What Kind of Business Are You Really Running? The 5 Different Types of Small Businesses in Australia’s Business Landscape

In this episode, Sam and Kate explore the five different types of small businesses—a framework Kate has been developing after nearly a decade of personal experience with different types of business owners. If you've ever felt like traditional business advice doesn't quite fit what you're building… you're not alone.

In this episode, you’ll hear:

• Why traditional business models (like those from The E-Myth by Michael Gerber) don’t work for everyone.
• The five types of small businesses—and why knowing which one you’re building changes everything.
• The danger of following blanket advice that doesn’t align with your business type.
• Why you don’t have to scale, hire a team, or build a sellable company to be successful.
• How thought leaders, consultants, and solo entrepreneurs are playing a different game altogether.

Kate shares her "aha" moment after attending a seminar steeped in Gerber-style advice—and the honest conversation she had with a fellow high-performing consultant who felt completely alienated by it also. Together, Kate and Sam unpack the assumptions behind mainstream business support and why they don't always reflect the modern business landscape.

If you don’t know what kind of business you’re running, you don’t know which game you’re playing—and every type has different rules.

Which of the five business types are you building?
➡️ Tune in now to discover the model that fits your vision—and stop trying to squeeze into a framework that doesn’t work for you.

📩 Got thoughts or questions about today’s episode?
DM us on or email us. We’d love to hear where you see yourself in this model—and how it’s helped (or hindered) your growth.

🎧 Listen now on Spotify, Apple Podcasts, or wherever you get your shows.
🔔 Don’t forget to subscribe, rate, and review if this episode resonated with you.

Connect with Your Hosts:

Kate De Jong, PhD | Inspired Business 🌐 Website: https://katedejong.com/ 📱 Instagram: @katedejong.inspiredbusiness ✉️ Email: kate@katedejong.com

Sam Morris | Digital Systers 🌐 Website: https://www.digitalsysters.com/ 📱 Instagram: @sammorris.businesscoach

