The beginning of the year has brought challenges for Australia’s 1.5 million sole traders, as more than a third (38%) have seen a decrease in revenue, marking the sole financial quarter to show such a decline in the past two years.
According to the latest Hnry Sole Trader Pulse, the sole nationwide survey of self-employed individuals in Australia, encompassing consultants, freelancers, contract tradies, and healthcare workers, the drop in revenue has surpassed growth (37%) for the first time since the onset of the pandemic. This marks a departure from the previous two years, during which sole traders consistently witnessed an improvement in turnover rather than a downturn.
Feeling the increasing pinch of inflation and rising costs, only 56% of sole traders in March 2024 feel secure in their jobs, falling from 61% in October last year.* This comes as one in five (19%) are looking to give up independent earning to work for someone else, with 48% of this group looking to improve their earnings and 47% seeking greater stability.
Karan Anand, Managing Director of Hnry Australia, said: “With 50,000 new sole traders expected to enter the sector this year, this group is an essential subsection of our workforce that signals the broader health of the economy. Our data shows us they’re doing it tough and feeling the lasting impact of inflation and back-to-back interest rate rises.
“The good news is that as economic pressures promise to ease, overall sole trader optimism, whilst modest, is on the rise – with 35% feeling positive about the health of the economy in six months’ time, a jump from 23% in October 2023, and the highest since March 2022.”
However, not all sole traders are bearing the brunt equally. Understandably those that are new to sole trading are struggling to find their feet in a tough economic climate, with over half (52%) of sole trader businesses under two years old reporting falling revenue, in contrast to 30% of those aged 3-10 years, and 39% aged over 11 years.
This data corresponds with independent earners aged under 34 feeling more impacted by stagnating turnover (49%) when compared with their 35-54 year old (38%) and 55+ year old (34%) counterparts.
Some industries are also faring worse than others – less than half (46%) of freelance creatives including designers, photographers and marketing consultants, feel positive about their financial security. This comes despite the government’s multi-million dollar investment into the creative sector last year, with many businesses continuing to tighten the purse strings and take creative work in-house that would have previously been outsourced.**
By comparison, health and wellness professionals are feeling the most secure (67%), followed by consultants (64%) and contract tradies (63%). Where 42% of self-employed creatives have seen their income fall, only 28% of wellness workers reported the same, as consumers prioritise spending on self-care and wellbeing in 2024.
Mr Anand continued: “Despite experiencing a challenging start to the year, the majority of sole traders are still continuing to reap the rewards of being their own boss. Positive feelings around work-life balance (65%) and wellbeing (58%) have remained unchanged since last October, while job satisfaction has improved from 62% to 66% – signalling the greater freedom and flexibility of self-employment continues to pay personal dividends.”
The data also reveals that tax and financial admin continues to be a significant drain on productivity, robbing the average sole trader of an hour per day, while a day per week is lost to tracking business expenses alone.
“An empowered workforce is a productive one. Ensuring that sole traders have the tools and resources they need to build thriving businesses is vital not only for the sector’s longevity – but for the nation’s economic success,” Mr Anand concluded.
The Hnry Sole Trader Pulse is Australia’s only regular, comprehensive snapshot of the sentiment of self-employed people in Australia. For more information, visithnry.com.au/au/soletraderpulse.
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