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‘The beating heart of communities’: Why small businesses are culturally essential

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A new study has been released highlighting the essential role small businesses play in shaping communities, with Australian consumers revealing their affection for the sector and its contribution to Australia’s way of life. 

The commissioned study conducted by Forrester Consulting on behalf of Xero, ‘The Next Chapter for Small Business’ found 87 per cent agreed that small businesses played an active role in shaping the culture of their local community, slightly higher than the global average of 81 per cent. 

The study also found that 85 per cent of Australian consumers agreed that small businesses were essential to the global economy, which was again higher than the global average of 75 per cent. 

“Small businesses have long been the beating heart of communities in Australia. This has never been more apparent than in recent times,” said Trent Innes, Managing Director of Xero Australia and Asia.

“The resilience of the small business sector has shone through this year, and it has been matched by a willingness and determination of communities to get behind them.”

Investigating how small businesses in key markets around the world have fared in the wake of COVID-19, the study is based on a survey of more than 1,000 small business owners and 1,000 small business customers evenly divided across Australia, New Zealand, Singapore, the UK, the US and Canada. The research also included interviews with individual small business owners in those countries.

Globally, seven in 10 consumers say they feel proud of the businesses in their communities and would feel a personal loss if those businesses were to close. Moreover, the leading reason consumers purchase from small businesses is to contribute to their community and support the local economy and local jobs.

Small businesses recognise the role they play 

Similarly to consumers, Australian small businesses acknowledge how closely they are tied to the communities around them. Seven in 10 Australian small businesses agree that small businesses play an active role in shaping the culture of their local community. 

Small business taking on big business with confidence  

The research uncovers the unique value small businesses deliver to consumers, distinct from large enterprises, and that consumers depend on small businesses across all aspects of their lives. This provides confidence to small businesses, with nearly seven in 10 of Australian small businesses believing they have a competitive advantage against large enterprises.

Drivers of consumer behaviour when interacting with small businesses

The main reason Australian consumers are purchasing from small businesses is that they want to contribute to their local community ahead of more practical reasons of proximity and access to consistent and high-quality products.

The pandemic has also shifted consumers’ expectations of small businesses, with increasing importance placed on empathy. The study shows 93 per cent of consumers would trust a business, buy more, and recommend it to friends and family if it demonstrated empathy toward them, other customers and the community. This could potentially include implementing special rules to protect customers’ health during COVID-19, staying open longer and offering delivery options.


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Ellie Dudley
Ellie Dudley is a journalist at Dynamic Business with a background in the startup space and current affairs reporting. She has a specific interest in foreign investment and the Australian economy.