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10.5.2024 13:44
News

Survey: single-person business owners have low incomes

The Yrittäjägallup survey finds that one in five single-person business owners earns less than €20,000 per year.

According to the most recent Yrittäjägallup survey, 58% of business owners earn below €50,000 annually. Eight per cent of respondents earned more than €100,000 a year.

The Yrittäjägallup survey was answered by 1,076 representatives of micro-enterprises and SMEs between 3 and 15 April. Of the respondents, 44% were single-person business owners. Read about the results of the Yrittäjägallup survey in more detail here.

The 2022 single-person business survey also examined single-person business owners’ income level. At the time, it found that such business owners’ incomes were still low, but gradually increasing.

Of all the respondents to the 2022 single-person business survey, 44% said they earned less than €2,000 per month. In the same survey in 2019, that share had been 48%.

The survey also reveals differences between men and women when comparing all groups of business owners. The results show that 20% of female business owners earn less than €20,000. Of male business owners, 12% were in the lowest income category.

Single-person business owners should think about growth

The results of the Yrittäjägallup survey show that 25% of single-person business owners earn less than €20,000 annually. Meanwhile, 21% of single-person business owners earned above that and up to €30,000 a year.

Petri Malinen, an economist at Suomen Yrittäjät, the Finnish SME association, stresses the importance of making a business plan.

“The plan should focus not just on the business itself but also on profitability and the opportunities for success. When you calculate profitability, it’s also important to take sufficient earnings for you as business owner into account.”

In addition, Malinen highlights how important it is for a business owner to want growth.

“As the economy grows, a business owner needs to grow just to retain their position and income level. I encourage business owners to be bolder in entering new industries. That would make it possible to reduce the differences between men and women. Men are often more daring than women when pricing their work.

A significant share of single-person business owners earns low incomes. What do you think the reason for this is, Saara Liukkonen, chair of the Suomen Yrittäjät single-person business network?

One challenge, certainly, is pricing your own work. Business owners who work with their hands are particularly prone to under-pricing their products and not calculating the price of their work. You should seek support for pricing. Thankfully, there is help on offer for that these days, via places such as the Enterprise Agencies.

What kind of problems do you see in single-person business owners’ income level?

Income level strongly affects quality of life. If you’re constantly earning a low income, you could face difficulties in unexpected situations, such as if you fall ill.

How can a single-person business owner improve their income level?

A single-person business owner should examine their pricing and profitability. If their offering includes unprofitable products and services, they should cut them out.

Should more single-person businesses aim to grow their businesses?

Everyone should think about how growth could be possible. For example, they can grow through their networks, with other single-person businesses.

Do you think that single-person business owners are satisfied with their income levels?

Satisfaction probably depends on everyone individually. There are people who are satisfied with their current level and those who want a better income level. Few would want to lower their income level, however.

How has your own income level as a single-person business owner developed over the years?

I’m entering my fourteenth year as a single-person business owner, and naturally my income has risen. Part of the reason for that is that early on, I put together a sounding-board group to help me think about the direction I was going in.

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Pauli Reinikainen