24 August 2023
Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Susan Graham-Ryan.
Subjects: Small business owners getting older, AgQuip
It has been a tough few years for small businesses with COVID restrictions, border closures, natural disasters, cost of living, inflation. And the eager entrepreneurs that helped shape the economy in the 80s and 90s and early 2000s are getting older and shutting up shop, but they're not necessarily being replaced by the younger generation. Bruce Billson is the Australian Small Business and Family Enterprise Ombudsman and he's with me now. Bruce, good morning. Now, how concerning is it that we aren't seeing young small business owners come through the ranks at the same pace as previous decades?
Well, Susan, it’s great to be with you and your listeners. I'm concerned about it and I think we all should be concerned about it because this next generation of entrepreneurs, the creative, risk taking people that create wealth and opportunity for not just themselves, but for so many others, and bring economic vitality to communities and regions right across the continent, we need those people.
In the 70s we had about 17% of our small business owners were under 30. It's 8% at the moment. That's the same across Queensland. Those numbers are sort of trending in that direction, haven't really turned around for decades. And the most common age of a business owner in Queensland is 50.
And with the launch of the Intergenerational Report today, the population is aging and those business owners and family and farming business owners are looking to get some return for all their enterprise over many years. Who is stepping forward? Who's going to be that next generation and really create the opportunities that those before them have contributed.
Bruce there is some pretty staggering figures from some of this new research by the department. What else has come out of that?
Well, we did a lot of work on it because part of what we're trying to do – and my role is to champion the interests of small and family businesses every day - and part of it is surfacing their story. And that story is something that policymakers need to respond to if we want to lift productivity and make sure that next generation has what we've enjoyed and that's a better standard of living than the ones that came before us. Now, where we're at here, we're seeing, particularly in agriculture, the number of small businesses that are owned by people under 30 in agriculture is 4%, there's a staggering 66% that are aged over 50.
As you look across various sectors, whether it's retail, some of the energy and infrastructure spaces, even in areas like mining, financial services, there's a very, very small percentage that are coming through that are under 30. And I'm sort of posing the question, why is this? Is it because the responsibility of owning and running a business is not really what young people are looking for?
Has the economic times, and, you’d know across your listening audience how difficult it's been to get staff for businesses. People can get reasonably good incomes by taking a job, working for someone else when there was scarcity of labour. We know right now about 43%, Susan, 43%, so that's two in five of our small and family businesses, aren't profitable.
And worryingly about two-thirds are taking home less income than average weekly wages. So, we need to look at what's going on there, make sure that the risk and reward balance is right. As so many small business owners tell me they feel a real sense of purpose, a sense of identity and they love the challenge of chasing a profitable business idea.
Are we making that story attractive enough for the next generation to say, Yep, that's what I want to do with my life?
The risks are obviously quite a key consideration for people if they're going into business for themselves or becoming a sole trader. What else do you think it could be that stopping young people wanting to go down this path?
I think there's a few things in there. We've done some work around family businesses and there’s many in your listening audience, particularly in regional Queensland, where the farming business is a family business. We're hearing kids looking at how hard mum and dad are working and thinking, I'm not sure what I want to do with my life, but I know that’s not it. There’s a bit of that there, and also a sense that there are so many other delicious possibilities that people can turn their mind to.
Also, you see reports about younger people wanting greater flexibility to be able to pursue travel and other life pursuits and being a business owner, particularly at a time when you've got difficulty getting staff and the like, well guess who fills that shift that you can't fill. It's the business owner. Guess who moves the cattle around when you can't get any help out on the farm? It's the owner. So those responsibilities for not just the business itself, but the business of the business, you know, filling out tax returns, things of that. Maybe that's not everyone's cup of tea, but my work is to try and make sure that those responsibilities are right-sized and proportionate for a small business and remind policy makers, ministers and regulators that a small business isn't some shrink-wrapped version of a major corporate where, of course they've got specialist HR, they've got every little technical skill you could imagine.
The flipside is, though, that sense of purpose that so many business owners talk about, they love the contribution of their communities. We know small business owners have a greater role in volunteering. They're the ones that step up for community organisations and events. They lead the disaster response.
What are the incentives for aspiring young entrepreneurs to get more people into being a small business person or a sole trader?
There is support and guidance and a lot of higher education institutions have incubators and things like that. There's programs where, if you want to be self-employed, and Susan let's remember there's one and a half million people who are self-employed, so they're a small business, but they're not employing others, but that's how they derive their livelihoods. And so many of those self-employed businesses move between different other businesses to bring their expertise. I mean, this is exciting.
There’s actually more mature aged people who are either self-employed or running their own business than there are employed in someone else's business. So they've found a way of pursuing an economic objective, you know, securing a livelihood that works for them. And they don't run into any ageism in terms of recruitment and all that. They just get amongst it and make it happen.
But for young people, it's often about that early stage advice whether it's a viable business proposition. Good advice on how to set up your business so that it serves you well and can navigate, you know, the regulatory environment.
I think we need to tell more stories, Susan. We need to showcase more young entrepreneurs and tell their story. And also in the school system, I'm not sure how many career advisors actually suggest why don't you consider running your own business. Yet So many tradespeople end up with their own van and they're out there running their own show.
And that's part of the reason why we have Change Makers on ABC Radio Queensland Mornings. We have a segment called Change Makers, which is all about people in that entrepreneurial innovation space making a real difference.
You are on ABC Radio Queensland, Susan with you. I'm speaking with Bruce Billson. He is the Australian Small Business and Family Enterprise Ombudsman. You have recently been in Tamworth for the regional New South Wales AgQuip field days. How was that? And there's an event coming up in Queensland.
We were in Gunnedah, near Tamworth, but the Gunnedah folks would be unhappy if I didn't make that distinction. I’ve just got back after dusting off my RMs. It was a huge turnout and I think it is the largest agricultural show in Australia. So it was an enormous, enormous enterprise. And I was talking with not only the farming community and primary producers that were there to see what sort of technology and kit and solutions were available, but also talking to some of those that have stalls and stands in there and certainly in northern New South Wales, they've had quite a comparatively dry winter and you can see it in the fields and there's already people thinking about how do you get the nutrient into the feed for livestock given that the grass and pastures aren't delivering it.
So there's people thinking ahead, listening to the forecasts of a possible El Nino phase again and then thinking about technology to detect micro climate moisture levels, managing water flows, but also feed technology that can bring together the nutrients that are needed in anticipation of having to hand-feed the livestock. That was a really interesting pattern. There was also a few quite concerned about security issues. A few have been facing really annoying and unsettling petty crimes. You know, maybe that reflects the economic times, but losing livestock, having assets pinched, someone even shared with me, they had their front gate stolen.
So, there's something happening there, but there's still good energy. In southern New South Wales, the rain pattern has been holding up. People are looking at making choices and planning for a future where they're imagining we won't have quite the abundance of rainfall and water that they have been used to in recent years.
Well, Bruce Billson, thanks so much for sharing your thoughts today. Bruce is the Australian Small Business and Family Enterprise Ombudsman. Thanks so much for your time.
Susan, fab with you and your listeners.