The latest Hnry Sole Trader Pulse reports revenue decline has outweighed growth (37 percent) for the first time since the pandemic. This bucks a two-year trend in which sole traders have consistently seen their turnover improve rather than worsen.
The start of the year has proved rocky for Australia’s 1.5 million sole traders, with over a third (38 per cent) experiencing a decline in revenue – the only financial quarter to record this in the last two years.
Feeling the increasing pinch of inflation and rising costs, only 56 per cent of sole traders in March 2024 feel secure in their jobs, falling from 61 per cent in October last year.
“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,” said Karan Anand, managing director of Hnry Australia.
“The good news is that as economic pressures promise to ease, overall sole trader optimism, whilst modest, is on the rise – with 35 per cent feeling positive about the health of the economy in six months’ time, a jump from 23 per cent in October 2023, and the highest since March 2022”.
However, not all sole traders are bearing the brunt equally. Understandably, those who are new to sole trading are struggling to find their feet in a tough economic climate. Over half (52 per cent) of sole trader businesses under two years old report falling revenue, in contrast to 30 per cent of those aged 3-10 years and 39 per cent aged over 11 years.
This data corresponds with independent earners aged under 34 feeling more impacted by stagnating turnover (49 per cent) than their 35-54 year old (38 per cent) and 55+ year old (34 per cent) counterparts.
Some industries are also faring worse than others – less than half (46 per cent) 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 per cent), followed by consultants (64 per cent) and contract tradies (63 per cent). Where 42 per cent of self-employed creatives have seen their income fall, only 28 per cent of wellness workers reported the same, as consumers prioritise spending on self-care and wellbeing in 2024.
“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 per cent) and wellbeing (58 per cent) have remained unchanged since last October, while job satisfaction has improved from 62 per cent to 66 per cent – signalling the greater freedom and flexibility of self-employment continues to pay personal dividends,” said Anand.
The data also reveals that tax and financial admin continue to significantly drain productivity, robbing the average sole trader of an hour per day and a day per week from 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,” Anand said.
