Business costs are climbing fast, and small business owners are caught in the crunch. With rising energy bills, rent spikes, and a shortage of workers, it’s a tough time for Aussie entrepreneurs.
But the 2024 Small Business Perspectives Report, from COSBOA and CommBank, isn’t just highlighting the struggle—it’s also calling for action. The report digs into these challenges and lays out the steps that could help small businesses turn the tide and come out stronger.
Rising energy bills, rent hikes, and increasing insurance premiums are squeezing profit margins, while the search for both skilled and unskilled workers continues to slow down growth. On top of that, nearly half of small businesses haven’t even begun their green energy transition due to financial hurdles. And if that wasn’t enough, cybercriminals are getting more sophisticated, making it harder to stay secure.
The 2024 Small Business Perspectives Report paints a tough picture, but it’s also a call to action. The report urges policymakers to step in and provide the support needed to help small businesses overcome these challenges and come out stronger on the other side. Australia’s small businesses are facing a perfect storm of challenges, according to the 2024 Small Business Perspectives Report. Rising costs, workforce shortages, energy transition struggles, and rapidly evolving issues like AI and industrial relations are putting immense pressure on the sector.
Cost of Doing Business
Small business owners are feeling the heat of skyrocketing operating costs, with over half reporting mental health struggles due to the financial strain. Rising rent, energy bills, and interest rates have led to a cash flow crunch, with many using personal savings to keep their businesses afloat.
COSBOA (Council of Small Business Organisations Australia) is pushing for policy interventions to ease the burden, focusing on lowering energy prices, reducing rental costs, and addressing insurance premiums.
Workforce Woes
A massive shortage of both skilled and unskilled workers is stalling growth for many businesses. With over a third of jobs facing shortages, and many applicants lacking relevant skills, small business owners are struggling to find the talent they need to thrive.
COSBOA is calling for better workforce planning, targeted migration policies, and enhanced support for small business productivity.
Energy Transition Troubles
Small businesses are also grappling with the energy transition, with financial barriers and lack of knowledge making it tough to move towards renewable energy.
While some businesses have installed solar panels or improved energy efficiency, the majority are finding the switch to green energy financially daunting.
AI Concerns
As artificial intelligence evolves rapidly, many small business owners are unsure how to harness its potential safely. COSBOA is advocating for national education and clear regulations to ensure small businesses can adopt AI responsibly without the risks.
Industrial Relations Issues
Changes to labor laws are adding another layer of stress, with small businesses struggling to adapt to new rules about casual employment and contractors. The complex regulations are making business owners hesitant to hire, with almost 90% of small businesses saying they would be less likely to employ under the new laws.
Government Contracts
Despite making up nearly 98% of businesses in Australia, small businesses are missing out on government contracts. COSBOA is urging the government to ensure more opportunities for small businesses to secure these contracts, which make up a large portion of the country’s GDP.
COSBOA CEO, Luke Achterstraat, emphasized that small businesses, which employ over 5 million Australians, are under significant pressure and facing economic and regulatory uncertainty. CommBank’s Rebecca Warren noted the critical role small businesses play in both the economy and society, but acknowledged the immense challenges, including inflation, workforce shortages, and the need for investment in technology and cybersecurity.
“Tendering for government contracts is expensive and daunting for small businesses lacking the resources to navigate these systems effectively. To give small businesses a fair chance, the process must be simplified, with less red tape and complexity,” acknowledged Achterstraat.
COSBOA appeals to the government to simplify the process and act on the Small Business Ombudsman’s recommendations to systematically address and remove barriers to Commonwealth procurement contracts. Reflecting The Report’s findings, Luke Achterstraat concluded,
“The reality is this the toughest operating environment in recent memory for small businesses. These are enterprises funded by a mum-and-dad with a mortgage, not institutional shareholders or superannuation funds. If we do not better policies to support the engine room of the economy, we will have less small business, reduced competition and be stuck with higher prices for longer.
“With an election looming, we will continue to advocate for targeted policies that will alleviate business costs, bolster small business sustainability and contribute to the thriving economy where both businesses and consumers benefit. This report should be a wake-up call to policymakers and politicians who seek to support their communities and address the cost of living for their constituents”.
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Small businesses are facing a perfect storm in 2024, with soaring costs, a crippling workforce shortage, and the pressure of an energy transition. News, cost of doing business Dynamic Business
