Emily Chantiri
Wander around the neighbourhood shopping strips and you’ll likely find many empty stores and derelict shopfronts. Australia’s small businesses are doing it tough.
In November 2025, MYOB’s Bi-Annual Business Monitor study of 1087 small-to-medium enterprises (SMEs) showed 80 per cent of those surveyed said revenue had decreased or remained stagnant. As for 2026, 31 per cent believe the economy will remain the same and 42 per cent reported it would decline.
SMEs reported most of the pressures were in costs of utilities, fuel prices, remaining competitive, cash flow and acquiring new customers.
In the previous MYOB June 2025 report, mental health challenges were a concern for a considerable proportion of business owners, with stress being the most common (43 per cent), followed by anxiety (35 per cent). The level of pressure felt by businesses remained relatively consistent between June and November 2025.
Doreen Brown, founder of marketing company Let’s Get Visible, says the past two years have been the most challenging for her small business since she started in 2017. Costs have increased across every operational area, including software, advertising, insurance, utilities and the general cost of living.
“At the same time, consumers have become more cautious and slower to buy. Decision cycles have stretched out significantly. For providers like myself, this means constantly adjusting projections and being more conservative with planning,” Brown says.
Almost half of SMEs told us they’ve considered closing or exiting their business in the past 12 months.
Matthew Addison, chair, Council of Small Business Organisations Australia
The emotional toll on small business owners is enormous, she adds; they’re managing operations, finances and marketing while navigating constant uncertainty.
“We small business owners are doing everything from delivery to administration to marketing, while also carrying the mental load of financial pressure. Many feel like they’re doing all the right things but still not getting traction.”
This uncertainty becomes exhausting.
“It’s not through lack of effort, ideas or resilience that small businesses are struggling; it’s the operating environment that has become disproportionately difficult.”
Brown said the most immediate support needs to focus on reducing pressure points that drain a small business of time, cash flow and capacity to remain visible and competitive.
“Simplifying compliance and reporting requirements, improving access to small-scale grants and providing tax relief for early-stage growth initiatives would make a significant difference. Ultimately, SMEs need less complexity and more practical support.”
The sound of closing doors
Matthew Addison, chair of the Council of Small Business Organisations Australia (COSBOA) said across the country, small businesses have reported that cost pressures and complexity remain the dominant challenges.
“Through our members we hear rising taxes, labour, insurance, energy and compliance costs are continuing to erode margins, leaving many owners with little room to absorb further shocks,” he says.
COSBOA’s Small Business Perspectives Report found 64 per cent of small businesses recorded lower profits over the past year, and 60 per cent were at times unable to pay themselves.
“For some businesses, this pressure translates into real concern about sustainability. Almost half of SMEs told us they’ve considered closing or exiting their business in the past 12 months.”
Addison adds this is not due to businesses not being viable in the long term, but because costs and uncertainty have made it harder to keep going in the short term.
“The data does show resilience. Most owners remain committed to their staff and communities, adapting through digital tools and efficiency measures. They’re cautiously optimistic about demand improving.”
Small businesses need policies to support resilience, he says: easing the cost of doing business through sensible tax settings, encouraging investment in digital capability, supporting skills and training to lift productivity and grow.
“With these, many small businesses can move beyond survival mode and start planning for the future.”
Minister for Small Business Dr Anne Aly said the government is delivering a range of programs to ensure small businesses are not only supported but have the certainty they need to plan for the future.
“This includes cutting red tape, more funding for small business support provided by the Fair Work Commission and the Fair Work Ombudsman, extending the instant asset write-off and improving payment times to small business,” she said.
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