3 July 2023
Discover how entrepreneurs are navigating declining consumer spending and escalating supply costs, and explore innovative solutions to support their growth and resilience.
Zeller, the innovative Australian fintech, has released the inaugural Zeller Small Business Resilience Report, offering valuable insights into the impact of challenging economic conditions on small business owners. Drawing from the experiences of over 600 Australian businesses, the report highlights the adverse effects of declining consumer spending and escalating supply costs. As the majority of small business owners are actively seeking cost-cutting measures, these findings underscore the urgent need for innovative solutions to support the growth and resilience of small businesses in Australia.
Factors Impacting Small Businesses
The report reveals that small business owners face significant concerns in the current economic climate. The rising cost of supplies and materials is the biggest worry for 42% of respondents, while 32% cite reduced consumer spending as their primary concern. These challenges have led to a pressing need for strategies that address cost management and sustainability.
Escalating Supply Costs
Supply costs have witnessed a substantial increase, with 80% of small business owners estimating a rise of more than 10% in the past year. Alarmingly, one in five businesses reported increases ranging between 20% and 50%. The significant surge in supply costs has placed additional strain on small businesses, necessitating innovative solutions to mitigate their impact on profitability.
Inflation and Consumer Spending
Concerns over inflation and rising interest rates affecting consumer spending were raised by 67% of small business owners. These worries indicate the potential ripple effects of macroeconomic factors on the purchasing power of customers. As businesses rely on sustained consumer spending, finding ways to counteract the impact of inflation becomes crucial for their continued success.
Addressing Staff Shortages
The report reveals a positive development regarding staff shortages. Despite the challenges posed by the COVID-19 pandemic, 64% of businesses state that recruiting new staff is now easier compared to twelve months ago. This shift indicates the gradual recovery of the labor market and offers hope for small businesses seeking to rebuild their teams.
Prioritizing Cost Cutting
With 85% of small business owners actively exploring cost-cutting measures, the urgency to find effective solutions is paramount. Strategies include renegotiating supplier contracts and surcharging EFTPOS fees. Remarkably, Zeller’s data shows that over 1 in 2 transactions processed with their EFTPOS Terminal in May 2023 included a surcharge, representing a significant increase of +104% compared to the same month the previous year.
Leveraging Innovative Financial Tools
The Zeller report emphasizes the crucial role of smarter financial tools and technology in assisting small business owners to navigate economic challenges. By offering real-time data on business payments and spending, Zeller’s financial solutions empower entrepreneurs to make informed decisions regarding their cash flow and financial position. This enables proactive management, ensuring businesses can adapt swiftly to changes and enhance overall performance.
Insights from Business Owners
The Zeller report features small business owners who shared strategies they have adopted to mitigate rising costs without compromising product or service quality. Access to smarter financial tools, such as Zeller’s Dashboard, has allowed these owners to gain a comprehensive overview of funds coming in and going out of their businesses. This real-time information enables accurate forecasting and performance measurement, enabling businesses to adapt and thrive in challenging times.
The Zeller Small Business Resilience Report sheds light on the challenges faced by Australian small business owners in an increasingly uncertain economic landscape. However, the report also highlights the resilience and determination of these entrepreneurs in finding innovative solutions to sustain their businesses. By leveraging financial technology and tools, small businesses can better understand their financial position and take proactive steps to manage costs and navigate economic downturns successfully. As the landscape continues to evolve, supporting small businesses with tailored financial solutions will be critical to their long-term growth and resilience.