Transcript

0:02

Good afternoon and welcome back to the Thriving Business Podcast. Hello, Sam. Hello, Kate. It's really nice to be back with you. It feels like, I don't know what's happened. We've had these massive big gaps this year, haven't we?Where we just haven't been able to line up properly. No, life has certainly got in the way. And I think it was a few episodes ago that you and I sat down to just do a duo conversation like this. Yes, it was. And it's taken us half an hour to figure out what we're going to talkabout. But as those of you who know Sam and I well, we We started out with grand intentions of planning the content themes, but we found that it seems to work better that we just roll with whatever's relevant. And, you can't really plan out what's going to be the most relevant topic at the time. And so now we just sort of come up, have a little bit of a discussion about what's going on with you, what's going on with me, and what's the best topic to talk about. Yes. Yeah, so our discussion has resulted in, we think it'sa very valuable thing to talk about the five different types of small business. Because I was sharing with Sam before we got on that I went to a seminar last week where someone was, it was a business coach, explaining how you can run a business, a true business that gives you the freedom and lifestyle you want. And it was based very much on the Michael Gerber E-Myth book, whichis a bit of an icon in the business world, isn't it? Everyone seems to know The Evil by Michael Gerber. And if you haven't read it and you're new in business, I'd recommend you give it a read because it has some very valuable ideas in there. But Sam and I personally struggled with applying that whole philosophy and approach in our business for the longest time. And it wasn't until we met Matt Church, who is the founder of the Thought Leaders Institute in Sydney, that we both went, oh, that's why that business model has not worked for us. And because we are not a traditional business, we are playing a different game. And I've since come up with what I think are the five different types of small business. And this is sort of my thoughts only, but we can walk through them. But it's important to know which game you're playing, which type of business are you building, what is the purpose of that business?Because if you're not clear about that from the onset, then you don't know which game you're playing and the rules are completely different for each one. So yeah, and you were saying, Sam, you've been frustrated by the blanket business advice that's given, which isn't necessarily appropriate for all businesses. Exactly, yes. And I love the way that you have divided up the five business types because as you said, most people don't divide them up the way. And certainly here in Australia, the government thinks that there are only three kinds of business. Yeah, medium or large, is that what you mean?Yeah. That's right. And if you go to the local business support, government support systems, they're great, they have great resources, but they are all traditionally focused on those, you know, the resources they provide and the approach they advise is the traditional business model. But the business landscape has changed and not everyone fits that model. No, And the different business models do havereally quite dramatically different needs in order to function. And even as far as their foundations, they need different foundations to be successful. And I think that for far too long, and I shared this with you, that one of my frustrations is the cookie cutter solutions that were given withoutconsideration to your five business models and what is needed to set each of those up because they do have really different needs. Yeah. So the premise of Michael Gerber's E-Myths that we just refreshed on before we jumped on is his core conclusion at the end of it is basically you need to build a business that can run without you. Which, if you're running a traditional business, that is certainly the case. You need staff who are competent to run the business. So you can take holidays or you can go out and do business development and the team, covers the operational needs. So, and the core premise is you're not running a business unless you can step away from that business and sell it. Yeah. Yeah, and that approach just doesn't work for people like you and I who are consultants, coaches, because we are the business and we can't sell it and we don't want to, that is not the purpose for which we went into business. And as I was sitting in this seminar last week, I was sitting next to a really successful consultant. He's very entrepreneurial. He does mergers and acquisitions and he looks foropportunities out in the market like he's just recently bought. an algal biotech plant and he's on merging and on selling it, really smart, but he is a solo consultant and he's brought in to advise on projects and he doesn't have any staff, doesn't want any staff, but running a highly successful business, you know. And I was sitting next to him as this person was going through the Gerber methodology and saying how you don't have a proper business unless you can step away from the business and sell it. And he just sort of looked at me and he said, he was like, that's rubbish. And Yeah, it's so I guess that's what I would love to do in this episode is just give an overview of what I think are the five different types of businesses. And it really does start with what's the purpose of why are you going into business?What is the end result you're trying to achieve?And so when you're clear on that, you can, you know, suddenly have the freedom to follow a business model that matches that type of business you're playing. Yes. Yeah. And I think the key word there, Kate, is purpose. And I don't think that Gerber business model necessarily supports anybody who's going into business who is driven by purpose and wants to be in charge and lead that purpose. Because stepping out of that business and being remote from it and having a business that's an asset that you can sell, that is separating the person from the core purpose in which they start in