The document discusses business volatility in Australia, highlighting that over 2 million businesses operated as of June 2015, with notable entry and exit rates. It defines business volatility as the sum of entry and exit rates, emphasizes its impact on trading conditions, and suggests strategies for customer retention and acquisition in volatile markets. The Aptico project reviewed 496 industries to calculate business volatility indices and published individual industry reports available for free download.

1. BUSINESS VOLATILITY
What is business volatility and how it can impact your business

2. SNAP SHOT OF BUSINESSES OPERATING IN AUSTRALIA
• By June 2015 there were over 2 million businesses
operating in Australia, across 490+ industries.
• In the 12 months leading up to June 2015, over 260,000
business exited the Australian economy, an exit rate of
12.4%.
• In the same time frame, by June 2015 over 280,000
businesses entered the economy, an entry rate of 13.4%.
The economy as a whole and the industries that comprise
them are constantly changing.
Source: Australian Bureau of Statistics, 2014, Counts of Australian Businesses, including Entries and Exits, Jun 2010 to Jun 2014, Businesses by Main State by Industry Class by
Employment Size Ranges, access by 12/04/16, http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/8165.0Jun%202010%20to%20Jun%202014?OpenDocument.

3. BUSINESS ENTRIES & EXITS BY NUMBER OF EMPLOYEES
0 2 4 6 8 10 12 14 16
0
1-4
5-19
20-199
200+
%
Source: Australian Bureau of Statistics, 2014, Counts of Australian Businesses, including Entries and Exits, Jun 2010 to Jun 2014, Summary of Findings access by 12/04/16,
http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8165.0Main+Features1Jun%202011%20to%20Jun%202015?OpenDocument
Entry Rate
Exit Rate

4. WHAT IS BUSINESS VOLATILITY?
Business Volatility is calculated by adding the business entry
rate to the business exit rate of an industry over the course
of one year. A volatile industry may have many entries (start-
ups) and/or exits (business failures, selling a business or
merger/acquisitions). In either case, high levels of entries
and exits may create uncertain or volatile trading conditions
for an operating business within that industry.
“
“
BUSINESS VOLATILITY = BUSINESS ENTRY RATE + BUSINESS EXIT RATE

5. VISUALISING BUSINESS VOLATILITY
BUSINESS IN 2014 BUSINESS IN 2015
In 2014, the total
number of trading
businesses within an
industry
Businesses
that exited
the industry
by 2015
New
businesses
entering the
industry by
2015

6. VISUALISING BUSINESS VOLATILITY
BUSINESS IN 2015 VOLATILITY AS A PERCENTAGE
Business
Volatility
expressed as -
business entries
plus exits as a
percentage of
all businesses
within an
industry
Example If the Business Entry Rate = 20% & the Business Exit Rate = 20%.
Then the Business Volatility Index of the industry is 40 points.

7. HOW BUSINESS VOLATILITY IMPACTS YOUR BUSINESS?
• Business entries to an industry need customers. Entries can
steal your current customers, or customers new to the
market.
Action: Engage in activities to protect market share.
• Business exits (failures) can no longer serve their customers.
Customers will seek out new providers.
Action: Engage in activities to acquire customers.
 Customer retention & growth strategies
 Customer acquisition strategies

8. BUSINESS VOLATILITY: SALES & MARKETING INVESTMENTS
 Sales and marketing work in concert to acquire, grow
and retain customers.
 As volatility increases, investments in sales and
marketing can help retain your current customers and
attract new customers.
 The net result of sales and marketing investments helps
counter and capitalise on volatile market conditions.

9. THE APTICO BUSINESS VOLATILITY PROJECT
• The project undertaken reviewed 496 industries covering 2
million businesses across Australia, using data published by the
Australian Bureau of Statistics as of March 2016.
• The completion of the project saw 496 individual industry reports
published on the project URL, as of April 2016.
• Each report calculates the Business Volatility Index for each
industry, its movement from last year and the number of trading
businesses within that industry stratified by number of
employees.
All reports are free to download from the Aptico website. To access visit
http://aptico.com.au/industry-reports/business-volatility

10. NEED ASSISTANCE?
Aptico can help
Aptico specialises in helping small to
medium sized business become more
stable in the face of volatile market
conditions. If you are invested in your
business, and are looking to optimise
those investments, Aptico can help.
For a no obligation free consultation,
call today on:
07 3040 7306
or via email
info@aptico.com.au