Small and medium-sized business owners across Australia are grappling with mounting challenges, particularly around cash flow, profitability, and the rising cost of operations.
The latest SME Business Insights Report for Q3 from NAB Economics sheds light on these concerns, while also highlighting some areas of relief.
Cash flow continues to be the primary issue for 40% of small business owners, especially in New South Wales and Victoria. Sectors such as construction, retail, transport, and property services are feeling the pinch most acutely.
“Small business owners are incredibly resilient, but they’re already stretched and continue to face persistent and emerging challenges that are keeping them up at night,” said Krissie Jones (pictured above), NAB business direct and small business executive.
Labour shortages and staff turnover remain significant challenges, particularly in Queensland, Tasmania, and South Australia. Business services and health services sectors are especially impacted, NAB reported.
Colin and Charmagne Moore, who run a pool and spa business in Tamworth, shared their frustrations.
“Post-COVID, there’s just so much work available in our area. If someone is reliable and has good organisational skills, they get snapped up quickly,” Colin said.
“Instead of just providing funding, policies should focus on skilling people and directing the unemployed to industries that need them most,” Charmagne said.
Profitability is the top issue for businesses in Western Australia, especially in accommodation and hospitality. Wholesalers, meanwhile, are most impacted by inflation and operational costs.
Despite these hurdles, some positives emerged. Black Friday and Cyber Monday sales gave a significant boost, with NAB merchant terminal data showing a 23% increase in spending compared to an average weekend.
Business owners are calling for targeted policy changes, including skilling initiatives and financial support to offset staff turnover.
“Losing trained staff to competitors is a serious financial hit,” Charmagne said, emphasising the need for compensation programs for small businesses.
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