Measures that matter: a review of performance measurement in small service businesses

Australian small business (SB) represents 96% of all private sector business, employs almost 3.3 million people and enjoys an average growth rate of 3.5 percent. The Service Sector (SS) has enjoyed a rapid growth rate due to the evolution of the global economy and information technology, as well as the shift from production to market orientation; it is the largest component of the Australian economy in terms of the numbers businesses, employment and gross value added. Small firms are found in abundance within this sector. This therefore indicates that the Australian economy is heavily dependent upon the health and vitality of the small firm; it is critical to measure SB performance. Despite this contribution, the small business sector, and in particular the service sector component, appear to be under-represented in the development of specific performance measurement models, which, within the academic and professional literature appear to focus on their larger firm counterparts. Given the unique position of small business service organisations the above suggests a critical need for the design and development of an industry specific performance model suitable for this sector. This paper has been produced during the research project and reflects theory and research extracts from the literature review and the methodological approach to develop such a model.