Over the past few months, we’ve been speaking with clients from a wide range of industries — tradies, retailers, medical practices, professional services, manufacturers and family businesses. While every business is different, the same concerns keep coming up in conversations.
If you’re feeling a little uncertain about the year ahead, you’re certainly not alone.
Here are the issues that small business owners seem to be talking about the most right now.
Cash Flow Is Still King (Queen)
The biggest concern isn’t necessarily profitability — it’s cash flow.
Many businesses are still dealing with higher operating costs, rising wages, increased insurance premiums, rent increases and higher financing costs. While inflation has moderated, many expenses haven’t come back down. Businesses continue to report pressure from fuel costs and general business overheads.
The reality is that even profitable businesses can find themselves under pressure if cash isn’t arriving when it’s needed.
Payday Super Is Here
With Payday Super now commencing, many business owners are adjusting to a new way of managing cash flow.
For businesses that have historically relied on quarterly superannuation payment cycles, moving to more frequent payments can create additional cash flow pressure and require new payroll processes.
The businesses that have planned ahead are generally feeling comfortable. Those that haven’t may be finding the transition more challenging.
Finding and Keeping Good Staff
Labour shortages remain a major challenge.
Business owners continue to talk about:
- Recruiting skilled employees
- Retaining good team members
- Wage pressures
- Training and productivity
Many employers are finding that attracting and keeping quality staff requires more than simply increasing salaries. Flexibility, workplace culture and career development are increasingly important factors.
Customers Are Spending More Carefully
Consumers are still spending, but they are becoming far more selective.
Retailers, hospitality businesses and other discretionary service providers are reporting that customers are taking longer to make purchasing decisions and looking harder for value. Businesses relying on discretionary spending appear to be facing the greatest challenges.
This doesn’t mean opportunities aren’t available — it simply means businesses need to be even clearer about the value they provide.
Regulatory and Tax Changes
Many of our discussions with clients are centred around keeping up with change.
Topics generating significant interest include:
- Payday Super
- Trust taxation proposals
- ATO compliance activity
- Instant Asset Write-Off measures
- Business tax reforms announced in recent Federal Budgets
For family-owned businesses and groups operating through discretionary trusts, proposed trust reforms are attracting particular attention.
Artificial Intelligence and Cyber Security
Business owners are increasingly asking:
“Should we be using AI?”
The answer is usually yes — but carefully.
Many businesses are investigating how AI can improve efficiency, reduce administration and support growth. At the same time, cyber security concerns continue to increase as businesses become more dependent on technology. Recent business surveys show technology, AI and cyber security are among the top concerns for Australian business leaders.
So What Should Small Business Owners Be Focusing On?
Generally, the businesses that will perform better over the next 12 months are likely to focus on four key areas:
- Strong cash flow management
- Regular review of profitability and pricing
- Investment in people and productivity
- Embracing technology while managing risk
While there is certainly plenty of uncertainty in the market, there are also opportunities for well-prepared businesses. The key is not to wait until a problem appears before taking action.
If any of these issues are affecting your business, now is a good time to review your position and put a plan in place. A short conversation today can often prevent a much bigger problem tomorrow.
Disclaimer: The information contained in this article is provided for general guidance only and does not constitute financial, taxation, legal, or other professional advice. While every effort has been made to ensure the accuracy and completeness of the information at the time of compilation, it may not address the specific circumstances, requirements, or objectives of you and/or your business.