The rising population in high-growth hot spots across Australia provides ideal conditions for start-up businesses, according to demographer Bernard Salt.
Salt, a partner at KPMG, told StartupSmart that rapidly expanding suburbs are delivering opportunities to budding entrepreneurs, adding that the government must aid small business growth.
KPMG unveiled a report that found that the western suburbs of Melbourne are now the fastest growing region in Australia, outstripping the Gold Coast. The districts of Wyndham and Melton added 18,000 new residents over the 12 months to June 2009, compared to 17,000 additions in the Gold Coast.
Western Melbourne, along with the northern suburbs of Brisbane and north west Sydney, are identified by Salt as prime locations for start-up businesses.
“In areas like this, people are more likely to set up a business associated with property construction and infrastructure, such as a plumber or an electrical contractor,” he says.
“There is $180 million in new retail spending every 12 months in western Melbourne and not all of that will be in large shops. Strong growth means strong entrepreneurial opportunities.”
“The Gold Coast, for example, isn’t as singularly old as it once may have been. There’s been a lot of growth there in the commuter suburbs, hanging off the back of the railway line.”
Age is a crucial factor in start-up growth, Salt stresses.
“Small business is associated with a particular stage of life, around 25 to 40-years-old,” he says. “People at that age aren’t as likely to have mortgage commitments. Lots of computing firms, for example, are run by young, well-educated people with no personal commitments who know that they can fall back on mum and dad.”
“Once you get into your 50s and 60s, your passion and exuberance is dampened. You don’t have that youthful drive. I think that the idea that baby boomers are keen to start a business when they retire isn’t as big as people think it is.”
Government help is also important, Salt adds: “Government may look at breaking down red tape and create incubators and facilities in these growth areas. Libraries should be more than just that, they should be community support centres where one-man bands can go for their computing and photocopying.”