Founder Tax: The Hidden Tasks Costing Business Owners Thousands Every Year

As the backbone of the country, small business owners often take on more tasks than they should to ensure growth and profitability. But is overworking actually costing your business? 

New research from Airtasker has revealed the hidden costs small business owners face by doing everything themselves. In a national survey of more than 250 Australian founders, the research revealed the average small business owner is losing almost $34,000 every year to Founder Tax: the opportunity cost of spending hours on jobs that don’t need them personally. 

This figure is based on the value of an hour of a founder's time to their business, multiplied by the number of hours they spend on work that could be delegated to someone else. These tasks include admin, payroll, office management and cleaning.

Your dedication as a founder is costing your business more than you think:

According to Airtasker, Australian small businesses are losing more than 21 working weeks to the Founder Tax. Scaled across Australia’s 2.7 million small businesses, that lost opportunity is estimated at $92 billion a year.

On average, founders spend 19.5 hours completing delegatable tasks a week across 13 categories, with customer service, admin, accounting, operations and logistics taking up the biggest chunk of their time. 

Annual hours are based on mean (average) hours spent per week on each task multiplied by the average number of weeks worked per year (48.84), based on each respondent's own reported time off rather than a standard 52-week year. Mean figures are used for task-level comparisons as they better reflect total time allocation across the survey population; the median is used for Founder Tax and Gap figures elsewhere in this report where individual experience is the primary focus. Figures may not recalculate exactly due to rounding. See full methodology for details.

Low pay and a lack of outsourcing are worsening the impact of Founder Tax:

The gap between what founders earn and what their time is actually worth is significant. The Value-Based Founder Tax of $33,989 is 35% higher than the Pay-Based figure of $25,244, meaning most small business owners are paying themselves significantly less than the value they generate for their business.

But low wages only tell half the story; founders' emotional motivations play a significant role in small business efficiency too.

While over half (54.7%) of small businesses in Australia say they can't afford to outsource, the most common reason for not outsourcing is that business owners believe it's faster to do it themselves (65%). Over a third (35.4%) admit they simply like to control everything, and three in ten say they enjoy the tasks.

Respondents could select multiple reasons, so percentages add to more than 100%. See full methodology for details

The human cost of doing it all yourself:

Not only does overworking impact the financial success of small businesses, but it also influences the mental wellbeing of founders. 

Airtasker determined that more than half (50.8%) of Australian small business owners report being moderately, very, or extremely stressed overall. 

Younger founders feel it hardest, with two-thirds of founders under 35 (66%) reporting moderate or higher stress, compared to just 34.1% of founders aged 65 and over. Stress levels decline consistently with age, suggesting that either business ownership gets easier over time, or that the founders who make it to their 60s have found ways to manage demands.

Among small business industries in Australia, retail founders experience the highest stress levels. Nearly three in four (73.9%) report moderate or higher stress, significantly above the national average of 50.8%. 

Want to know what your Founder Tax is worth? Check out Airtasker’s interactive calculator here. 

Photo by Tim Mossholder on Unsplash