Digital accounting firm Hnry launches Australia’s first comprehensive sentiment index for Australia’s 1.5M sole traders.
Thursday, 14 October 2021 – Australia’s sole traders have been hard hit by COVID-19 but are optimistic about their prospects as the most populous states prepare to open up, and the nation looks to a post-pandemic “new normal”.
But there are significant variations among the states, with Victorians still in lockdown the least optimistic about their prospects. Also, sole traders who were financially impacted by COVID are more likely to classify their mental health as “poor” or “very poor”.
These are the findings of the inaugural Hnry Sole Trader Pulse, carried out on behalf of fintech Hnry, Australasia’s largest and fastest-growing digital accountancy service expressly for sole traders.
Independent earners with an ABN, such as tradies, freelancers, and consultants, comprise the fastest-growing yet most underappreciated sector of the nation’s economy. Australians who classify their primary occupation as “self-employed” make up 1.5 million of the nation’s 2 million-plus small businesses with total estimated earnings of around $90 billion a year. The number of sole traders grew by 110,000 since the start of the pandemic alone. 1
Conducted by Resolve Strategic between 1-7 October, the survey of 500 ABN-registered tradies, freelancers and contractors found that:
Sole traders in non-lockdown states are particularly positive about the prospects for business and overall economy over the coming months. Victorian sole traders, and those in rural and regional Australia, are the most pessimistic. With the opening up of NSW, sole traders in Australia’s most populous state are now more optimistic than their counterparts in Victoria;
41% of sole traders believe their business has done worse since March 2020 compared to pre-COVID. A quarter (25%) say the pandemic has had little effect on their business, and one in eight (12%) report doing better;
Government support schemes such as Jobkeeper, federal disaster payments and state-specific subsidies hit the mark. Only 35% of sole traders received government support during the pandemic. But of those who did, a significant majority (61%) say the level of support was adequate for their needs, compared with 19% who say it was inadequate;
Around half (46%) of sole traders attempted to access a new loan or credit in the last 12 months, but half of that number (21%) had difficulty doing so. This was most noticeable in NSW, where more than half of the sole traders trying to access credit said they found it difficult.
Most respondents are positive about the long-term personal benefits that sole trader status provides, including work/life balance and the degree of freedom it affords them. But the stresses of COVID remain apparent. Those who were negatively financially impacted by COVID were 8x more likely to classify their mental health as “poor” or “very poor”. Sole traders in Victoria reported the highest rates of mental health concerns, with 1 in 4 rating their mental health as “poor” or “very poor”.
Karan Anand, Head of Hnry Australia, said the results are a compelling snapshot of the confidence and outlook of Australia’s sole traders as the nation looks to a post-pandemic recovery.
“The results are clear. Australia’s sole traders have been battered by the COVID-19 pandemic and rolling lockdowns, with almost half taking a hit to their business, and only one in eight having fared better than before. Additionally, access to credit or loans for sole-traders over the last year proved difficult for around half of those who pursued it,” Mr Anand said.
“But sole traders are renowned for having the skillset and the mettle to overcome challenges in their everyday operations, and these results show that there are healthy green shoots of optimism in their outlook.
“Interestingly, the pandemic has largely not dimmed the motivations for pursuing the sole trader life – freedom, work/life balance, self-starting and self-reliance. These are the underpinning reasons we are seeing a sunnier outlook, despite government support tapering away.”
About the Hnry Sole Trader Pulse
The survey was commissioned by Hnry and undertaken by Resolve Strategic to measure the sentiment, views and experiences of sole traders in Australia. In October 2021, Resolve Strategic conducted an online quantitative survey, interviewing 500 sole traders with an ABN including contractors, consultants, freelancers, gig economy workers and tradies. The survey is nationally representative.
Hnry is a digital accountancy service designed to take care of financial admin for sole traders in Australia and New Zealand.
Whenever a tradie, contractor or freelancer with an ABN gets paid, Hnry automatically calculates, deducts, and pays all of their taxes, so they can focus on their daily jobs and never have to think about tax again.
Founded in New Zealand in 2016, Hnry launched in Australia in 2020 and has grown its user base by 30% month on month. With 1.5 million Australians now classifying their primary occupation as “self-employed”, up by 110k since the start of the pandemic alone, the business is primed for continued expansion.
Earlier this year Hnry announced a $4.1m capital raise, led by Sydney-based Equity Venture Partners. This funding round spearheaded Hnry’s growth in Australia and was supported by the appointment of Karan Anand in the role of Head of Australia.
1Source: ABS Counts of Australian Businesses, including Entries and Exits, 16-02-2021, issued annually