- July 31, 2025
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As the new financial year rolls in, many small and medium-sized businesses are breathing a cautious sigh of relief. But beyond the EOFY deadlines, FY25/26 brings fresh challenges—some familiar, others evolving rapidly.
Here’s a rundown of what’s keeping business owners up at night—and how you can deal with the challenges ahead and thrive.
Rising Costs, Shrinking Margins
Between supplier hikes, wage increases, and the superannuation guarantee rising to 11.5%, many SMEs are feeling the pinch. Energy costs and insurance premiums remain unpredictable, and cash flow stress is becoming an all-too-common theme. The recent decision by the Reserve Bank not to drop the interest rate shows that inflation may still be a difficult beast to tame.
Our advice:
- Forecast quarterly, not just annually.
- Explore cost-saving tech (automation, cloud accounting, AI) to free up time and cash.
- Review pricing strategies—don’t undercharge in fear of losing customers.
Compliance: More Than Just Tick-Boxes
The Fair Work Commission’s 3.75% increase to minimum wage has kicked in, and STP Phase 2 finalisation is due. We’re also seeing a jump in ASIC renewal fees and tighter scrutiny on super contributions.
What SMEs should do now:
- Double-check award classifications and STP finalisation accuracy.
- Automate super payments to avoid late penalties.
- Keep documentation tidy—ATO crackdowns are increasing, particularly for cash-heavy businesses.
Staffing Stresses
Recruitment remains a headache. Many owners are juggling multiple roles while trying to retain or attract good staff amidst rising wage expectations.
Smart moves:
- Offering flexible arrangements and training incentives. “Work from home” can be a big incentive.
- Formalising internal policies to be (and be seen to be) fair. Reduce ambiguity and conflict. Be responsive and be quick to defuse tensions and conflict in the workplace.
- Budgeting for regular performance reviews—retention is always cheaper than recruitment.
- Rewarding good workers is always about more than just pay.
Marketing in the AI Era
Marketing is no longer optional—but it’s overwhelming. With dozens of AI tools and platforms to choose from, where should a time-poor SME start?
Tip from us:
- Focus on one or two platforms that you know work for your audience.
- Use simple automation that you understand (Mailchimp, Facebook Marketplace, Adsense, etc, etc, etc! There are hundreds of tools that can help you in all sorts of ways.)
- And don’t forget to track ROI—it’s easy to chase shiny new things that are really cool but miss what actually works.
Owner Well being
One of the hardest conversations we have with clients is about burnout. Financial stress, long hours, loneliness and fear of failure take a toll. In a small business – the owner is by far the most important asset.
You are vital. Look after your self.
- Do periodic health checks (mental health matters too). Are you tense all the time? Do you sleep well? How often do you relax? Stress is not a bad thing so long as it’s not taking over your life.
- Don’t wait until it’s dire—early support means better decisions and better outcomes.
Looking Forward
It’s not all doom and gloom. Government procurement rules are shifting in favour of SMEs, and sustainability grants are growing. Plus, tax incentives still exist for tech upgrades and energy efficiency.
Think about:
- Your eligibility for SME-friendly contracts and tenders.
- Green business practices that save money and boost your brand.
- Updating your accounting system to match your next phase of growth.
- Changing conditions can often present new opportunities.
The world
What will the future bring:
The nature of world trade is changing and Australia is a trading nation. No matter how small you are or how “local” you are – changes in the world economy will affect you and everyone else in Australia. The truth is that no one really knows what is going to happen. Or when. So don’t worry about it. As always, prepare to meet challenges and seize opportunities.
Final Thoughts
FY25 will be what you make of it. Yes, there are changes – but also opportunities. The right guidance, timely advice, and a steady hand can make all the difference.