Small business owners reveal big challenges keeping them up at night

• Cashflow, profitability and the cost of doing businesses remain top concerns for small businesses
• Easing concerns around government policies, work-life balance and fuel prices
• Black Friday and Cyber Monday a boon for small businesses, with overall spending up 23%

Cashflow remains the most significant concern for four in 10 small and medium sized business owners, but challenges around profitability and the cost of doing business are on the rise.

Despite the challenges, the latest SME Business Insights report for Q3 from NAB Economics, released today, highlights easing concerns around government policies, work-life balance and fuel prices, which are providing some relief to small businesses.

Small businesses also benefited from the recent Black Friday and Cyber Monday sales, with NAB merchant terminal data revealing spending over the weekend was 23%* higher than on a normal, equivalent weekend and retailers, cosmetic stores, jewellery and watch stores, bars, pubs and restaurants seeing more sales.

The report from around 600 Australian small businesses also highlights:

• Cashflow is the primary concern for small businesses in Victoria and New South Wales and those in construction, retail, transport and storage, and property services.
• Staff turnover and labour shortages are the most significant challenges for small businesses in Queensland, Tasmania and South Australia and those in business services and health services.
• Profitability is the top issue for small businesses in Western Australia and those in accommodation and hospitality.
• Inflation and the cost of doing business is the biggest issue for wholesalers while government policies and regulation are the biggest concerns for SMEs in finance and insurance.

NAB Business Direct and Small Business executive Krissie Jones said the latest NAB Economics data echoed what she’s been hearing from SMEs when meeting with business owners across the country.

“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,” Ms Jones said.

“While improving work-life balance and easing concerns around government policy are welcome, small business owners tell me these measures can shift quickly, which is why it’s critical to reduce red tape.

“Small business owners remain alive to ongoing risks around cashflow, profitability and access to capital, as well as hiring and retaining staff, which are greater concerns in smaller states and regional areas.”

Colin and Charmagne Moore, who have run their pool and spa business, Country Rubber and Foam, in Tamworth for more than 20 years, have increased their team up to 14 employees to meet growing demand, but say maintaining a qualified and specialised workforce is challenging.

“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.

“We’ve been looking for a store manager for more than two years and still haven’t found one.”

“Instead of just providing funding, policies should focus on skilling people and directing the unemployed to industries that need them most,” Charmagne said.

“Losing trained staff to competitors is a serious financial hit and compensation or support programs for small businesses would be invaluable.”

Notes to editors

• * Estimates taken from NAB merchant terminal data from Friday 29 November 2024 to Monday 2 December 2024 when compared to a similar, non-sale weekend in 2024.
• 2024 Black Friday and Cyber Monday sales were 4% higher than the same period year-on-year (2023 Black Friday and Cyber Monday sales).
• Pre-settlement data has been used to indicate trends and % movements. Final, exact figures are subject to change.
• Separately, in October 2024, NAB released a report ‘Backing our businesses: Unlocking growth for small and medium enterprises’, which detailed the scope of small businesses across Australia, the barriers they identified to success and policy suggestions to meet the challenges.
• That report is available for download on NAB News (PDF, 3MB), opens in new window.