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One in six Australian workers now own their own business, with regional and female founders leading the entrepreneurial charge, a new study has found.
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Australia’s a nation of bosses: Xero
26 February 2020
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Xero’s latest report has found that there were 2.2 million business owners in Australia in late 2019, a spike of 700,000 since 1991.
More than 1.4 million businesses are sole traders, and more than 600,000 are micro businesses with up to four staff.
The Xero Boss Insights 2020 report also found that two-thirds of new businesses created in Australia in the past decade were founded by women, taking the lead over men in the healthcare and education and training sectors.
While big businesses like professional services tend to thrive in metropolitan areas, the report found Australian regional communities are “fertile grounds” for SMEs to grow.
According to the report, around a third of residents in regional areas own a business, with Flinders in Victoria having the highest rate of business ownership at 38 per cent.
Businesses like agriculture, forestry and fishing provide the most business opportunity for regional areas, but SMEs catering to tourists have also been found to do well thanks to a “sea change and tree change” effect.
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The report does not contain data on the effects of the recent bushfires, but it shows SMEs in regional communities have higher rates of survival.
The managing director of Xero Australia and Asia, Trent Innes, said the report highlights the entrepreneurial spirit of the nation.
“While the data featured in the report precedes the devastating bushfires that have impacted many regions, it gives valuable long-term insights into not only the central role small businesses play in the social and economic fabric of our country, but also their resilience and ability to adapt,” Mr Innes said.
Between 2015 and 2018, the business survival rate of SMEs in regional Australia was 46 per cent.
This survival rate peaked in some areas, with regions like the Barossa Valley and the Yorke Peninsula in South Australia showing a business survival rate of 66 per cent.
“What’s clear from the research is that Australians from all walks of life have the drive to start their own business,” Mr Innes said.
“It also 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.”
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