Business owners earn below average wage

Three-quarters of small business owners take home less than the full time wage, with the value of the sector growing by 15 per cent last financial year to $506 billion.

Bruce Billson, Australian Small Business and Family Enterprise ombudsman.

Three-quarters of small business owners take home less than the average wage, according to ombudsman Bruce Billson.

A report released on Monday showed the value of the sector increased by 15 per cent last financial year to $506bn, with small businesses employing 5.1 million Australians, including 43 per cent of all apprentices.

The average small business owner is a 50-year-old man who earns below the $90,000 average full-time wage, according to the report released by the Australian Small Business and Family Enterprise Ombudsman.

But women now account for 35 per cent of small business owners, nearly double the rate from the 1970s.

About 98 per cent of Australian businesses have a turnover of below $10m, with 93 per cent below $2m.

Mr Billson said 43 per cent of small businesses failed to make a profit in the year to June 2022, while 75 per cent of owners earnt less than the average wage.

“It can be a hard slog and not always be as rewarding as ­people might hope,” Mr Billson said.

“Yet, the spirit that drives people to run a small business also makes them great advocates for and contributors to their community, and they are more likely than the general population to volunteer for an organisation or group.”

Small Business Owners' Weekly Earnings 2020-21

Mr Billson said he was concerned the average age of small business owners was climbing, with just 8 per cent being under 30 years of age.

Nearly half of small business owners are older than 50 while 22 per cent are older than 60.

“We need to replenish and nurture the next generation of entrepreneurs, value self-employment and encourage and enable smaller enterprises and the livelihoods they make possible,” Mr Billson said.

“We need to understand why it is not as appealing as it perhaps should be for younger Australians to own a small business.”

Just 1 per cent of small business owners identify as an Indigenous Australian, while a third of small businesses are owned by migrants.

While 60 per cent of small business owners were self-­employed, Mr Billson said it would be “wrong to miscast these people as vulnerable gig economy workers”.

“The flexibility of self-employment was a particularly attractive livelihood option for women and older people,” he said.

Small Business Minister Julie Collins said the small business sector was a “vital” part of “our nation’s economy and our prosperity”.

That’s why the Albanese ­government is delivering new practical measures to support Australian small businesses and to help them prosper,” Ms Collins said.

“We’re making it easier for small businesses to invest and grow by providing $290m in cash flow support through the $20,000 instant asset write-off.

“We are also introducing a new Small Business Energy Incentive, providing $310m in tax relief for up to 3.8m businesses.

“This will encourage investments supporting electrification and more efficient use of energy, helping small businesses save on their energy bills.”