The majority of Australian women who take a pay cut when they start their business are happy to do so, according to a new survey, but often struggle to stay afloat.
According to the Westpac Women in Business Survey, which is based on a survey of 1,100 women across Australia, 51% of the women who started their own business took a pay cut.
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Encouragingly, 62% who took a pay cut felt it was worth it, while 77% would start their business again if they had the choice to remain in the corporate world or become an entrepreneur.
The survey shows those aged 30-39 have the highest propensity to leave corporate life to start their entrepreneurial journey.
More than 60% of respondents cited independence and flexibility as the main reasons for women starting their own business.
Retail is the most popular industry among Australian businesswomen, with 34% of respondents operating in this sector, followed by health and hospitality (10% and 6% respectively).
Larke Riemer, Westpac director of women’s markets, says she’s not surprised by the number of women who are happy to take a pay cut when they start their own business.
“For women, money is not the end-game,” Riemer says.
“It certainly helps… but the value of independence to do something they love, with flexibility around hours and work locations, cannot be understated.”
“For those women who had or were planning to start a family, working from home was a big driver to leave the corporate workplace.”
“Seventy-seven percent of women [provided] this as a primary reason they started a business. Over 46% of these women believe it was unrealistic to work full-time after having children.”
The survey shows while female entrepreneurs are happy to take a pay cut, there are a number of financial obstacles they face such as cashflow, overhead costs and clients not paying on time.
The survey shows 45% believe maintaining cash flow is the main financial issue they face, followed by overhead costs (29%).
The survey also highlights the impact of the global financial crisis, which affected two in five of the businesses surveyed, possibly due to the large number of women who operate in retail.
According to Riemer, the effect of the GFC on small business owners “cannot be underestimated”.
“We know that retail across the board has been hit hard. The survey indicated retail to be the most popular industry for women to own businesses in,” Riemer says.
“We need to make sure these women are properly supported.”
According to the survey, only 14% of female business owners have a dedicated financial advisor, and only 16% use a financial advisor “from time to time”.
“Particularly when owning a business, it should be a priority to feel a high degree of confidence in your decision-making and financial plans for the future,” Riemer says.
“When you are in business, you have a number of partners – your business partner, your lawyer and your financial advisor.”
“Their advice and oversight helps to isolate where improvements can be made and where opportunities lie – integral for the continued success of any business.”