Small business owners work hard for little pay – Business Loans
September 18, 2019
Having your own company means great freedom, being your own manager, being able to do something you really want and so on. However, it also often means that you have to work very hard and unfortunately many times you do not get very much in salary.
A small business owner can work an average of 10 work weeks more
According to a survey, small businesses in Sweden work an average of 20% more than an ordinary employee, while earning 34% less per hour for their job.
The report comes from the Entrepreneurs, who have compared self-employed people with ordinary employees and the results show that they with their own companies often work very much but do not get very much money in return. A small business owner can work an average of 10 work weeks more per year than an ordinary employee does, but at the same time receive clearly lower wages per hour worked.
In addition, the incomes of self-employed people are very often more uncertain and one assumes that the uncertainty is in principle twice as great as for someone with regular permanent employment.
Lars, who is a chief economist at Entrepreneurs, believes that most people who start their own businesses know that they will get a lot of work, but he thinks that in that case they should pay better. If you are going to work hard you would like to see some dividends as well. He also says that growth in Sweden can be harmed when conditions for Swedish self-employed people are in this way.
It just might not pay enough to start a business
I, as a self-employed person, agree that there may be too little money left over if you have an employment. The survey says that small business owners have less money per worked hour even before tax and then the tax for self-employed persons (including self-contributions) is clearly higher than for those employed by someone else. That way, there is even less money left to live for each month.
To counteract this, you can work even harder, but very many who have their own companies already work very hard from the beginning, so this is not a good solution.
Lars Jagrén proposes a more favorable distribution of the taxation of capital and services as part of the solution, which I agree with. Sweden should welcome people trying to start their own businesses which contributes to growth in the country and then you also have to do what you can to support those who choose that alternative. If it is a constant uphill, not many can cope in the long run.