the 1st place. And that's where those two things are out of alignment. Yeah. So their purpose is different. So how about we talk through the different types?So the first one, well, I was, we first started talking about, yeah, the ATO says there's only three types. Small businesses, which is less than 10 million. And then you've got medium-sized businesses, which is 10 to 250 million. And then you've got large businesses, which is 250 million plus. 97% of all businesses in Australia fall in the under 10 mil category, which is amazing. And less than 20 staff, which I also thought was fascinating. So we really are a country of small businesses. But within that, yeah, the ATO says within that you've got sole traders or business partnerships or companies, PTYLTDs. And it's like, yes, that's true from a structure perspective. But again, there's no definition out there about the type of the purpose of the business. So the first one will start at the small end, which is the micro businesses, the businesses that can happily run without registering for GST because they're not earning over$75,000. And back when you and I were working with a lot of female founders, that's typically what we were helping them start up, wasn't it?these lifestyle businesses that they could run from home while raising children and so on. Yes. So the purpose there is lifestyle satisfaction, flexibility and the freedom to do something you love often as a side hustle or as a part-time thing while becoming a, you know, while raising a family. And it's direct effort to income. So that might include things like, you know, ladies that run a consultancy, sorry, sleep consultants from home, they might go around the local neighborhoods and helping parents get their babies to sleep. They might be selling, I had one lady that was selling giant mushrooms at the markets and doing, sorry, not mushrooms,marshmallows. What kind of mushrooms werethey, Kate? But these things were so popular because they were, so she'd go set up, she'd have a whole year planned out with royal shows and things and she made really good money making these marshmallows. Yeah. Still was running a good little business, had to get her bookkeeping right, her accounts and all that sort of thing. Anyway, those are the micro businesses. They're sort of more of a hobby, do something you love, you know, make good money and just have that freedom to do what you want. And it's never the intention of these people to go into mass production or anything like that. It is purely to, like you say, fund this and support this lifestyle and bring a bit of money in without encroaching on, family or whatever is important to them. Exactly. Yeah. So that's the micro businesses. The next one up. We've got traditional small businesses, trades and franchises. So this is the Michael Gerber segment of businesses. It's where you want to deliver a professional local service. So you want to build a business that's systems and staff dependent. You want to build systematic business value with the aim to eventually sell, focusing on local market dominance and operational efficiency. So the Michael Gerber book is perfect for that kind of business. Which would be the business you and your husband run, right, Sam? Absolutely. Absolutely. And I do enjoy that business model because I do love the systems and all of those things. So yeah, definitely very comfortable in that world. And you could sell that business. You will, is that the aim for you guys to sell the business? Yes, at some point. I think. I probably have a little bit of a different perspective on business ownership than my husband probably because of the background that I've got in working with other businesses because Dave does struggle to separate himself from working in the business and being part of the team as opposed to the business being an asset. Whereas I can very easily separate myself and say this is an asset and you can leave it alone and it will continue to produce income. Yeah, so perhaps could you give an overview of what the business does just so people understand?Oh, do you know how many times do I have to explain this?So we have a spray booth cleaning and maintenance business. It is not tanning spray booths. It isBray booths for like panel beaters, manufacturers, people like that. Yeah. So we're very much in the industrial service space. Yes. So in that case. Michael Gerber, is the perfect fit because it's about building systems, staff that can run the business without you. And in that case, yes, ideally, Dave should be just working on the business, not in it, even though I know he struggles with that because he's, and the reason for that could be that it's his craft, right? He's the technician. And if we're talking about Michael Gerber, he's the technician. Exactly. so the three hats that Gerber talks about are the technician, which is why most people start a business to do the craft, but then they've got to develop the skills of being a manager and an entrepreneur. So manager being setting up thosesystems, developing operational efficiencies, oversight, and then you've got the entrepreneur, which is business development, marketing, opportunities, strategic partnerships, all that stuff. Yeah. And Dave is probably a perfect example of someone who struggles with the other two hats. Would that be right?Yes, And so consequently, I'm wearing the other two hats most of the time. Yes, while he's doing it. Yeah, and it is an interesting dynamic because I, because we're wearing those different hats means that we approach things very, very differently. Yeah. And you know, sometimes that can be a bit of a clash. fun conversation sometimes, because I'm very much about growth and about, I set up systems and I create checklists and I do all of those things so that he can be removed from the business. But, there is so much beyond wearing that technician hat. There is also so much identity tied up in that business for him as well. So it's very complex, all of that. Yeah, but it's also not uncommon, right?That the... No, absolutely not uncommon at all. I come across so many business owners where the founder struggles to untangle themselves