Our smallest businesses: how the quiet army of sole traders is redefining work

Recent analysis by the Australian Small Business and Family Enterprise Ombudsman of customised integrated administrative data in the ABS' DataLab reveals how these enterprising women and men shape their working lives with remarkable flexibility - blending employment, enterprise, caring roles and community contribution in ways that reflect the real rhythm of modern Australia.

It's time policymakers gave these enterprising women and men the recognition and tailored support they deserve.

The Ombudsman's analysis reveals a diverse, dynamic and growing cohort that sits at the heart of Australia's economic activity. Sole trading is no longer a sideline or an outlier. It has become one of the most common ways Australians participate in business - whether through skilled and professional services, small and pop-up/occasional retailing, creative work, trade-based activity, transport and logistics, care roles or community based enterprises.

This evolution matters, because policy settings built around old assumptions risk missing the rapidly evolving reality of how Australians now work and earn.

Young Australians, culturally and linguistically diverse entrepreneurs, older women and career switchers are increasingly shaping sole trader activity. Many are balancing enterprise with caring responsibilities or managing long term health conditions. Others are stepping into new industries, supporting essential services or filling gaps in their local communities.

These stories seldom surface in economic debates, but they define the lived experience of self employment.

Sole traders are not a monolith. Women now make up 40 per cent of sole traders, with female participation growing at more than twice the rate of men over the past five years. Many are balancing business with caring responsibilities - more than 193,000 sole traders provided unpaid care in 2021-22, most of them women.

This dual role is rarely acknowledged in policy debates, yet it's central to family and community resilience. Self-employment enables carers to better manage when to invest scarce time and attention to their livelihood.

Cultural diversity is another defining feature. Culturally and linguistically diverse (CALD) sole traders account for 37 per cent of the total, concentrated in sectors like transport and warehousing, which recorded a 35 per cent growth in CALD participation even as non-CALD numbers declined. These businesses are the backbone of gig economy services and essential supply chains.

Geographically, sole traders are everywhere: two-thirds in metro areas, but a quarter in regional Australia where they provide vital services and economic activity. They're also deeply embedded in industries that matter.

Construction remains dominant but the fastest growth is in health care, social assistance, and transport - sectors meeting emerging needs from aged care to disability support.

Behind these numbers are real people facing real challenges. About 18,500 sole traders live with profound health challenges, with one-third of these enterprising women and men who require ongoing support with severe self-care, mobility and communication limitations operating in regional areas.

Many juggle caring duties with running a business. These realities rarely feature in economic policy, yet they shape the viability and sustainability of these enterprises.

Payment disputes are another pressing issue. In transport and warehousing, nearly half of all disputes handled by the Ombudsman in 2025 were about getting paid - a stark reminder of the vulnerability of sole traders in supply chains dominated by larger players.

If policy-makers want to nurture productivity, participation and inclusive economic growth, they must recognise how modern Australians are using enterprise to build livelihoods. The evolving reality of self employment demands a fresh, fit-for-purpose policy approach that:

It is not hard to imagine how the current welcome debate and ideas on lifting Australia's productivity may miss opportunities and initiatives relevant to sole traders. The necessary debate about red-tape reduction and "right-sizing" regulation and compliance obligations tends to bundle all small businesses into a single cohort.

Yet the resources, specialist expertise and system sophistication of a small enterprise with 15 team members and annual turnover up to $10 million is going to be vastly different to those available to a sole trader.

MORE OPINION:

When thinking about tax simplification and regulatory streamlining, having a much sharper focus on sole traders would deliver big dividends and be a big step in the right direction.

This important and fast-growing cohort plays a crucial role in generating livelihoods, seeding innovation and enabling participation.

Sole traders embody the spirit of self-reliance and entrepreneurship that Australians cherish. They are not just economic actors; they are community builders, innovators, and problem-solvers. If we truly believe in a fair go, it's time to give sole traders the policy attention they deserve.