New data by Money.com.au revealed that Australia recorded high business turnover rates in 2024, with 88 businesses closing for every 100 that opened.
In 2024, a record 505,474 new businesses were registered, but a record 443,395 businesses were deregistered or wound down, 15,238 more than the previous year, an equivalent of 17 per cent of businesses operating at the start of 2024 (2.61 million) that had closed by the end of the year.
Money.com.au’s Data & Research expert Peter Drennan explained that challenging operating conditions contributed to the record-high turnover rates even if more Australians are starting businesses.
“Rising costs of living, higher interest rates on commercial loans and mortgages, and economic uncertainty are making it harder for businesses to survive,” Drennan said. “Some closures may simply be business owners restructuring or re-registering under different models.”
The decline of the sole trader
Drennan pointed out that, while a record number of businesses registered this year, sole trader and partnership entries are declining.
The report found that the total number of sole traders grew by just one per cent in 2024, while new registrations for sole traders dropped 13 per cent in December alone. Partnerships also declined by four per cent over the year, with a 12 per cent fall in new registrations in the December quarter.
“Sole trader and partnership entries are declining, while companies grew by 5 per cent, which suggests a shift in how people structure their businesses,” said Drennan.
ISB has recently covered some of the challenges faced by sole traders, from grants and software pricing to a lack of rightsized legislation. With many systems, processes, and services simply not designed for sole traders, it’s no wonder that people are opting out.
