NAB research outlines biggest hurdles for Australia’s small businesses
Persistent challenges are making it for small business owners to run a successful business, a research report reveals.
Small businesses are a vital component of the Australian economy. According to a recent report from NAB, over 99 per cent of businesses across the country are SMEs.
Furthermore, two-thirds of the labour force is employed by these organisations and 56 per cent of the nation’s gross value is attributed to SMEs.
This places a lot of emphasis on the success of small businesses, yet persistent challenges are making this harder and harder.
“These are not new challenges to Australian businesses, but they need new thinking to address them,” NAB Group CEO Andrew Irvine said.
“Businesses, banks, governments and industry groups all need to come together to find solutions and unlock more productivity, jobs and economic growth.”
A major hurdle is the hiring and retention of staff. NAB said that just 52 per cent of small businesses have filled vacancies. This climbs to 59 per cent of medium businesses and 65 per cent of large ones.
To address the talent attraction issues small businesses face, NAB has called for policy changes that improve transparency and accessibility of skilled migration. Another suggestion is to boost the flexibility for awards for SMEs and provide hiring assistance.
Red tape was another prevalent issue, with 60 per cent of small businesses claiming an increase over the last year.
As with all businesses, cyber attacks were a key problem. For small businesses, the average cyber crime losses rose from $30,000 in the the financial year 2021 to $46,000 in FY23.
Emerging technology is creating problems for these smaller businesses as they struggle to keep up with the change. In fact, the key barriers to adopting new tech were:
- Need to have training (48 per cent)
- Don’t have time (36 per cent)
- Don’t understand them (35 per cent)
- Price (32 per cent)
To help our small businesses address these issues, NAB noted how important it is to reduce cost barriers for tech. This could help minimise cyber attacks and keep systems up to date to improve efficiency. Promoting skills and development in the tech space could also help improve adoption rates.
Unfortunately, during a cost-of-living crisis, access to capital remains a major challenge for most of Australia. Small businesses felt the pressure, with 30 per cent reporting heightened difficulty accessing funds. This dropped to 25 per cent of medium businesses and 16 per cent of large ones.
“Small businesses are the heartbeat of our economy, but complexity has added up over time and they’re finding it harder to drive growth,” said NAB Group executive, business and private banking, Rachel Slade.
“As Australia’s leading business bank, we need to use our voice to back business and help find a way through. Small businesses can’t do this on their own – and they shouldn’t be expected to.”
NAB provided some key takeaways that can help support our struggling yet crucial small business market.
- Improve accessibility of Australia’s skilled migration program.
- Continue investing in technologies to streamline regulatory compliance.
- Ease cost barriers to adopting up-to-date cyber security technology.
- Enhance payment times and cash flows.
- Make sure SMEs are adequately consulted in the delivery of the Buy Australia Plan.
- Encourage further action to meet the government’s SME procurement targets.
- Involve SMEs in the delivery of the Digital Government Strategy.
- National stocktake of regulatory compliance for businesses.
