Sole traders and micro-businesses: Australia’s growing army

Sole traders are the managing directors of their own enterprise. Picture: Luke Bowden

There is a little-known yet substantial life form circulating throughout the Australian continent, an organism that manages to eke out a living even in these harshest of times. It is the sole trader, that hardy individual who operates a business without employees. I’m thinking of farmers, shopkeepers, business consultants and contractors, tradies, handymen and cleaners.

Seemingly against the odds, they’ve been growing in number. Just prior to the coming of the coronavirus, the Australian workforce topped 13m, a number that included 1.5m sole traders. In recent years Australia’s sole trader population has increased by as much as 55,000 in a single year. That’s a thousand people every week launching themselves into the great unknown with little more than the dream of being in business for themselves. Great in good times. A bit of a worry when the economy goes awry. But these numbers tell a compelling story about the Australian people and their quiet determination.

Add in 611,000 micro-businesses employing one to four workers and you have 2.1m enterprises comprising more than three million owners and workers. Sole traders and micro-business owners are among those Australians who live closest to the edge of economic survival. Every day they see the effects of the rise and fall of customer orders, of prospects appearing and receding, of regulations imposed and even (occasionally) withdrawn. Every day – at family get-togethers, in church, at night – they mull over the direct connection between trade, the bank balance and quality of life. I think the number of sole traders and micro-business workers says something about the Australian people: that we are mightily individualistic and very much focused on the pursuit of lifestyle.

Sure, there are big businesses in Australia, but not many. Official publications place the number of businesses employing 200-plus workers at less than 4000. By my reckoning there are as many Australians working as sole traders and in small business as there are in big business. But working for someone else, even in a small business, carries its own set of concerns: the feeling that at any time you could be told your services are no longer required.

There was the distinct possibility that the number of sole traders and micro-business owners would fall during Covid. But the Australian Bureau of Statistics estimates that the number of workers who defined their job as “managing director” jumped by 39 per cent between February and August, up from a 10 per cent growth over the same period the previous year. Sole traders are the managing directors of their own enterprise.

I think the pandemic is prompting big and medium businesses to streamline workforces, enabling and inspiring – or forcing – some workers to set up their own businesses, many of them streaming out of capital cities and setting up shop (or consulting services) in seachange or treechange towns.

There is no doubt that the coronavirus has constrained, if not killed off, many micro- businesses and sole trader enterprises. But the recent surge in “managing directors” has me thinking that perhaps buried deep within the psyche of all Australians there lies a yearning to work for oneself. Maybe one outcome of this pandemic will be a workforce that is even more determined to retain control over its destiny. And when you think about it, that idea really does connect with Australia’s core individualistic values.

In my Nov 7-8 column I stated that Vegemite was no longer Australian-owned. This is incorrect; the brand was purchased by Bega Cheese in 2017. My apologies.