What is the growth potential of Australia's businesses?

Companies will live and die depending on their growth. Having an established product, service or offering is one thing, but continually pushing forward is something that requires more than a sound strategic plan.

For example, economic conditions play a huge role. In Australia, the growth potential for both new and existing businesses is something that's consistently changing. While there are many factors that

go into assessing the room that each company has for expansion, it's important that business owners know what they're getting themselves into.

This is even more pronounced if you're thinking of starting your own small business. The success of the endeavour will hinge on how it progresses over time. So, how can Australian companies consistently assess their growth potential?

A long, winding road

"The transition in growth is not perfectly smooth, but our economy has, in my judgement, coped remarkably well through a lengthy period of very large shocks in a difficult world," explained Glenn Stevens, Governor of the Reserve Bank of Australia (RBA).

Naturally, much of the growth Mr Stevens referred to is driven by the country's businesses. The best way to assess their potential for expansion in real terms then, is to look at how the country has performed economically.

Business Spectator contributor Callam Pickering surmised that the majority of estimates put Australia's year-on-year economic growth at a figure around 3 – 3.5 per cent. However, this is a slight overestimation.

Mr Pickering explained that the country's average annual growth rate actually stands at the 2.8 per cent mark, while gross domestic product increases hover at 1.1 per cent.

These figures may not seem significant, but they should be considered by well-established and startup businesses alike. For example, those who are seeking the applicable tax and accounting services will need to keep their providers informed of their expansion plans, and create relationships that help them achieve objectives.

Taxation and business growth

One of the stumbling blocks in the way of sustained business growth is the current taxation system, according to research collated by Business Council of Australia. 

"The federal government should seize the momentum on tax reform to put forward a comprehensive package that brings the whole community along and delivers a tax system that works for all Australians," explained Business Council of Australia Chief Executive Jennifer Westacott.

Tax accounting in how businesses can plan for growth, especially if the current system is reformed. Keeping a handle on outgoings – whether they be legal requirements or otherwise – is the first step in identifying expansion potential.

While the conditions in Australia are often variable, the country's businesses will need to help themselves if they're to truly expand and flourish going forward.