Running a small business in 2025 comes with a unique set of challenges. From rising costs to evolving compliance requirements, Australian SMEs are navigating a complex landscape. Here are seven of the most pressing issues—and practical strategies to help overcome them.
💸 Rising Wage and Employment Costs
With the Superannuation Guarantee increasing to 12% from 1 July 2025, and ongoing pressure to offer competitive salaries, employment costs are climbing.
What you can do:
- Review your staffing structure and consider flexible arrangements.
- Explore technology to automate routine tasks.
- Budget ahead for super increases and payroll tax obligations.
📑 Industrial Relations Complexity
Recent reforms have added layers of complexity to employment law, especially around casual employment, award interpretation, and enterprise agreements.
What you can do:
- Stay informed through Fair Work updates.
- Seek professional HR or legal advice for contracts and award compliance.
- Use workforce management software to track entitlements and hours.
🧾 ATO Debt and Compliance Pressure
The ATO is ramping up debt recovery, issuing more Director Penalty Notices and garnishee actions. Businesses with unpaid GST, PAYG, or super are under increased scrutiny.
What you can do:
- Engage early with the ATO if you’re struggling to pay.
- Keep ASIC records up to date to avoid missing notices.
- Consider payment plans or restructuring options.
🕵️ Cybersecurity Threats
Cyberattacks are on the rise, and small businesses are often seen as easy targets. A single breach can be financially and reputationally devastating.
What you can do:
- Implement basic cybersecurity measures (e.g., multi-factor authentication, regular backups).
- Train staff on phishing and data protection.
- Consider cyber insurance for added protection.
🧠 Technology Adoption and AI Integration
AI and automation are transforming how businesses operate—but many SMEs are unsure how to adopt these tools effectively.
What you can do:
- Start small with tools like automated invoicing or chatbots.
- Upskill your team with digital training.
- Choose platforms that integrate easily with your existing systems.
🕰️ Late Payments and Cash Flow Strain
Late payments remain a major issue, especially for service-based businesses. This affects cash flow and the ability to meet obligations.
What you can do:
- Set clear payment terms and follow up promptly.
- Offer incentives for early payment.
- Use accounting software to automate reminders and track receivables.
🌱 Sustainability and ESG Expectations
Customers and regulators are increasingly expecting businesses to operate sustainably and ethically. SMEs are under pressure to show transparency and impact.
What you can do:
- Start with small changes (e.g., reducing paper use, sourcing locally).
- Communicate your efforts clearly and authentically.
- Look into grants or programs that support sustainable practices.
While 2025 presents real challenges, it also offers opportunities for small businesses to evolve, adapt, and thrive. By staying informed and proactive, SMEs can build resilience and position themselves for long-term success.
