According to the Xero Boss Insights 2020 report, Australia is a nation with an unrelenting entrepreneurial spirit, with one out of every six workers now a business owner.
Since 1991, the number of business owners in Australia has spiked by 700,000 to 2.2 million, including more than 1.4 million sole traders and more than 600,000 micro business owners employing up to four staff.
Looking at the figures more closely, Xero revealed that businesses with female founders are on the rise.
Women-run business on the rise
While men still outnumber women in business ownership across the board, two-thirds of net new businesses created in Australia in the past decade were founded by women.
Women are leading the charge for business ownership in sectors including healthcare (59 per cent) and education and training (58 per cent). On the other hand, men are most likely to own and operate a business in construction (91 per cent), transport (85 per cent) and mining (84 per cent).
The data also identifies the peak age for business ownership as 45 years old, with almost 46,000 Aussies in their mid-40s 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 empty-nesters representing 43,000 owners who have taken the leap and started a business.
The research also highlights the nationalities driving entrepreneurialism in Australia.
Australia-born residents and migrants are equally as likely to run their own business. Almost 15 per cent of migrant workers are their own boss, which is slightly higher than Australia-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 in the ranking for business ownership by country of birth.
“Australians have always had an entrepreneurial mindset, from the days of the corner milk bar to a farmer supporting their local community. What’s clear from the research is that Australians from all walks of life have the drive to start their own business. It also reinforces the big role small business plays in ensuring the health of our nation’s economy,” said Trent Innes, managing director, Xero Australia and Asia.
“To maintain Australia’s average rate of employment, it is estimated the economy will need to create at least 5 million new jobs over the next 10 years — and these won’t all come from large businesses.”
The Xero research revealed that some of Australia’s regional communities are fertile grounds for small business to flourish, particularly areas by the beach or in-land elevated by tourism and agriculture.
Flinders in Victoria is Australia’s most entrepreneurial hotspot, 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).
Xero did, however, note differences in the types of work business owners do in metro areas and regional communities, with businesses in metro cities more likely to run professional services firms, 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.
While the report does not contain data analysing the impact of the recent bushfires, it shows that in the past, businesses in regional communities emerged as the most resilient, with almost half (46 per cent) of those formed in 2015 surviving through to 2018.
The business survival rate peaks much higher in some regional towns, with a 66 per cent survival rate in the Barossa Valley and Yorke Peninsula in South Australia.
“What the report shows us is that across many years, small businesses have been the lifeblood of the country. Small businesses, often family owned and run, are at the heart of regional communities,” Mr Innes said.
"They have been the friendly faces behind the grocery story, the café, the newsagency and many other local institutions for years. Based on past experience, we can hope that people will come together to help those affected to rebuild and recover.”