New research from Localsearch has put a spotlight on the trials and tribulations SMEs are facing, as well as the innovative ways they’re adapting to survive.
Localsearch’s 2023 State of Small Business report shows that 1.7 million Aussie SMEs are concerned about inflation and its impact on their business, while 23.6 per cent said they’ve already been affected. An overwhelming 81.3 per cent are concerned about a possible recession affecting their business in the next 12-24 months.
A total of 37.4 per cent of SMEs have attributed the recent business challenges they are facing to adverse economic conditions, including inflation, interest rates, and reduced consumer spending, while 23.3 per cent are attributing labour shortages. Surprisingly, only 19.9 per cent have cited the COVID-19 pandemic as their biggest challenge.
As a means to cope with the economic challenges and achieve growth, 24.8 per cent have implemented cost-cutting measures, while 14.7 per cent are diversifying their offerings to reach new audiences. Government support is also being sought, with 53.4 per cent calling for greater tax cuts tailored to small businesses.
Additionally, 15.3 per cent are advocating for subsidies to facilitate staff training, while 11.3 per cent are pushing for government-backed initiatives to offer skilled workers higher wages. Another eight per cent seek enhanced training opportunities for school leavers, recognising the need for a skilled workforce.
In the technology space, 21.5 per cent of SMEs have fallen victim to fraud or scams. As a means to improve their cyber resilience, 24.5 per cent have expanded their online presence to reach wider audiences and connect with communities, while 22.4 per cent are investing in cybersecurity software and 17.2 per cent are strengthening supply chains by expanding partnerships and supplier lists.
“The State of Small Business report reflects the challenging landscape we’re navigating as business owners,” Terence Watson, co-owner of Balance Mobility, based on the Gold Coast and Tweed, commented. “We’ve found that investing in our employees’ growth and development has been more crucial than ever. We’ve prioritised proactive business planning and adaptability, ensuring our online presence remains robust, and our business model is flexible enough to respond to any challenge. Over the last few years we’ve heavily invested in marketing, from a website to Google Ads we’ve taken every opportunity we can to cement our online presence to future-proof our business.”
Daniel Stoten, Executive Chairman of Localsearch, said he is excited that small businesses are increasingly investing in marketing to help their business through the tough times we’re currently facing.
“From our internal data, we know that marketing practices have a three-to-one return on investment so these are encouraging findings,” Soten said. “We’re actively working with our customers across Australia to implement the most cost-effective marketing strategies to reap the most business reward, while also growing their customer base and online community.”