As small business owners, there are countless things which keep us up at night. Wanting to support ourselves and our families. Worrying about marketing strategies, attracting customers, rising prices and reliable staff.
Since I launched my first business almost fifteen years ago, I’ve regularly cycled through all the worries. And easing those fears is one reason I got together with four other small business owners to launch The BIG Small Business Survey in 2022.
We used our newsletters and email lists to get in touch with hundreds of SMEs around Australia to find out your biggest challenges and where opportunity lies. This year we were joined by Pay.com.au as our survey partners to reach more small business owners. We wanted governments and policy makers to hear what the businesses who have been called the lifeblood of enterprise are experiencing. This year’s findings, just released, are fascinating reading.
According to the third annual The BIG Small Business Survey, Australia’s two million-plus small business owners are navigating a transformed landscape as we move into 2025.
As a co-author, I’m going to break down what’s really worrying small business owners in Australia—and the key insights which could help.
This year’s survey highlights a shift in the concerns of small business owners. Previously, the focus was on keeping up with demand, managing workloads, and maintaining mental health.
Now, rising costs top the list of challenges. While fewer than one in five respondents cited costs as a significant issue in 2023, close to half highlighted it in 2024.
Other major challenges include finding the right team members, cash flow management, maintaining work-life boundaries, and understanding the best growth strategies. And as emerging technologies reshape industries, integrating AI and leveraging it for growth has become a pressing concern.
Marketing remains a pain point, with fewer than 10% of business owners reporting they’re worry-free in this area.
Financial challenges loom large, with many expressing frustration over the high tax burden on small businesses. Despite these hurdles, many business owners are moving forward with energy, identifying opportunities with new partners and scaling operations.
“For small businesses willing to adapt pricing strategies in response to rising costs, invest in staff development, and explore partnerships and new technologies, 2025 presents an opportunity to recalibrate for future growth,” said co-author Andrew Griffiths.
This year’s survey was the largest yet, with 646 small business owners from across Australia providing insights into their shifting challenges and opportunities.
Representing diverse industries and demographics, most respondents (69.97%) live in metropolitan areas, 40% report turnovers between $500,000 and $5 million and a third employ fewer than five people.
Five top challenges for small business owners
Staffing
In 2024, 38.39% of respondents reported difficulty finding qualified candidates, a significant increase from 2023. Retaining existing staff remains challenging, with 14.86% citing it as a concern. Additionally, increased labour costs impact 41.18% of businesses.
These workforce challenges are pushing businesses to explore alternative solutions, such as outsourcing, hiring contractors, or offering flexible work arrangements. To bridge staffing gaps, 21.83% of business owners are turning to AI and tech solutions.
“Using AI and technology to enhance productivity can help fill staffing gaps,” said co-author Tracy Sheen.
“Outsourcing to contractors or offshore staff are also solutions that allow a business to meet demand without committing to the costs of a full-time headcount in Australia,” said co-author Jenn Donovan.
Pricing
Close to one in five (18.27%) respondents report that price increases significantly impact business operations and profitability. Insurance, utilities, rent, and wages are among the primary areas affected. While almost half of businesses feel the moderate impact of the cost-of-living crisis, only 15% have a clear pricing adjustment strategy for 2025 and beyond.
The 10.06% of respondents planning to avoid price hikes entirely risk jeopardising their profitability.
“Creating a more efficient business and reducing expenses can be helpful, but increasing prices is essential to stay viable in the face of rising costs,” said co-author Andrew Griffiths. “A strategy is required that considers customer expectations.”
Wellbeing
The survey also explored small business owners’ attitudes toward their work and their biggest stressors. While 58% enjoy the flexibility of running their own business, and over 60% value the ability to choose its direction, mental health remains a critical concern. Over 10% worry about providing for their families, and nearly 12% struggle to maintain work-life boundaries.
“Small business owners need to prioritise their mental health while supporting those around them,” said a co-author. “Greater access to external mental health and wellbeing resources is essential.”
Marketing
Marketing continues to challenge small business owners.
Nearly 45% feel overwhelmed by it, down from 56% in 2023. Key issues include maintaining consistency, understanding effective strategies, and creating quality content on limited budgets.
Almost 40% struggle to keep up with changing marketing trends and technologies, while 43.96% cite consistency as their biggest hurdle. Despite recognising the importance of marketing, close to 50% of businesses spend less than $5,000 annually on promotions. Over half (50.62%) dedicate only one to three hours a week to marketing efforts.
Investing in the right marketing strategies can attract new business and reduce cost and cash flow pressures. One effective approach is partnering with non-competing businesses that share a similar audience to expand reach.
Technology
An increasingly pivotal role in small businesses is being played by technology and AI tools, with over 63% of respondents saying they have a positive impact. On the flip side, around 20% are apprehensive about it.
In 2024, over 15% of businesses used ChatGPT and other AI tools multiple times daily. Adoption of AI is growing, with almost 47% of business owners investing in AI education compared to 40% in 2023.
Regional businesses are more likely to see AI as a solution to staffing shortages.
“As AI becomes increasingly commonplace, businesses that appoint a ‘champion’ who keeps their finger on the pulse of new technology and helps introduce it will be more efficient and productive,” says co-author Tracy Sheen.
Moving forward
As ever, there’s no doubt the small business community in Australia will need its signature resilience, adaptability and innovation to thrive this year. The BIG Small Business Survey 2024 underscores that. Business owners willing to embrace change and recalibrate will have opportunities for success. But we also need support from governments to address the tax burden. It’s crucial for growth and sustainability. Are you listening, decision makers?
You can access the full report at https://thebigsmallbusinesssurvey.com