Yahoo Finance Tradie boss's surprising salary despite company making $1 million a year: 'Snowball effect'
The company owner said they have to make at least $40,000 per month to keep their books in the black.
A young Aussie who owns a civil construction company has revealed his modest salary despite pulling in more than $1 million a year. Tradies have recently been opening up about the huge sums of cash they're making, but not everyone is rolling in it.
A bloke interviewed on the streets of Brisbane explained that business had been booming since he launched in 2020, with the company's income "quadrupling" each year. But his take-home pay is only just above the median Aussie salary.
"We make about seven figures a year [but] personally, I only take home about $70,000," he explained to jobs app GetAhead.
RELATED
Push to stamp out $4 billion card surcharge ‘rort’ hitting Aussies: 'Cash is fee free'
Financial advisor's investing trick to turn $20 into $3 million: 'First mistake is'
The current median salary in Australia is $67,600 per year, while the average income recently hit $100,016 per year.
The boss said he started with a pressure washing business in mid-2020 and it's grown dramatically since then.
He expanded to landscaping, then landscaping construction, and now has set up his civil construction company.
"We went out and quoted work and did some good jobs, and then it's just a snowball effect," he explained.
But there has been a downside to such impressive growth.
Do you have a story? Email stew.perrie@yahooinc.com
The company owner said cash flow was a constant stressor, especially considering their main form of business relies heavily on big machinery.
"We finance a lot of our machines because I just don't have a million and a half lying around in cash," he explained.
"We have to fund about $25,000 worth of repayments every month to even break even ... we have to make $40,000 a month just to cover costs."
Many Aussie small business owners aren't raking it in
But his salary, despite massive company profits, isn't a unique situation.
Many small business owners pay themselves a modest salary because they have to ensure there's enough money left over to keep the lights on and all the staff happy.
Business coach Suz Chadwick conducted research into this area back in 2021 and found that 45 per cent of small business owners don't pay themselves enough and some don't receive anything.
Her data also revealed some business operators would pinch money here and there rather than having a set salary that comes in every week, fortnight or month.
Adam Thomson has been running Dovetail on Overend in Brisbane for more than a decade and he said the last few months had easily been the hardest.
"We pay ourselves less than the award wage to be here because, at the end of the day, it's just been a matter of survival. The last year has been just survival mode," he told Yahoo Finance.
Thomson said he had been working more than 60 hours a week just to keep the lights on.
"Owners are trying to survive and therefore struggling to pay themselves," Anne Nalder, founder and CEO of the Small Business Association of Australia, explained.
"Their fears are well-founded as there is uncertainty with little clarity."
Get the latest Yahoo Finance news - follow us on Facebook, LinkedIn and Instagram.
