Xero’s ‘Boss Insights 2021’ report reveals Australian sole traders lead charge in creating new businesses amidst pandemic
- Written by Business Daily Media
The Australian economy saw the addition of 55,900 sole trader businesses in the year to June 30 2020, ABS data shows
Melbourne — 19 April, 2021 — Australia’s entrepreneurial spirit continues to shine bright despite one of the toughest years the nation has faced, with 47,000 net new businesses being added to the local economy in the year to June 30 2020, according to a new research report by global small business platform, Xero.
Released today, the Xero Boss Insights 2021 report provides an in-depth analysis of Australian Bureau of Statistics (ABS) data from 2020 to 2021 and was authored by Bernard Salt and compiled by The Demographics Group. The report covers the most recent ABS data available providing a detailed snapshot of business creation in Australia.
The report found that in June 2020 there were 2.4 million small businesses in Australia, of which 1.5 million were sole traders. As small businesses across the country adapted and trimmed down, the pandemic acted as a catalyst for some Aussies to go out on their own and start a business. In the year to June 2020, there were 55,900 new sole trader businesses, slightly more than the year prior. Today, there is a ratio of one business entity for every 11 Australians.
The rise of the self-employed
New sole trader businesses opted for central business districts (CBDs) and the edges of major cities as the preferred locations for operating. The industries in which the self-employed flourished spanned a diverse mix, with transport, professional services, construction and healthcare seeing the most growth in sole trader businesses.
Trent Innes, Managing Director Australia and Asia, Xero, said the report spotlighted the role of sole traders in fueling new business creation and signalled the perseverance of the Australian small business community over the past year.
“Despite the challenges that 2020 brought, Xero’s Boss Insights 2021 report shows Australia has yet again proven to be an overwhelmingly resilient nation. And while many businesses had no choice but to adapt during lockdowns, a host of newly self-employed Aussies were prompted to take the leap and bring their business ownership dreams to life. While the ripple effects will still be felt for some time, it takes more than a pandemic to dampen our entrepreneurial spirit,” said Innes.
Bernard Salt, demographer and Boss Insights report author, said Australian entrepreneurs have responded to the pandemic with resilience and agility.
“Some small business owners appear to have scaled back operations to sole trader status, perhaps to wait out the pandemic before springing back into life. In some ways the report showcases the irrepressible optimism and determination of Australia’s small business sector, and especially of sole traders,” Salt said.
Melbourne stands strong after first lockdown
Melbourne’s businesses bounced back after emerging from the first lockdown, pointing to the resilience of the city. In the year to June 2020, Melbourne added the most net new businesses compared to any other city, up by 17,406 to 515,721 total businesses.
The industries putting Melbourne at the forefront of new business creation in early 2020 were telling of the year the city experienced. Transport, postal and warehousing added 4,427 new businesses as ecommerce skyrocketed. With additional time at home, more Melburnians used the opportunity to spruce up their houses, helping to add 2,074 businesses to construction. Administrative support services also added 1,544 businesses.
The industries that flourished in Melbourne were equally as successful across the country. The transport, postal and warehousing industry surged nationally, adding 67,000 new businesses, and the construction industry also grew, with 37,000 new businesses added. This was closely followed by the professional services industry (+ 35,000), financial services (+26,000) and healthcare (+ 24,000), showing the pandemic has paved avenues for Aussies in these industries to start a business.
Australia’s regional towns: Prime launchpads for small business
While the CBD has long been the pinnacle of business activity, it’s no longer the only place to make it in business. The Xero Boss Insights 2021 report identifies 16 towns across the nation, each with its own uniqueness and strengths, as prime places to start a business – whether you’re an aspiring tradie, an agriculturist, or a real estate agent.
Winners and losers of the pandemic on the jobs front
With casual workers bearing the brunt of the pandemic, job losses between February 2020 and February 2021 have been concentrated across four categories: hospitality (especially cafes), retail shops, personal services and travel.
But there are green shoots and signs of recovery, with a number of job opportunities helping to get Aussies back into the workforce. With many businesses flocking to online channels amid the lockdown, jobs that supported this drive to digitisation like multimedia and web developers (292%), and software and app programmers (17%) were surging. Australia is also seemingly returning to its agricultural roots, with agriculture plant operator jobs up by 84% and agriculture and crop farmer roles rising by 54% – spurred on by a need for local production.
“Our Boss Insights 2021 report has shone a light on the green shoots and pockets of opportunity for Australians looking to enter the small business sector. Whether you’re looking to freelance as a web designer or hoping to start a business in warehousing, the report offers helpful insights for aspiring entrepreneurs. It also offers a view on where the jobs are,” concluded Innes.
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To read the Xero Boss Insights 2021 report, please visit this link.
About Xero
Xero is a cloud-based accounting software platform for small businesses with 2.45 million subscribers globally. Through Xero, small business owners and their advisors have access to real-time financial data any time, anywhere and on any device. Xero offers an ecosystem of over 800 third-party apps and 200 plus connections to banks and other financial partners. In 2020 and 2021, Xero was included in the Bloomberg Gender-Equality Index and in 2020, Xero was recognised by IDC MarketScape as a leader in its worldwide SaaS and cloud-enabled small business finance and accounting applications vendor assessment.
About Xero’s Boss Insights 2021 report
Xero commissioned the Xero Boss Insights 2021 report to uncover the effects of the coronavirus pandemic on Australian business as at 30 June 2020, four months after the first wave of lockdowns. The Demographics Group assisted with this project by researching and writing the report. The data is sourced from the Australian Bureau of Statistics (ABS) Business Count data. The data, tables, mapping and insights illustrate and confirm the relentless entrepreneurship of the Australian people.
