There’s nothing less satisfying than a great idea that stays locked inside your skull.
So, if you’re on the path to realising your startup dream, you’ll need to light the way ahead and beware of the factors that play into success.
As Reckon CEO Sam Allert says,
“Starting a business anywhere in Australia is a serious undertaking, but certainly an achievable one in such a prosperous country with excellent infrastructure. It’s when a confluence of negative factors overlap that you find a taller barrier to entry. What startups need to look for is a perfect storm of positive business conditions to give them a running start.“
Some of these factors may be obvious, like capital, good employees, market potential etc. But some are not so apparent…
Let’s uncover some research findings into Australia’s startup scene, based on our unique research.
Reckon’s research into startups in Australia
To get to the bottom of various factors that increase or decrease chances of startup success, we conducted wide ranging research into Australia’s business landscape across 50 of our major cities.
The full scope of the survey interrogated Australia’s best (and worst) cities to launch a startup in Australia, based on a range of factors. For the purposes of this article, we’ll be looking at those determining factors.
Your location is paramount
Where you decide to setup shop matters – it really does.
The research we conducted revolved around not just geography but also what the specific conditions were in that location which would influence how easy (or difficult it is) to achieve success.
The results may be surprising – Would you have guessed that out of 50 cities Geelong came in first followed by Toowoomba?
- To explore Australian cities further, we’ll be diving into the best and worst places to start a business here.
For the purposes of this article though, we want to explore WHY certain locations are better or worse – this means looking at the characteristics certain places have that make it better or worse. So, If you’re looking to setup a new business, heed these determining factors.
Excellent internet speeds
One of the key factors for startup success in 2024 is certainly internet speed. This is especially true when it comes to the modern age of remote working and eCommerce.
Placing your business in the heart of a CBD is no longer as advantageous as it used to be, as good work can be done wherever there’s a solid connection.
When looking at locations in terms of the internet, interrogate:
- download speed
- upload speed
- latency
If your services are predicated on solid internet stability, choosing a dud location could sink you before you start. The opposite is equally true.
Looking at our research, for example we found that Victoria ranked the highest in terms of internet connectivity, with cities like Geelong, Ballarat, Melbourne, Shepparton and Warrnambool great places to look at for solid connections. NSW isn’t too bad either.
On the other hand, the Northern Territory came in last for internet reliability and speed.
The available talent pool
You will of course need available talent to get your business off the ground unless you plan on going solo forever.
Being able to access educated people is crucial to success. However, it’s not just about ‘talent’ it’s also about:
- education level
- availability of young workers
- unemployment rate
- median income
- proportion of population in labour force
- long term health
All of these elements determine how much you’ll need to pay workers or services and how available people are to work.
What we found here is not greatly surprising – generally speaking, the bigger the city, the better the talent pool. Capital cities scored well here, but larger regional towns are also very attractive, like Alice Springs and Mackay.
Business landscape
The business landscape is another important consideration when deciding where to set up shop. While a rather slippery term, what we’re looking at here are metrics like:
- business density
- short term survival rate
- long term survival rate
This speaks to how well other businesses have survived in a particular location and how many other businesses are around that you can rely on for your own required services.
After all, if other businesses fail in a city at a high rate, and there aren’t many businesses around to service you – it may be a dud spot.
In this category we see a lot of mid-population capital cities do well such as Adelaide, Perth and Hobart, while cities like Alice Springs, Wagga Wagga and Tamworth were at the bottom of the scale.
Cost of living
Cost of living is a major factor determining how much money you’ll bleed just existing as a business, and as a citizen. The more you spend on overheads, the less you have to spend on growth.
When we talk about cost of living, this involves a few indicators like:
- weekly rent
- monthly mortgage
- commute cost
- childcare cost
When the various permutations of ‘cost of living’ are excessive, you’re going to haemorrhage cash at ahigh rate. Obviously if costs are low, you have more to funnel into your venture, and your quality of life.
As Sam Allert summarised of the findings of our startup survey,
“These results, many of which may be surprising for aspiring business owners and entrepreneurs, speak to the importance of a low cost of living, good internet, and short commutes. When these factors are distinctly lacking, the ability of a fledgling business to prosper becomes diminished. If I were building out a new business idea, I’d be concentrating on a stable geographical basis of solid business infrastructure and lower living costs.”
