Performance Measures
Profits per FTE are highest for small firms...
Average profits per FTE, illustrated in figure 22, are significantly higher amongst small enterprises than any other size group.
...while the 50-99 category recorded a negative profit
While the economic downturn saw profits for all firm sizes take a hit over 1996/97,13 the 0-5 and 20-49 FTE size groups have since regained some ground. Average profits per FTE for these categories have risen 31 percent and 113 percent respectively over the year to June 1998. Other size categories have continued the downward trend, with the 50-99 FTE size group recording a negative average profit for 1997/98.
Figure 22
Small businesses recorded the largest combined profit
Due to the high number of small businesses in operation, enterprises with 5 or fewer FTEs recorded the largest combined profit for 1997/98. However, the average profit for these enterprises was only $79,000 compared to an average of $4.8m for enterprises employing 100 or more FTEs.
Figure 23
As illustrated in figure 24, average sales and other income per FTE increase with enterprise size over the first five size brackets, then decrease slightly for the group of firms employing 100 or more FTEs.
No consistent increase in annual income
No size category has seen a consistent increase in annual income, although two categories (10-19 and 20-49) have recorded a decrease in their total income in each of the last three years.
Figure 24
Large firms have the highest combined income
Summing figures over all firms in each size bracket, total sales and other income over 1997/98 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 $83m over 1997/98. 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 1997/98 of only $219,000.
It is interesting to note that, while large firms show the greatest total income (and the second highest per FTE), small firms record the greatest combined profit (and the greatest profit per FTE). We would expect the opposite to be true if larger firms were taking advantage of economies of scale to produce at a lower cost than could be achieved by smaller firms. However, these figures suggest that economies of scale may not be as important as the advantages that small firms have in areas such flexibility, speed and lower management costs.
Figure 25
Average wages per employee are highest for the 100+ FTE size category
Average real salaries and wages per employee14were highest for those enterprises in the 100+ FTE size group over 1997/98, a change from the previous year when the highest levels were recorded by the 50-99 category.
Figure 26
Large firms account for 50% of total salaries and wages
Total salaries and wages paid to employees are greatest for all firms employing greater than 100 FTEs, accounting for 54 percent of all monies paid out. In contrast to the figures for both sales and profits, firms employing 20-49 FTEs record the second highest value, accounting for 12 percent of all payments. Small firms who contribute 11 percent follow in third place, with slightly smaller payments made by firms employing 10-19 and 50-99 FTEs (9 percent each).
Figure 27
Table 5 presents statistics from the 1997/98 financial year relating to the average performance of firms within each size group, giving an indication of the relative sizes of firms in each bracket.
Table 5. - Average Performance Measures by Firm Size
Enterprise Size | Average Profit ($) per firm | Average Income ($) per firm | Average Total Salaries ($) per firm |
| 0-5 FTEs | 79,000 | 219,000 | 19,700 |
| 6-9 FTEs | 102,000 | 946,000 | 141,000 |
| 10-19 FTEs | 138,000 | 2,000,000 | 304,000 |
| 20-49 FTEs | 259,000 | 4,560,000 | 789,000 |
| 50-99 FTEs | -152,000 | 13,500,000 | 2,150,000 |
| 100+ FTEs | 4,780,000 | 82,700,000 | 15,600,000 |
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