 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 1998/99. However, the average profit for these enterprises was only $58,000 compared to an average of $5.2m for enterprises employing 100 or more FTEs.
Figure 23. Total Real Profit by Enterprise Size
No consistent increase in annual income
As illustrated in figure 24, average sales and other income per FTE increase with enterprise size increases.
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.
Figure 24. Average Real Sales and Other Income per FTE by Enterprise Size
Large firms have the highest combined income
Summing figures over all firms in each size bracket, total sales and other income over 1998/1999 were largest for the group of firms employing 100 or more FTEs, reflecting the size of the individual enterprises. Enterprise in this size bracket generated an average income of $102m over 1998/1999. 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 1998/1999 of only $283,000.
It is interesting to note that, while large firms show the greatest total income (and the highest per FTE), small firms record the greatest combined profit (and the greatest profit per FTE). We would expect the opposite to be true if larger firms were taking advantage of economies of scale to produce at a lower cost than could be achieved by smaller firms. However, these figures suggest that economies of scale may not be as important as the advantages that small firms have in areas such as flexibility, speed and lower management costs.
Figure 25. Total Real Sales and Other Income by Enterprise Size
Average wages per employee are highest for the 100+ FTE size category
Average real salaries and wages per FTE were highest for those enterprises in the 50-99 FTE size group over 1998/1999, a change from the previous year where the highest levels were recorded by the 100+ category.
Figure 26. Average Real Salaries and Wages per FTE by Enterprise Size
Large firms account for 50% of total salaries and wages
Total salaries and wages paid to employees are greatest for all firms employing greater than 100 FTEs, accounting for 49 percent of all monies paid out. In contrast to the figures for both sales and profits, firms employing 20-49 FTEs record the second highest value, accounting for 14 percent of all payments. Small firms who contribute 10 percent follow in fourth place, with similar payments made by firms employing 10-19 and 50-99 FTEs. (6 and 9 percent respectively)
Figure 27. Total Real Salaries and Wages by Enterprise Size
Table 5 presents statistics from the 1998/1999 financial year relating to the average performance of firms within each size group, giving an indication of the relative sizes of firms in each bracket.
Table 5. Average Performance Measures by Firm Size
| Enterprise Size | Average Profit ($) per firm | Average Income ($) per firm | Average Salaries ($) per firm |
|---|
| 0-5 FTEs | 58,000 | 283,000 | 20,300 |
| 6-9 FTEs | 72,000 | 964,000 | 149,000 |
| 10-19 FTEs | 157,000 | 2,022,000 | 317,000 |
| 20-49 FTEs | 113,000 | 5,016,000 | 947,000 |
| 50-99 FTEs | 684,000 | 14,345,000 | 2,868,000 |
| 100+ FTEs | 5,199,000 | 101,670,000 | 15,555,000 |
Back to Top