By KIANA BROOKS-AMOR
SEVERAL young people across Victoria are choosing to start a business before buying a home.
In Latrobe Valley, 29-year-old Carly Burdett and Judah Leak (24) opened ‘just another barista’ in 2023, but neither are yet to own a home. Both are renting.
The expensive housing market and the ongoing cost-of-living crisis convinced them that starting a business was more financially stable in the long run.
“Financially, it was a smarter move just with the cost-of-living crisis rising and then interest rates going up and up,” Ms Burdett said.
The Australian Institute of Health and Welfare supported this, revealing the “mean price of residential dwellings has increased by more than 60 per cent” over the last eight years.
The National Housing Supply and Affordability Council published a report last year that said: “It takes the average prospective homeowner around 10 years to save a 20 per cent deposit for an average dwelling. Even with a deposit, only 13 per cent of the homes sold in 2022/23 were affordable for a median income household”.
But Ms Burdett and Mr Leak said buying a home was still a goal, and they agreed that their business will help them reach that ambition.
“For me, I think with the current climate, it’s really hard to get into the housing market. And, I thought that it might actually be better to set myself back a bit and then go into a business with the hope of having a bit more capacity to buy a house later on,” Mr Leak said.
Chair in Management and Professor of Management and Marketing at Melbourne University, Daniel Samson, said that many people are trying to start their own businesses as a solution to the cost-of-living crisis.
Prof Samson said that business owners can “generate some savings” “pretty quickly”.
“What a wonderful way forward, because, if you are successful, you can generate a deposit for your home faster than if you’re a salaried employee,” he said.
However, he said business owners need to prepare for failure and risks. He said a steady income is an “uncertainty” for startups.
“If the business fails, it doesn’t get off the ground, you’re back to ground zero,” he said.
Nevertheless, he said that business owners should not necessarily be discouraged by failure.
“Many entrepreneurs are unsuccessful three or four times before the best of them become successful… get up, dust yourself off, don’t take it personally and start again with something different,” he said.
Both Ms Burdett and Mr Leak were motivated to start their own business.
“We wanted to do something for ourselves,” Ms Burdett said.
“There’s a lot of aspiration for people to do something like this. But you kind of just have to bite the bullet and take that risk. Because, obviously, there was always a risk with us doing this… but coffee seems to be booming.”
Mr Leak said that the number one reason he avoided a house mortgage was so he could start a business.
“I knew I wanted to start a business,” he said.
Prof Samson agreed with Chair of Entrepreneurship at Melbourne University and Professor in Management and Marketing, Gerda Gemser, that some young entrepreneurs should consider making their business a side hustle while retaining a fulltime job.
“Once the business gets some traction and might actually become successful, they might say goodbye to their primary job and go full in into their business,” Prof Gemser said.
The Australian Small Business and Family Enterprise Ombudsman published a report last year that said small business owners under 30-years-old are still a minority.
