Australian small and medium enterprises (SMEs) are feeling optimistic despite intensifying pressures, according to the latest 2025 Small Business Perspectives report from the Council of Small Business Organisations Australia (COSBOA).
Produced in partnership with the Commonwealth Bank of Australia (CBA), the report reveals the majority of small businesses are feeling the squeeze with ongoing economic and regulatory pressures, yet remain committed to their enterprises, customers and communities.
The report saw 800 small business owners quizzed about their experiences over the past 12 months, with 64 percent reporting lower profits than last year, which is a sharp increase from 40 percent in 2024.
Nearly three-quarters (72 percent) identify rising business costs as the single largest obstacle to expansion, with the same number expecting this to continue over the next 12 months.
Compliance is also proving to be costly, with many business owners spending more than six hours per week on regulatory tasks, ranking it among their top five business expenses.
However, on the plus side, almost half (45 percent) are expecting customer demand to grow over the next 12 months, which reflects cautious optimism about future growth, according to COSBOA.
Nearly half (46 percent) are using AI to improve their business, while the majority (63 percent) of small business owners say they are satisfied with their decision to start their business – citing purpose, independence and community connection as their strongest motivators.
COSBOA Chair Matthew Addison said this year’s results paint a clear picture of a sector under strain, but not standing still.
“Small business owners are working harder than ever to keep up with rising costs, workforce shortages, regulatory complexity and the relentless pace of digital disruption. Many are dipping into their savings or delaying their own pay to stay afloat, yet they continue to adapt, innovate and serve their communities,” he said.
“What we’re seeing is not a lack of resilience, but a system that needs to do more to support small businesses.
“Behind every statistic is a business owner balancing risk, carrying personal financial responsibility and navigating a system that often feels stacked against them.
“With the right policy settings – fairer tax, targeted skills support, digital investment and meaningful red tape reduction – we can shift the outlook for small business from survival to growth.”
This begs the question: What can you do to help support the small suppliers you will need to rely on in the future?
