The Perth suburbs where small businesses are struggling (and where they thrive in WA)

Small businesses set up in regional Western Australia are more likely to survive past their first year, a study has found, while those in Perth – particularly in the north-east and south-west of the city – are the least likely to make it.

Business coaching service Brainiact analysed data from the Australian Bureau of Statistics and found the small town of Gnowangerup, in the Great Southern region, had the highest percentage of businesses succeeding past their first year in WA, and the third-highest rate nationally.

Kayla Groves set up her small business, Little Groves Cafe and Wares, in the small town after selling baby and children’s clothes for two years online.

“I couldn’t justify sitting there all day for a few sales so decided to pair it with a cafe, which we didn’t have in town,” she said.

“I think country people understand the importance of supporting our local small businesses. We employ local people, we live in the town, we shop local, it all comes around in circles.

“[We] know the value in supporting small local businesses because without that support, the doors close. We are also on main road to the Stirling Ranges and along the Horsepower Highway which brings consistent passing traffic.”

The Brainiact report stated that tourism was a big economic driver for regional towns – one key reason why small businesses thrived in remote areas.

But it was the state’s Wheatbelt with the overall number of businesses that had the highest survival rate – 82.2 per cent. They likely benefited from lower operational costs, close community networks and fewer competitors, bolstering their ability to endure market shifts.

Brainiact founder and business coach Jared Dawson said the region’s success could also be attributed to its strong agricultural, forestry and tourism industries.

He said this mirrored data collected nationally, which showed agriculture to be the second-best industry to support new business survival.

By comparison, Perth’s north-east and south-west suburbs faced the lowest survival rates, linked to factors such as high competition, rising operational costs, and limited local consumer spending.

“These areas are also home to industries like retail trade, construction, and transport, postal and warehousing, which are statistically more prone to high failure rates for new businesses,” Dawson said.

Erin Follington is a small business owner based in Spearwood – an area that falls towards the bottom of the survival ranking. She runs Natural Pet Supplements from home and sells her products mostly online.

“Being a WA-based business can definitely turn off eastern states buyers. They assume it will take two weeks for their supplements to arrive and that is a long time, when you have a dog that is itching all night or coughing,” she said.

“But locals love WA-made products, as there aren’t many. I find WA customers very loyal, and they spread word of mouth more than other states.”

According to the ABS, out of the 365,000 small businesses launched in the 2021 financial year across the country, only 74 per cent made it through their first year.

Now, three years later, the Brainiact report claims just half of those businesses remain standing.

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