It’s not often that you are asked to spare a thought for the boss’s finances, but that’s what Money Matters is going to invite you to do.

There has been plenty of publicity over recent years about the struggles of employees trying to keep pace with the cost of living, as businesses have found it increasingly difficult to afford pay rises in different economic times. But what about the boss him/herself? How has he or she fared across these uncertain times.

Self-employed workers earned 20% less in 2014/15 than in 1995

Not very well is the answer, if you believe the results of recently published research into the earnings of the self-employed. It appears that self-employed workers earned 20% less in 2014/15 than they did in 1995, and that’s without factoring in the effects of inflation, which would nearly double that figure.

How has the self-employed community coped? Well, not giving pay rises to their staff for one and cutting their costs, whilst at the same time searching for efficiencies, is the obvious other explanation.

What intrigues me a little more is WHY the self-employed are earning less. Markets have widened – certainly if your product or service can be sold abroad – and interest rates have helped to keep finance costs at record low levels. So surely all the ingredients are there for success?

The research threw up some interesting data, not least of which is that self-employed business people are working a lot less hours than they did 20 years ago. It’s no surprise then that they are earning less; it’s a well known fact that self-employed profits are generated first and foremost from your own hard work.

It appears that the number of self-employed people employing others has also fallen. If that’s going to be your business model, surely it has to be coupled with doing more hours yourself? These two elements just do not make sense put alongside each other.

Red tape and legislation is tying entrepreneurs’ hands

One thing that was not highlighted by the research, but which I believe has had a major impact on small business profits is the amount of red tape and legislation that ties an entrepreneur’s hands. Whether it is health and safety, employment legislation, EU bureaucracy or corporate governance, compliance all costs time and money.

Not all small businesses have seen their earnings and profits fall of course. There are many success stories out there, making money for themelves, rewarding their hard-working employees and investing in the future. They are the entrepreneurs whose examples should be followed by anyone looking to succeed as their own boss.