A recent study by the Council of Small Business Organisations Australia (Cosboa) and Square indicates that small business proprietors are devoting extended work hours yet frequently fail to see corresponding increases in their own compensation.
The fifth edition of the State of Small Business Report reveals that around two in five owners are working more hours, and one in four worked longer for pay that was flat or lower. However, only around one in four owners are paying themselves more than a year ago, while about the same proportion are paying themselves less.
Square’s average seller experienced a 3.9% revenue increase, almost exactly in line with inflation of 3.8%, meaning the typical business essentially held its ground in real terms. Around half of sellers grew, and almost as many declined, while the typical business took no more payments and traded on no more days than the year before.
Cosboa CEO Skye Cappuccio noted that while businesses may appear resilient on paper, owners are not necessarily benefiting. “The topline figures show small businesses largely holding their ground, with revenue growth almost exactly in line with inflation. But underneath that, we can see owners themselves are often putting in more just to maintain momentum. Many are working longer hours without seeing an improvement in what they pay themselves. That is an important part of the small business picture that topline revenue figures alone don’t show,” Cappuccio said.
The report further highlights that most small and medium enterprises struggle to accommodate surging customer demand. Only 25.8% said they could absorb a 20% rise in demand with their current people and systems. Nearly 28% said they could manage it only by working longer themselves, while 23.2% would need to increase employee hours or hire.
“For many small businesses, the owner is also the spare capacity in the business. When demand increases, they are often the person who stays later, takes on the extra work or finds another way to make it happen. When the extra capacity a business needs has to come from the owner, there is a natural limit to how far that model can stretch,” Cappuccio added.
The findings stem from anonymized data collected from hundreds of thousands of Square sellers across Australia, alongside responses from a national survey of 608 small business operators. The analysis shows ongoing struggles with workload and compensation, as owners grapple with expanding responsibilities while their personal income remains stagnant or decreases. The data suggests that financial stability at the business level does not guarantee improved conditions for those leading these enterprises.
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