from operations and get out of the business and work on it. Yeah. They can't conceive how they can still make money if they're not there working. Actually, I had a session with a gentleman last year, actually. And he had already sold his business. And he was having buyer's remorse about letting this business go. He wasn't trusting the people that have bought it. He wasn't trusting that they were going to continue on within the vein in which he'd built his business. And yeah, very much struggling to let go and let someone else take that on. Yeah, which so I think in that case,in the Gerber book, it is a very non-emotional thing, isn't it?I'm building this asset of value so that I can sell it on. I don't have any emotional attachment to the purpose of the thing or how it, you know, obviously you have to be a little bit passionate about it to make it work. But that's not, it's a very different intention. Whereas it sounds like this founder you're talking about, it's his heart and soul and passion. He's built this thing and he's sold it on, but he can't let go because the new people aren't doing it as well as he did. And Yeah, if you're going the Michael Gerber route, you've got to really separate the emotion from the business. Yes, you do. But I think, you know, that emotional attachment and that identity attachment is true for a lot, you know, a lot of the trades and small businesses. Yeah, because they did start as atechnician. It is their purpose, their passion, what they do. If they did start as the entrepreneur, that's a different mindset going into in the 1st place. But that rarely happens, doesn't it?Because you've got to. Rarely happens. You've got to work as a tradesman to get enough skills and experience to be able to branch out on your own and start your own. So you start out doing the trades, the craft, being the technician, and then you start trying to develop the other hats. And so that untanglement is always really, really tricky. Yeah. Yes. Yeah. And Gerber's book is really good in helping people understand how you can do that, approach that whole untangling process and eventually have a business that runs without you. And I mean, how awesome would it be if Dave could just rock into the office one or two days a week and it's still making amazing money without him. And all he does is go in, chat with the staff, keep the engagement going at very hands off. Yes, and that and that is what we are trying to work towards, but... Kate, there's a lot of sabotage that's going on in there on Dave's behalf, just because he's struggling with that separation. And it's very much taking time to get his mindset around what this looks like for him, what it looks like for the staff, who he is when he's not needed 24-7 with everyone calling him and letting go of the idea that you're not the only one. That's more of a psychology challenge, isn't it?Ratherthan. Oh, yes. So we've talked about #1, micro businesses. We've talked about traditional businesses, trades and franchises. And the third one is entrepreneurs. So these are the market disruptors, the innovation driven people. They're building one or more scalable businesses for high value exits and equity. So they are high risk, high reward, and that's the Shark Tank types, right?Yes. Yeah. And that's a whole different ballgame. I've worked on a couple and it's just a different, whole different set of rules, whole different approach and the purpose. Entrepreneurs, they are also, the true entrepreneurs are also not so much emotionally attached to the product. It's about finding something that's really got high, you know, There's a market demand, there's the potential to scale, make lots of money, get equity in the company, and then have passive income from now and into the future and build up a portfolio of companies in which you have equity so that you're bringing in passive income. So those are the, what's his name?Mark Cuban. That's the founder, the guy, the big entrepreneur in America who's on Shark Tank A lot. Yeah. I think that entrepreneurs' emotional attachment in business is to potential, not a product. Absolutely. And the high risk. And when it's an attachment to potential, it's more easily transferred to the next thing. Because entrepreneurs are quite often, it's quite often not just one thing. It's one thing right now, butthey do move on to the next thing. Yeah, but the true meaning of entrepreneur is that you're in between projects, right? Yes. And a lot of people, a lot of small business owners call themselvesentrepreneurs, but they don't, they're not actually the proper definition, which is you are building different projects to a high value state where they can be sold for really high reward, you're looking and the actual statistics of those succeeding is really small. So something like one in 10 or someone was saying even less of thoseentrepreneurial projects actually ever get off the ground because you do need that funding. And even when you've got the funding, it's not, it's a tricky, it's a tough game to play. And thepeople like, Elon Musk and Mark Cuban, those types, I think you're exactly right, Sam. They get high on the potential of a project and what it can do from them. And when it pulls off and they make a squillion dollars, it's so exciting. And then you move on to the next one and you're looking for the opportunities in the market. Yeah. But yeah, they've had their high from it. They've had their adrenaline rush and now they'll look for the next one. So yeah, different beast. Different beast and that's a true entrepreneur. I have worked on startups where the founder is very emotionally attached to the product and that is also very tricky because they're not seeing things logically or commercially so much. They're very controlling about how they want things to happen and often that's not the right commercial approach or. Yeah. So yeah, interesting. So that was, that is a whole different ballgame. You cannot apply the Gerber approach to that kind of business until that business is fully established. And then it's about, once the market is locked in and you're turning over a lot of money, then yes, you do have to, it's got