Survey reveals key challenges for SMEs in Australia & NZ

A recent survey conducted by online payments provider Pin Payments has revealed significant concerns faced by small and medium enterprises (SMEs) in Australia and New Zealand. The survey notably highlighted issues related to cybercrime, the cost of living, and late payments.

The study, which included responses from over 700 participants who are either business owners or hold managerial or executive positions within an SME, aims to offer a snapshot of the current landscape for SMEs in these two countries, shedding light on prevalent challenges and differentiators between them.

Cybercrime emerged as the primary concern for Australian businesses. According to the survey, 72% of Australian respondents expressed fears regarding business fraud, with 43% identifying it as their biggest worry. Despite these concerns, only 36% of Australian businesses reported employing two-factor authentication as a security measure, suggesting a gap in fraud prevention efforts across the SME sector in Australia.

In contrast, the main issue for small businesses in New Zealand was late payments, with half of the respondents marking it as a substantial challenge. Australian SMEs were not far behind, with one in three respondents highlighting late payments as a significant problem.

Economic instability was another major pain point for businesses in both nations. The survey indicated that 76% of Australian businesses and 75% of New Zealand businesses reported being negatively impacted by inflation or rising costs. These economic challenges have led to a decrease in customer spending by more than 60% in both countries. Other contributing factors, such as high borrowing costs and the inability to expand, were also noted.

Chris Dahl, CEO of Pin Payments, commented on these findings, stating, "It is clear to see the real impacts interest rate rises, inflation and increased costs of living is having on small businesses across both countries."

"This has been a growing area of concern for small businesses for years. Post-pandemic businesses haven't had a break, with rising costs crippling opportunities for growth and leading to missed opportunities that impact revenue and, ultimately, business survival," added Dahl.

The Australian Consumer Price Index (CPI) rose by 7.8% in the past year, its highest increase since 1990. "Coupled with the difficulties businesses are already facing, that's concerning for the survival of small businesses which underpin our nation," said Dahl.

The survey also highlighted that 50% of New Zealand businesses reported having no plans to grow or expand, in stark contrast to Australia, where one in two businesses indicated plans to scale.

"It's clear to see from these survey results that New Zealand small businesses have been hit harder than Australia by recent global economic instability. Yet, New Zealand is a nation made up of small businesses, with over five million SMEs, making their survival vital to the country's vibrant culture and GDP," noted Dahl.

Recruitment sentiments also varied between the two countries, with Australian businesses being 27% more likely to hire in 2024 than those in New Zealand.

"There's a lot of uncertainty for small businesses in both countries right now which leads to a halt in innovation and growth. Our nations share a union and often work side by side, with an overlap in businesses and staff. Therefore, the survival and support of the startup and SMB ecosystems in both countries is vital," said Dahl.

The survey concludes that the future of small businesses in Australia and New Zealand will hinge on increased collaboration, comprehensive support, and fostering a vibrant ecosystem for the SME and startup community. Initiatives such as providing better access to funding, implementing robust mentorship programmes, and encouraging innovation through technology adoption are crucial for these businesses' continued success and survival.

Despite challenging conditions, SMEs across both nations have shown remarkable resilience and adaptability in recent years. "Inflation has undoubtedly had a significant impact on small businesses, but with acknowledgment of these challenges and ongoing support, SMEs will continue to overcome obstacles and thrive in the long term," concluded Dahl.