Male business owners in Australia award themselves with a salary almost twice the amount that women business owners pay themselves, a new study has found.
Australian software company Reckon analysed ABS data and surveyed 1,000 Australian small business owners to find that on average, men paid themselves a salary of $89,759 while women paid themselves a salary of $48,729.
Among these small business owners, most of them aged between 45-54, almost 80 percent cent of men paid themselves a salary, compared to 70 per cent of women.
The women entrepreneurs who described their business as a “side hustle”, typically earn only 40 per cent of their male counterparts.
Since 1991, female business ownership has increased by 77.4 per cent. Today, women-founded businesses make up 35.4 per cent of small businesses, though it’s only risen roughly five per cent in the past two decades.
The latest study by Reckon analysed the industries where female-founded businesses operate, their earnings and their unique challenges.
Female entrepreneurs dominate health and education businesses, with higher percentage of female business owners in Health Care and Social Assistance (64.4 per cent) and Education and Training (62.5 per cent).
On the flip-side, small businesses operating within industries including electricity, gas, water, and waste services were almost exclusively male-owned.
Jessica Morris, Head of People and Culture at Reckon said that despite the number of female small business owners increasing over the last couple of decades, there is still a lot of work to do to create equality between small business owners.
“Women are not only running fewer businesses but also earning less than their male counterparts,” she said.
“This highlights the need to support and empower female entrepreneurs. We need to create an environment that encourages female entrepreneurs to know their worth, as well as navigate challenges such as imposter syndrome and financial difficulties.”
Most respondents to the study cited the desire for financial independence as the main reason they started their own business.
Sydney-based cafe owner Amy Doan started her own business in the hopes of providing her son a stable and reliable employment. Doan’s son, Koh chan, lives with Kabuki Syndrome, and Doan described one of her most pressing challenges as balancing caregiving responsibilities alongside running a business.
“I can’t 100 per cent focus on the work, especially because my son has a lot more challenges because of his medical conditions,” Doan told Women’s Agenda earlier this month. “There is the guilt of not fulfilling my responsibilities as a mum and not 100 per cent devoting myself to the work.”
Doan is among the majority of small business owners who cite ‘work-life balance’ as the their top difficulty when starting a small business. Other stresses include uncertainty and risk, time management, burnout and financial pressure.
Doan confessed that starting her own business was an incredibly daunting enterprise. “I quit my job to start my own business, which was a huge pressure on myself and on my family,” she said.
When it came to the issue of ‘imposter syndrome’, the study confirmed past research which found that it is phenomena almost overwhelmingly felt by women rather than men. While just 5.8 per cent of male small business owners reported experiencing imposter syndrome, 16.4 per cent of women reported feeling it.
Over 40 per cent of female business owners hold at least a bachelor’s degree, graduate diploma, or postgraduate degree, while the equivalent proportion of male business owners had certificate III or IV or an advanced diploma. The study’s authors attribute the higher level of education among women to a belief that formal qualifications are a prerequisite to starting your own business.
But, as Doan herself can attest, prior experience or tertiary education is not required before establishing a business.
“I started this journey alone, without much experience,” she said. “I didn’t work in hospitality prior to [my] cafe.”
Two years on, Doan is a successful business owner, having cultivated a strong working relationship with a reliable team of employees. “Over the years I have worked toward building a strong supporting team who I can rely on. I have been very fortunate and proud to say that after two years I have this team of amazing staff who work very hard and support me.”