Two-thirds of net Australian businesses created in the past decade were founded by women, according to a new Xero report.
The Xero Boss Insights 2020 report released today provides an analysis of ABS data from 1991 to 2019 and showed men are still outnumbering women in business ownership across the board, but the gap is now closing.
Women are leading the charge for business ownership in healthcare (59 per cent) and education and training (58 per cent). However, men are most likely to own and operate a business in construction (91 per cent), transport (85 per cent) and mining (84 per cent).
Trent Innes, Managing Director, Xero Australia and Asia said the report was the first of its kind.
“The Xero Boss Insights 2020 report for the first time shines a light on the entrepreneurial spirit of the nation. It provides a roadmap for anyone who has been thinking of striking out on their own, and showcases who the nation’s business owners are, where they are based and what they do.”
He said the report reinforces the big role small business plays in ensuring the health of our nation’s economy.
“To maintain Australia’s average rate of employment, it is estimated the economy will need to create at least five million new jobs over the next 10 years – and these won’t all come from large businesses,” he said.
The insights report showed one of every six workers in Australia is a business owner. In late 2019, there were 2.2 million business owners in Australia, a spike of 700,000 since 1991.
The majority of these businesses are small, including more than 1.4 million sole traders and more than 600,000 micro-business owners employing up to four staff.
The report showed the peak age for business ownership as 45-years-old, with almost 46,000 Aussies in their mid-forties working as their own boss, having developed the skills, resources and contacts to build a business.
Business ownership peaks again in the mid-50s with 43,000 owners in that age group who have taken the leap and started a business.
The report revealed Australians in their 30s as less entrepreneurial than they were in 2006.
However, the Xero study noted unlocking this generation to be their own boss, with dedicated start-up grants and support resources, could activate more than 50,000 new businesses to boost Australia’s economy.
The research also highlights the nationalities driving entrepreneurialism in Australia.
Australian-born residents and migrants are equally likely to run their own business. Almost 15 per cent of migrant workers are their own boss, which is slightly higher than Australian-born residents at 14.3 per cent.
The migrants driving entrepreneurialism hail largely from the Middle East, with Lebanon, Israel and Cyprus among the top five rankings for business ownership by country of birth.
While metro cities are key for big business, some of Australia’s regional communities are fertile grounds for small business to flourish.
While 15 per cent of the Australian workforce own a business, this peaks significantly in regional towns at about one-third of residents. Flinders in Victoria is Australia’s most entrepreneurial hot spot, with 38 per cent of residents owning their own business. Following closely behind are Bangalow in New South Wales (37 per cent) and Kulin in Western Australia (37 per cent).
There is a difference between the work done in metro and regional communities. Business owners in metro cities are more likely to own businesses in professional services, including accounting, law and IT.
Construction businesses are more likely to be founded in the outer suburbs of metro cities, while agriculture, forestry and fishing provide the most business opportunities in regional communities.