to be staff and systems driven and so on. But to get to that point, it's a whole different ballgame. Yes, different approach. Yeah. So you could argue that Gerber, the Gerber approach is eventually relevant to all, well, to all businesses that end up needing a lot of staff and systems to run. But if we go into the next category, which is category#4, that's the solopreneurs, consultants, coaches and thought leaders. And that's a whole other ball game as well. Yes. So while I agree that for those type of businesses, there are certain elements of their business that would need processes and things like that, but the fundamentals of the business, I don't believe can be process driven and can besystems driven. Why is that, Sam? Because when you think about, like, if you take coaches,for example, Having a system and a process or a broad framework will only work for a certain percentage of people. And you have to be more, you have to think more broadly than that, and you have to operate more broadly than that. So putting yourself into a box is very, very limiting for those business types. Yeah. and I think that was the really freeing thing when you and I got Matt Church onto the show last year or the year before. Yes. And he was talking about thought leaders. And you and I are more definitely thought leaders than a traditional business because we operate alone. Yes, we get help from virtual assistants and so on, but we are the business. We are a personal brand. AndThe value in the business is us. It's our ideas, it's our expertise, it's our experience and how we bring that to our clients. And yeah, we do not intend to sell the business. We're not trying to build value into the business to sell it on because it's founder dependent and no one will buy a business that has our personal branding all over it. Yes, personal branding does not fit the Gerber model at all. No. and so the purpose of a solopreneur or consultant, coach, thought leader is high personal income through expertise and reputation. The business cannot be sold, so wealth must come from earnings and it's founder dependent. So yeah, and I know Matt Church used to always say, you want to be earning three times. So if you want to actually be building wealth actively that's going to support you into retirement, you need at least 20K a month, of which you're putting away a third into wealth building assets, you know, appreciating. Yeah, so, and because the other thing I learned from him, I see it everywhere now, but the three to one rule in business, if you want to earn 20K, pay yourself 20K a month,salary, then you have to earn 60k in revenue, which is the reality in small business, isn't it?Because I get a lot of people coming to me saying, okay, so I want to make 100,000 by within 12 months. Okay, well, that means you're going to have to make 300,000 by the time you've paid your taxes, your super, your operating expenses. Yeah. And that's not really realistic within 12 months if you're starting from scratch, you know, so. so that was another thing that I got from him. As a thought leader, you need to be earning enough because you can't sell the business later. You've got to get to the point where you're earning enough so you can put money aside to build a wealth building portfolio. So that's what you are aspiring to and helping a lot of our clients to do. Yes. Yeah. And the other thing I loved about Matt Church was his clusterapproach, which was, remember he talks about you have a cluster, you have a market that needs, that has a problem and you provide a solution to that market. And all business coaches until now for us had said, you need to have a clear, you need to have a niche and that niche has a problem and you can solve it. And then when Matt said,you want to build up to six different clusters, you and I just went, oh. I know, it was so exciting to hear that. Because for people like you and I, we don't want to be, I'm going to use the analogy again, we don't want to be put in a box. And that was very, very freeing to think that we could explore 6 different avenues. Yeah, and if everybody out there is telling you,pick one lane and just stay in it. Exactly. And the other thing that I love that he said is expect a 50% failure rate. Start up a cluster and it may or may not work. And previously, you get so attached to this niche and this market that you and then you put your build your whole business around it and then it fails. Whereas he's like, no, I expect that half of them are going to fail. So out of those six you try, only three will stick and probably last. And even then, they need to pivot and be agile and evolve as the market evolves. So if you have a system locked in place or a process locked in place for that, it wouldn't, you wouldn't, it's not agile enough to fit that model. No. And I think that's the problem with systems thinking is that people think that systems and processes are set and forget. And they're anything but. Always evolving. Yeah. so with a solopreneur or even I know some solopreneurs with a small support team, whether they have a marketing person or an assistant that helps them deliver workshops and so on, it's still they are the thought leader that people, they are the brand. And in that case, yeah, the Gerber approach does not really apply. Yeah, so that's interesting. And then the final one that I have here is the socialenterprises and the not-for-profits. So they are out to achieve a positive social, cultural or environmental impact while being financiallysustainable. So they're mission driven and all profits that are made are reinvested back into the business to further the purpose rather than being distributed to shareholders or someone as in a. Yes, and there are 100% businesses that aren't created as assets to be sold. Yeah. Yeah, that's right. And I've met several founders of not-for-profits and they're so passionate and they arethe businesses, and what I do love about not-for-profits, I met two young guys, I helped them run a strategic marketing, sorry, strategic business planning workshop a couple of years ago, and they were providing a mental health service for 20-year-olds by 20-year-olds. So