Small business women need to put themselves first financially

The number of women choosing to start their own business has grown rapidly in recent years.

Women are doing it for themselves

According to University of Sydney Researcher Meraiah Foley*, in the 10 years to 2012, the proportion of women running their own small-to-medium sized businesses grew by 12.6 per cent, compared to a 3.8 per cent decrease among male business owners. The figures are even more pronounced for women working either as sole-traders or lone operators of their own incorporated businesses, with no employees. The proportion of women business operators in this category grew by 24.6 per cent in the decade to 2012, compared to a rise of just 1 per cent among men.

Life work balance

Women are attracted to small business ownership, often in an effort to strike a balance between a successful career and the demands of being a mother.

The range of businesses women choose to start up is diverse. While men tend to dominate construction and manufacturing small businesses, women dominate retailing, health, education and social services. Many women choose home offices in an effort to have time for work and family responsibilities.

Not enough for retirement

The problem is while many small business people tell you their business is their retirement nest egg, nearly one in three small business people have no super whatsoever^.

The reality is that many small business owners do not make enough from selling their businesses to fund a decent lifestyle in retirement. In this respect, women in business often share a common characteristic – they put their businesses ahead of their own well-being. That’s why it’s so important that women who are small business owners get good financial advice.

Here are six steps to help women in small business look after their financial future.

1. No matter how small, treat your business as a business

Many small business women perform contract work or freelancing without a formal structure to their businesses.  It’s a better idea to develop discipline within the business, such as staying true to your business plan, managing cashflow and putting money aside for the future.

2. Don’t leave contributions until the middle of June

Self-employed women have the flexibility to make contributions all at once or spread them throughout the year. As cashflow is often tight, many wait until the middle of June before deciding how much they are able to contribute to super.

The flipside to this flexibility is that they have no obligation to contribute to super. That’s why less than one in four of the self-employed make any contributions to super at all**. Try to practise a disciplined program of contributions instead, such as when it comes time to do Business Activity Statements (BAS) every quarter.

3. Don’t miss out on the co-contribution

This should be top of the priority list for women earning less than $48,516. While it has come down in recent years, it is hard to find a guaranteed tax free 50% return on an investment elsewhere.

4. Consider spouse contributions

These can be beneficial for everyone but for women on lower incomes (less than $13,800), perhaps at the start-up phase of their business, spouse contributions can be a great way to keep contributions coming into super with tax benefits to the contributing spouse

5. Pay less for life insurance by paying through super

Life and TPD insurance is tax deductible if paid for through super. So for cash-strapped small business owners, it makes sense to pay premiums as before tax contributions.

6. Think about how you own your business property

There can be enormous tax savings from contributing business premises into a self-managed super fund. It’s definitely worth doing the sums to see if it makes sense for you.

Get more great information on Why You Need A Business Plan.

8 tough questions to ask before starting your business.



The above information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. The information does not take into account your personal objectives, financial situation orneeds and so you should consider its appropriateness having regard to these factors before acting on it.
*Meraiah Foley  “What really motivates the self-employed mother?”, May 2013^Ross Clare – Association of Superannuation Funds of Australia (ASFA), “The self employed and saving for retirement”, June 2008**Department of Industry, Innovation, Science, Research and Tertiary Education “Australian small business – key statistics and analysis”, December 2012


Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.