This excellent paper was commissioned by Independent Freelancers Australian supported by the Commonwealth Bank of Australia and undertaken by Monash University. The aim of the research was to develop a better understanding of the independent freelancer/ micro business owner/ self employed sector in Australia. They rightfully argue that a better understanding is crucial for anyone wanting to interact within such a complex sector. They suggest that the responses of this group to current and future economic situations will be a critical litmus test for the whole of society. Moreover the success or otherwise of this group has direct implications for the collection of taxes, for the repayment of loans, and via a traditional 'multiplier effect' there may be implications for many larger businesses. (PDF file, 12 pages, 1,717 KB)

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Unformated preview of the document: 'A Profile of Australian Micro-Business' (Part 3):

especially tax debt. This finding has relevance for those dealing with micro
business as a client and indicates that such dealings will be positive.
New businesses, those in operation for under a year, over-represented
among debtors
2) Business life cycle and behaviours not static
The potential to change in perceptions as well as the actual behaviour of
micro business owners is an important contribution to understanding them
The quantitative results from one of the ATO reports found consistent
differences amongst micro business within the six industry segments and
often apparently linked to life cycle stages with more established businesses
"generally more likely to have a current or recent debt". This contrasts with the
results of the quantitative study which found new businesses, those in
operation for under a year, over-represented among debtors (ATO, 2008 p.
70).
3) Business competency
The finding that most micro-businesses (79%) reported having an accountant
working for their business and that many (43%) also had a bookkeeper. (ATO
2008a, p.46) is generally indicative of a high level of professional support
The view of micro business being quite well organised accords with ABS
results from Part 1 of this desktop audit and is further advanced in the ATO
findings that only 14% of micro businesses had no software
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Very clear willingness of most micro businesses to conform and do what is
"right" as far as tax issues.
The emphasis moves to focus on "the relationship between tax competency
and the business owner as opposed to the business itself'
4) Large Organisations dealing with micro-business people
The results from these two tables clearly indicate that a "one size fits all"
approach will not create either competency or attitude change. A defining
factor of micro business is the fact that it is run by individuals who expect to
be treated as such but may not necessarily understand ATO concerns and
communications
Behaviours/motivations – the Roy Morgan view
Roy Morgan data provides a unique market research/consumer perspective to
this desktop audit of the micro-business sector within Australia. While the view
they provide is explicitly from a marketing context, taking the perspective of
the self employed as a consumer, the richness of the questions Roy Morgan
asks provides the basis for a multi dimensional perspectives. The results
indicated the value of this source is the ability to generate a much greater
understanding and appreciation of the group they categorise as self
employed.
5) The self employed as consumers
The index chart presentation which is a feature of Roy Morgan Research
reports shows that the self employed are at least 41% more likely to earn
more than the average Australian for each of the income levels.
Figure 7: Income by Index Chart
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Professional/manager and skilled worker occupations emerges strongly and
dismissed the notion of self employment as a low skill option.
Figure 8: Occupation by Index Chart
Linked closely to the notion of socio economic status above is the notion of
disposable or discretionary expenditure. The result that comes through
strongly in Figure 9 is the fact that self employed dominate the Roy Morgan
Big spender category.
Figure 9: Discretionary Expenditure by Pie Chart, Table & Index Chart
9
Life Cycle and Number of Children of the Self-Employed
The social context of the self employed is illustrated in Figure 10 below and
adds to the view we already have from the ATO data of self employed
generally being 35+ and often with children in the mid life cycle.
Figure 10: Life Cycle and Number of Children by Index Chart
This particular dataset is worth analysing further for the explanation it may
offer for the reduced working hours of females in self employment to see if the
primary care-giving duties widely offered the academic literature suggests are
the substantiated here. Reasons for female moves into contracting is that they
are likely to be quite distinct and to be strongly motivated, possibly by
childcare and caring for dependents.
Overall the view which emerges from Roy Morgan is that the independent
contractor/ micro business/ self employed are largely a highly self determined
group of people who look to themselves first and tend to be mistrustful of
authority.
10
SUMMARY


Unformated preview of the document: 'A Profile of Australian Micro-Business':  Part 1, Part 2, Part 3, Part 4