Australia — We are at the verge of 2024 and will step into a new year in a few weeks. VOLB has spoken about various emerging businesses and their success stories in our journey. We mainly document these achievements for budding business owners to gain confidence and keep their first step with pride. Most business owners would have already created the game plan for 2025. As a part of VOLB, we have discussed with experts from Australia in regards to challenges for any Small and Medium Enterprises(SME) to grow in the present market space. Here are the key challenges they have shared:
Keep An Eye On Australian Employment Laws
Recent reforms in industrial relations, such as a 5.2 percent rise in the national minimum wage; allowing ‘employee-like’ contractors to request Commission intervention for disputes regarding unfair contract terms; banning pay secrecy clauses to tackle the gender pay gap; facilitating multi-employer bargaining; granting employees a legally enforceable right to request flexible working arrangements; and providing 10 days of paid family and domestic violence leave annually, have increasingly strained the resources of small and medium-sized enterprises (SMEs), making it challenging for them to allocate resources for growth and adapt to evolving markets. Research has shown that more than half of Australian SMEs feel that the Industrial Relations Reforms will complicate payroll processes, with many being entirely unprepared for these changes. Additionally, 40 percent reported having difficulty keeping pace with legislative and compliance requirements.
Don’t Depend On Support
Small Business Loans Australia has highlighted that without additional support from the government, numerous small and medium-sized enterprises (SMEs) will encounter progressively tougher situations. A staggering 94 percent indicated that they require more governmental assistance to stay afloat, while 41 percent stated they need financial help to manage wage increases. Furthermore, there was a 39 percent rise in the number of businesses compelled to enter external administration during the 2023-24 period.
Organise Resources
Forty-three percent of small and medium-sized enterprises (SMEs) view the expense of recruiting talent as excessive, while an additional forty-seven percent believe that the hiring process takes too long. Twenty-five percent of SMEs reported that a lack of time and resources was the primary reason they struggled to implement new technology in their operations. Nonetheless, Small Business Loans Australia discovered that sixty percent of all Australian enterprises are either already utilizing AI or are planning to incorporate it within the next two years. SMEs are increasingly embracing AI tools such as AI-driven reporting and chatbots equipped with automated email responses to enhance efficiency and reduce the burden of time-consuming tasks.
Control Cash Flow
SMEs continue to grapple with cash flow issues, worsened by delayed payments that impact three-quarters of these businesses. To complicate matters further, many SMEs tend to prioritize the satisfaction of their customers and clients over their own financial health, which makes them reluctant to pursue overdue payments. Often, SMEs do not have the resources or time to seek out better rates for financial products. Consequently, research indicates that most SMEs end up overpaying when engaging in international trade through traditional banks. A recent study by Money Transfer Australia revealed that 62 percent conduct international transactions via the major four banks, despite typically facing higher exchange rate mark-ups and fees in comparison to specialized money transfer services.
Be Cyber Strong
According to data from Accenture’s Cost of Cybercrime Study, forty-three percent of cyberattacks are aimed at small businesses. The frequency of reported cyberattacks has also consistently increased, with 16,000 more incidents recorded in 2022 compared to 2019. Limited resources are identified as a significant issue, as forty-eight percent of SMEs allocate less than $500 annually to cybersecurity measures.
All these are some of the important challenges for all SMEs to grow in Australia in 2025. The business failure rates are increasing since 2020 and it is the high time to focus on stabilising your business. Please consider all these insights and design your business plan so that you can eliminate the errors in your progress and accelerate success.
