Aussie sole traders undeterred as inflation packs a punch: Hnry research
The negative effects of inflation are doing little to dishearten Australia’s 1.5 million sole traders, with new research revealing three quarters (75%) continue to be happy in their professions.*
The latest Hnry Sole Trader Pulse – the only nationwide survey of self-employed people in Australia – found that 68% enjoy the freedom of independent earning and 56% have a good work-life balance.
This positive attitude comes in spite of economic pressures, as higher interest rates and soaring prices means 75% of sole traders are paying more for supplies and services in the past three months, up from 70% in March 2023, while 63% are either eating into their savings or putting less away.
In the face of economic uncertainty, sole traders feel they have three options: cut costs, raise their rates, or work more hours. The majority (72%) are actively trying to save on business expenses as prices skyrocket, which has been consistent since June 2022.
Fewer, however, have been able or willing to increase their prices (just 28%) compared to this time last year (56%), as many fear this will turn clients away or is beyond their control. As a result, 28% are working more hours to cover the costs, meaning sole traders are under more time pressure than ever before.
Karan Anand, Managing Director of Hnry Australia, commented, “It’s undeniably tough out there for self employed people, however as self-starters, they have the skills, mindset and resilience needed to take on the challenge with confidence.
“While there are variations, on the whole we are seeing more sole traders feeling positive about the year ahead (45%) than about their financial performance over the past year (38%), with just 15% feeling pessimistic. Plus, the majority (56%) feel secure in their jobs and in their financial security, with over half (57%) reporting solid personal satisfaction and happiness from self-employment.
“The results tell us that the personal freedom, self-reliance and lifestyle benefits that come from working for yourself means Aussie sole traders are ready to roll their sleeves up and weather the storm.”
Hnry’s survey shows that sentiment differs across the nation, as half (48%) of New South Wales-based sole traders feel their financial performance has been good in the past year, compared to just over a third (36%) in Queensland and only 29% in Victoria. Similarly, when it comes to financial security, 65% of New South Wales sole traders feel good, compared with 57% Queensland and 46% Victoria.
High levels of tax and financial admin are also posing a challenge to Australia’s self-employed, as the average sole trader spends a full day’s work (8 hours) per week on their financial affairs – an hour more than reported in the past three quarters. This is particularly high for tradies (10 hours) and consultants (9 hours).
Anand added, “More than ever, time is money for sole traders. Losing a day per week on financial admin, plus spending an average of $348 a month on tax and financial affairs, is redirecting their funds and attention away from what really matters – excelling at their jobs.
“These misspent hours equate to a startling $28 billion lost in productivity each year. As the economic outlook remains uncertain, it’s more crucial than ever for sole traders to receive the support required to unlock the sector’s full potential, whether that’s through a tax break or additional tax relief.
“Freeing sole traders from the burden of financial admin, Hnry also exists to help bridge this gap – empowering independent earners to focus on pursuing their dreams, building sustainable businesses and driving economic success.”
The Hnry Sole Trader Pulse is Australia’s only regular, comprehensive regular snapshot of the sentiment of self-employed people in Australia, such as tradies, freelancers, and consultants. For more information, visit hnry.com.au/au/soletraderpulse.
*The survey was commissioned by Hnry and undertaken by Resolve Strategic to measure the sentiment, views and experiences of sole traders in Australia. In June 2023, Resolve Strategic conducted an online quantitative survey, interviewing over 500 sole traders with an ABN including contractors, consultants, freelancers, gig economy workers and tradies. The survey is nationally representative.