The number of Australian women operating their own businesses has steadily increased over the past 20 years. Internationally, Australia’s experience is similar to that of the United Kingdom, where in recent years the number of women in self-employment has been increasing at a faster rate than the number of men. There has been a 46 percent increase in the number of women business operators over the past two decades.
Women are starting their own businesses to continue their participation in the workforce and are using their education, skills, and training to develop flexible working models around caring responsibilities. And it is working:
- Women business operators have high levels of life satisfaction (57 percent were pleased or delighted with the quality of their lives, 30 percent mostly satisfied).
- The Household, Income and Labour Dynamics in Australia (HILDA) Survey found across every year of their longitudinal data (2001 to 2011) that self-employed women had higher job satisfaction than all other female workers.
BUSINESSES OWNED AND RUN BY WOMEN ARE A VITAL PART OF THE AUSTRALIAN ECONOMY.
Women-owned businesses represent 34.8 percent of Australian businesses. Not only are they an important aspect of self-employment for women in many micro-businesses (employ 1-4 people), but they are increasingly hiring more workers and driving the longer run development of the Australian economy.
Self-employed women can set the framework for improving and enhancing their economic and financial security. This means that strategies to grow and develop women-owned and run business is not only beneficial for women’s economic security, but it will be part of the approach to boost Australia’s economic growth over the medium term.
Women-owned businesses access only 1 percent of the procurement market globally. Australia’s Indigenous Procurement Policies have created a social and economic impact for our Indigenous communities. Deliberate and specific strategies that support women-owned businesses, will have the benefit of supporting women’s economic security, workplace flexibility, new structures around caring models, and women’s continued workforce participation. According to Financy’s Women Index September quarter 2020, it is currently 32 years for women to achieve economic equality, but it is clear that providing greater support to women-owned businesses will accelerate progress.
SMALL BUSINESSES ARE A LARGE PART OF AUSTRALIA’S ECONOMY AND THE LEAST ASSISTED
Small Business in the Australian Economy Report states that the vast majority (over nine in ten) of Australian businesses are small businesses.
SMALL BUSINESSES ACCOUNT FOR 33 PERCENT OF AUSTRALIA’S GDP
- Employ over 40 percent of Australia’s workforce
- Pay around 12 percent of total company tax revenue
- Only 15 percent of small businesses report receiving any form of government assistance, compared to 30 percent of medium businesses and 57 percent of large businesses.
- Only 3,700 Australian firms employed over 200 people in 2015, meaning that large businesses account for only 0.2 percent of all Australian businesses.
Nurturing the small business sector has been a bipartisan policy aim at the Commonwealth and State government level for many years. Procurement and other policies focusing on women-owned businesses will enhance the growth opportunities for the small business sector.
WOMEN OWNED BUSINESSES ARE DIVERSE
Hard data on women-owned and run businesses is sporadic. The following research draws together those findings and reaches conclusions about policy changes that can enhance the success of women-owned businesses. Some key facts on women-owned and run businesses are presented, along with recommendations to enhance women in business over the medium term.
- More than two in five women business operators were aged 40-54 (44 percent).
- 42 percent of women business operators had a diploma or degree.
- One in two women business operators did voluntary work for an organisation or group (52 percent).
- 47 percent worked from home, which was long before it became normalised during COVID-19. This clearly shows the flexibility of many women-run businesses.
- Almost a third of Australian women business operators were born overseas.
- 0.6 percent were owned by an Aboriginal or Torres Strait Islander.
- 12 percent had a disability compared to 20 percent of Australians having a disability.
- 31 percent lived in regional Australia. 47 percent of women business operators had dependent children living in their household.
As is often the case, the parenting and income-earning roles were able to be combined by women running their own businesses. Women who operated businesses were the most likely employed people to have dependent children.
- 81 percent of women business operators were mothers (of children of any age) compared with 57 percent of women employees.
- 6 percent of women business operators were primary carers of a person with a disability, compared with 4 percent of other employed women, and 1.4 percent of employed men.
PERFORMANCE OF WOMEN-OWNED BUSINESSES
In Australia, a 2003 study using ABS Business Longitudinal Survey data from 1995-96 to 1997-98 (when owner gender was collected) found no significant differences in financial performance and business growth between Australian women’s and men’s businesses. In 2013, women were just as likely as men to have multiple contracts underway.
In 2012, a national research project commissioned by the Australian Women Chamber of Commerce & Industry found that less than 20 percent of Australian women business owners were tendering for local, State, and Federal Government contracts around Australia, but of those that tendered, 60 percent were successful.
The eS4W roundtables held with women-owned businesses and networks in November 2020 demonstrated that collaboration was an opportunity for business growth and that a significant majority of businesses purchased from other women-owned businesses.
Lack of finance was the main reason most women (58 percent) gave for not starting a business when they had been considering doing so.
The round table discussions revealed a number of other issues:
- Many women start their own businesses out of necessity. This arose due to difficulty finding a flexible job as they juggled the caring and income-earning parts of their lives.
- Access to finance was a constraint on starting a business and then again when expansion plans were being made.
- A high proportion of women-run businesses exist in regional and remote areas and they would likely benefit from policies to decentralise the population.
- Financial education and ‘literacy’ were important issues, including paying superannuation to themselves. Many women business owners overlooked superannuation in the challenge of current income and business profitability.
- Introduce Gender Equality Procurement Principles and SME targets as part of Government and Business purchasing to create representative, ethical supply chains
- Introduce Gender Equality Procurement reporting as part of the Workplace Gender Equality Agency annual reporting cycle
- Allow SMEs under 100 employees access to a simplified Workplace Gender Equality Agency (WGEA) reporting mechanism that is voluntary so that data can be captured on how women-owned businesses are creating gender equality and women’s economic security
- Provide greater access to growth opportunities, for example, increasing the number of industries supported by the Federal Government Entrepreneurs Program, and reducing the turnover threshold to participate for women-owned businesses to the same level as rural and Northern Australia – $750,000.
- Develop a program to support small businesses that have grown beyond the start-up phase, but not yet reached mid-size, that is inclusive of diverse businesses.
- Continue the Federal Government Boosting Female Founders program, but make the criteria more inclusive, allowing the businesses to be 50 percent female-owned as many Founders develop the business in a family trust with their sons, brothers, and husbands.
eS4W and Femeconomy acknowledge the expertise of the economist in residence, Stephen Koukoulas, our Partner organisations: THE Rural Woman and Financy and Member Organisation: Women Chiefs of Enterprises International for their contribution to the rich discussion at the roundtable and resources. Thank you also to Femeconomy’s members for sharing their insights at the roundtable and to those who responded to the online survey.
economic Security4Women (eS4W) is a national women’s alliance, funded by the Australian Government through the Office for Women in the Commonwealth Department of Prime Minister and Cabinet.
This article first appeared on Femeconomy and is republished with permission
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