Self-employment and Entrepreneurship

For many people, starting and running their own business represents an alternative pathway to employment or an opportunity for a career change.

An entrepreneur is anyone who starts and builds a business. There are many types of entrepreneurs. There are people who are able to turn their hobby into a business and make money as a sole trader; there are people who start a new business but remain small (with just a few employees); and there are high-growth start-ups which focus on scale and export from the outset. All new businesses are unique in their approach, planning and trajectory.

Self-employment and entrepreneurship is valuable to Australia

There are around 2.1 million small businesses (employing fewer than 20 workers) in Australia.

  • Small businesses employ more than 4.7 million people and contributed $393 billion to the Australian economy (or about 35% of private output) in 2016-17.

Entrepreneurial activity is strong in Australia. Around 15% of Australians aged 18 to 64 years were actively engaged in starting and running new businesses in 2016.

In which industries is self-employment common?

There are people working for themselves in all industries. Self-employment is very common in Agriculture, Forestry and Fishing (reflecting the large number of workers in this industry who own and operate their own farm). Construction also has a large number of people who have decided to work for themselves.

By contrast, Mining has a low share of workers who are selfemployed, reflecting the capital and scale typically required to operate in this industry.

Self-employment by industry, 2018 (% of industry employment)

Who is more likely to be an entrepreneur?

Early-stage entrepreneurs are most commonly between the ages of 25 and 54. Older age groups are relatively active in early-stage entrepreneurship compared with younger people. This may be due to young people having less work and life experience, or access to start-up funding, than older age groups.

In Australia, early-stage entrepreneurs are more likely to be male (63%), although female entrepreneurship in Australia is high compared with other countries.

Self-employment considerations

Almost half of Australians perceive that there are good opportunities to start a business, while more than half believe they possess the skills to do so. This is above average for developed economies. Fear of failure is one of the main reasons why many people do not start a new business.

Knowing what to consider and planning is key to making a successful business.

Anyone starting a new business will need to know about the industry in which they are operating and the seasonal and cyclical factors which can affect the industry. For example, some industries can be influenced significantly by factors such as climactic cycles, holiday periods, agricultural harvests, consumer trends or competitive factors. Many industries have peak periods and slow periods. This also applies to the regions in which a business is based. For example, coastal areas can have very different peak periods to rural or major metropolitan areas.

It’s important to note that not all businesses survive. Of the 2.1 million firms in business in June 2011, only 1.3 million (or 62%) were still in business in June 2015. Sole operators with no employees in 2011 had the lowest survival rate, with only 56% still operating in 2015. Survival rates increase with firm size, with businesses employing more than 200 workers having an 83% survival rate between 2011 and 2015.

People may fail at their first or second business venture but can learn from these failures and apply lessons about running a business to try to make a successful business next time around or apply these lessons to other types of work.

Starting your own business may require start-up funding, a viable business idea, long hours, the capacity to be a ‘jack of all trades’, and hard work. Exploring your idea, thinking about the skills and funding you need, and undertaking business planning are good first steps if you are thinking about starting your own business.

Help is available

The SelfStart Online Hub is a starting point for people who wish to explore and develop their ideas into a successful business. SelfStart aims to connect people to existing services and programs, as well as provide information that will assist them to start a business. For more information go to jobsearch.gov.au/selfstart.

Resources such as business plan templates, links to relevant ATO fact sheets, and advice on where to get further information is available from business.gov.au.

Sources: ABS, Australian Industry, 2016-17; Global Entrepreneurship Monitor: GEM Australia - 2016/17 National Report; The Australian Small Business and Family Enterprise Ombudsman, Small Business Counts; ABS, Labour Force (annual averages of original data)