Research by the Australian Women Chamber of Commerce and Industry has revealed the majority of women small business owners do not pay themselves a wage.
The survey results released yesterday from an AWCCI study of 3000 female respondents showed 50% of the businesses required more capital to grow.
It also found a large majority of women start a business with under $5000, with just under 70% using personal savings, and 51% of women did not pay themselves a wage.
Women in rural areas were less likely to pay themselves a wage than those in metropolitan areas. Overall, 40% of the women surveyed also said they worked both Saturdays and Sundays, while 36% worked seven days a week
These figures, AWCCI executive director Yolanda Vega told SmartCompany, are alarming and could result in increasing numbers of women living below the poverty line.
“It’s always hard when you are a small business owner trying to bring in an income as well as running the business, but because the majority of women are in service based industries they can’t obtain grants, contracts from industry and government and furthermore women by nature tend to give out a lot more than they should, meaning they always care about others before themselves.”
“We feel there is potential for another one million women to be living below the poverty line. At the moment research shows the majority are women and children and the majority of people living below the poverty line after rent, are surviving on a few dollars a day,” she says.
Vega says many women start a business without an exit plan and without enough funds.
“This is problematic for the community and the economy, both in the short and long term because money changes everything,” she says.
Vega says women are increasingly leaving corporate jobs to start their own services business. Research from AWCCI shows the number of females running their own business has increased by 8.9% in the past five years, while the number of males running a business has dropped by 3.7% in the same period.
Vega also says women not paying themselves wages has negative implications on the economy as a whole.
“Only a very small percentage (37%) of respondents believed they were paying themselves a market wage, when they actually paying themselves a wage at all.”
“It’s harming everybody. If you look at the big picture, women have the power of the purse and between 80-90% of consumer decisions are being made by women. If we continue to see this trend of women leaving the corporate environment and continuing to not pay themselves a wage, they won’t be able to spend,” she says.
Vega says the women who are not paying themselves a wage are also not receiving super, and this will have implications upon their ability to retire comfortably.
“Women are not valuing their work as much as they should.”
“What we’re trying to do is advocating to make sure the government starts using women as suppliers. Last year the government pumped out $41.3 billion of contracts, but they don’t know what percentage went to women, and if they do know they won’t deliver that information to anyone,” she says.
SmartCompany contacted AusTender, the Australian government agency responsible for research and publications into government business opportunities and contracts to see if the data was available, but received no response prior to publication.
However, research presented in November last year at the annual global Women Vendors Exhibition and Forum found women’s share of government corporate procurement contracts was only 1% globally.
In the United States the government has set a government-wide mandated procurement goal of 5%, but in 2012 only 4.1% of contracts were awarded to women-owned businesses, according to research from Women Impacting Public Policy.
Vega says the Australian government needs to start monitoring how many government contracts are given to women-run businesses so mandates can be set which dictate the percentage which must go to women.
“The government should now be setting targets. We don’t even collect the data, so we can’t possible instigate a mandate and try and set targets.
“The government must start collecting data now to avoid a massive catastrophe,” she says.