it was a community and a space where everyone felt safe to talk about mental health issues. And they were doing really well. And they were paying themselves a salary. So the idea in a not-for-profit, isn't it, that you pay yourself a salary and then, and they're at the point where they were doing so well that they wanted to ask the board for a raise. So they got a pay rise. And I just thought, that's beautiful incentive. They've poured their heart, soul, heart and soul into this business. And both of them had history with friends that had committed suicide. And that's why they were so passionate about this. And they really tapped into something in the market because their community on Instagram went to 11,000, like within a few months. Yeah, it really spread. And the fact that they were able to give themselves a pay rise, I said, oh, that's really lovely. And then anything that they make on top of that, obviously they put back into fundraising or put into community initiatives and so on. So yeah, that's a great business model if you, yeah, if you're if you're purpose driven. Yes. And I think some of us in small business would love to pay ourselves that kind ofway. That's the biggest challenge, isn't it?As a small business owner is riding the waves of the market and actually paying yourself what you want to. Yeah. Which not a lot of people talk about. But. So that's the five different types, micro business, traditional business, entrepreneurs, solopreneurs and social enterprise and all have different rules. to play, to play by. And it's important to get clear, I think, before you start out, which one am I playing?What's my purpose?What's my intention?And then to seek out resources that match that approach. And yeah, any solopreneurs out there, highly recommend you read Matt Church's book on thought leaders. Yes. Yeah. Yeah. And also, I'm going to throw Simon Sinek in here too. Yes. Just think about in considering which of those five businesses you business models you slot into, think about whether you're playing the long game or you're playing an end game. Oh, okay. Yeah. So I think Michael Gerber is all about the end game, but Simon Sinek is all about the longgame. What's and what does he mean by the long game?Well, Simon Sinek talks about, like with being in touch with your why and things like that and having this, lifelong passion in which you pursue an outcome. When he talks about your why, he talks about it being something that you perhaps won't even achieve in your lifetime. And he talks about business being the conduit in which to achieve that why, but people need to play for the long game and not for the shortterm. So yeah, checkers versus chess. Yeah, And I definitely just so often I'm grateful every day because I get to do work I love. And yeah, it'sAnd that's my purpose, is to enjoy what I do, because my backstory, as most of us know, is that I was so miserable for 15 years in my career that to the point where it made me really sick. And now it's not always easy. In fact, it's quite often very stressful and challenging, you know, being responsible for your own revenue and paying yourself. But it's also so satisfying. AndAnd the fact that I get to do what I want when I want, I just love it so much. And that's why I started my business. And like you, I don't want to build an empire with systems and staff. And I'm just loving being a free agent and adding value where I can and helping other businesses to thrive. So yeah, it definitely all starts out with intent and purpose. Why are you starting this business?Why are you running this business?What do you want to get out of it?And yeah. And I think there are too many business owners that can't answer those questions and they are fundamental. And it's an indicator of perhaps why as a business owner, you may feeling overwhelmed, burnout, or all of those things if you can't answer those really basic questions for yourself. Is that why are you doing this in the 1st place?What do you want out of it?Because if you're not building towards achieving those, you're kind of derailing yourself. Yeah, and like the guy that you mentioned who sold his business on, who couldn't let go, maybe he'd never actually got clear on why he wanted to sell the business. Maybe he was just advised that, okay, you've got to this point, so now it's about selling the business. Whereas maybe he could have taken on a director role and just sit on board decisions or, you know, Maybe he didn't want to untangle completely or... Yeah, look, he was retiring, but what he was communicating to me without saying it, but what I was getting in between the lines was that he had built a legacy business for himself that he had sold without considering that it was a legacy business. And then he was concerned about reputation and service and everything that he had built. and created a reputation on, was scared it was now going to be desecrated by the new owners. Right. Yeah. Whereas if he'd had some way to stay havinginput, that was, yeah, interesting though, isn't it?Yeah. Well, that was an interesting conversation. Did you have any final comments, Sam?No, just tell people that, like, just read, read the book. Read the book and tell us what you think. And my book's coming out early next year is the plan and where I talk all about this because my hope is to give people starting out in business a really clear picture of the journey they're about to go on and shape and that there are different types of business and to help them. Yeah, I think a lot of times it's just going in with clear expectations, isn't it?An understanding of. The journey you're on. Yeah. Don't dismiss the questions about why you're doing things in the 1st place. Yeah. Don't underestimate the importance of knowing that when you start. That's what I think. But I can't wait till your book comes out because that's going to be a great podcast episode. Oh, yeah. Can't wait. Yeah. Just when we dive into your book. Yeah. No, it'll be good. Yeah. Can't wait. All right. Well, thank you, Sam. We hope that conversation was valuable to everyone, and we look forward to speaking to you again soon. Thanks so much, everyone. Bye. Bye.