Yet another survey has found the rising cost of doing business to be the biggest issue that small businesses are facing right now.
Almost half (44.9 per cent) of respondents to the latest BIG Small Business Survey reported increasing costs as a key challenge. One in five (18.3 per cent) said that price increases were “severely” impacting their business operations and profitability.
Respondents to the survey – which looks at the shifting challenges faced by small-business owners nationwide – also noted the areas where price increases were most severe. They mentioned insurance, utilities, rent, and wages as being some of the steepest expenses right now.
Hesitancy to increase prices
Despite soaring business costs, owners are largely reluctant to transfer the burden onto customers.
Only 15.6 per cent of respondents said they had a strategy in place to increase prices. Some were actively opposed to the idea – 10 per cent said they had no plans to make their products and services more expensive.
Solutions
What else can be done to lighten the business-cost burden?
According to the survey, tax expenses were a major business cost for many small-business owners, and one of the major ways they said that the Government could help Australian enterprises.
ISB recently spoke to a number of small-business owners on which tax changes would really impact their businesses. Regardless of the tax, the common theme was that small-business owners wanted more concessions made for companies of their size.
“Small businesses under 20 employees that are service-based see their GST and PAYG tax components being over 12 per cent of their revenues each month,” said business coach Tom Adam. “The time has come to consider a scaled GST system to give small businesses a break.”
Tenacity through technology
The BIG survey highlighted technology adoption as one of the strategies that small-business owners are using to keep costs under control.
The majority (63.6 per cent) of respondents viewed technology and AI tools’ impact positively. Many said that they were looking to increase their AI knowledge, with 46.6 per cent currently educating themselves on this technology via online resources.
Businesses are also turning to AI to bridge the gap in employees, with skills gaps and vacancies another key issue facing small-business owners today. The BIG report found that 38.4 per cent of business owners were struggling to find qualified candidates. Meanwhile, increased labour costs were impacting 41 per cent of businesses.
Despite these challenges, recent reports have seen small-business owners more positive this year. As business owners battle on, major parties are also courting their votes in the lead up to this year’s federal election, with the LNP announcing tax incentives and Labor recently bolstering SME support services.
This article was first published on sibling website Inside Small Business.
