Most Australian Small Business Owners Earn Less Than Employees, New Report Reveals

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New data released by the Australian Small Business Ombudsman has revealed a concerning trend among small business owners, with the majority earning less than their employees.

The findings in the Small Business Matters report highlight sector challenges, with 43% of small businesses reporting zero profits (worst since 2012). Despite longer hours, about 75% of small business owners earn less than average Australians, raising concerns about sustainability and talent attraction.

Phillip Di Bella, a seasoned figure in the hospitality industry and owner of the Coffee Commune, a pioneering coffee industry network, voiced his concern. 

“This is the first time I’ve seen everything go up at once — interest rates, utilities, gas, wages, insurance, everything’s gone up,” Mr Di Bella said.

Among the regulatory hurdles highlighted is the limitation on work hours for visa holders, which has recently been tightened, hampering the availability of skilled workers. Cafe owner Chewie Choo reported that the new restrictions had compelled him to cut back hours for capable baristas, further straining the industry’s labor force.

The report also delves into the larger picture of the Australian small business landscape, revealing that 98 percent of businesses fall into the small business category, contributing significantly to the economy.

Small Business Ombudsman Bruce Billson urged fostering new entrepreneurs, emphasising the need to understand why younger Australians are less drawn to small business ownership.

“We need to replenish and nurture the next generation of entrepreneurs,” Mr Billson said. “We need to understand why it is not as appealing as it may be for younger Australians to own a small business.”

In response, Australian Small Business Minister Julie Collins emphasised the government’s dedication to assisting small businesses with tailored support packages encompassing energy efficiency, cash flow, and cybersecurity resilience enhancements.

As the nation navigates these challenges, empowering small businesses to thrive remains a central focus.

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