A new State of Small Business Data Report, released today by Square and The Council of Small Business Organisations of Australia (COSBOA), shows Australian SMBs and micro businesses struggling to maintain resilience in the face of tough economic headwinds, with small business owners looking to policymakers and government for more support.
Key Findings:
- Square data shows Aussie micro and small businesses recovered more slowly than their mid-market peers in the first half of 2024
- Over the past year, 46% of SMBs have increased prices, and 1-in-5 have streamlined operational processes and changed their approach to marketing or social media in order to cope
- Almost half (49%) of SMB owners are feeling less optimistic about the Australian economy in the next 12 months, and are calling on policy support from the Federal Government.
Marco Lamantia, Executive Director, Square Australia said “There’s no doubt that small businesses have been navigating an incredibly difficult period, but what cannot be underestimated is their adaptability and resilience in the face of adversity, and utilising technology to overcome economic hurdles. This is reflected in part by findings from the report which show that hospitality businesses using Square technology experienced a steady increase in spending, which slightly goes against recent discourse that hospitality businesses are struggling across the board and one in 11 hospitality businesses (9.1%) may fail over the coming year.”
Data from millions of transactions processed on Square between January 2023 and June 2024 reveals a two-speed economy in Australia, with local micro and small businesses recovering slower than their mid-market peers in the first half of 2024 (compared to the same period in 2023), and businesses growing at different rates depending on their location, sector, and size. For example, mid-market businesses dipped slightly into negative territory in the July and October 2023 (YoY) quarters before recovering to positive growth, whereas SMBs navigated a longer and deeper period of negative growth (graph below).
Square data also shows spending across all sectors fluctuating in line with shifting consumer behaviours. Spending through the December-January holiday period pushed small retailers into positive growth after spending the majority of 2023 in negative territory. Health care and fitness exhibited steadier spending patterns than industries like beauty and professional services, which showed marked variability in spending through the period. Interestingly, hospitality businesses using Square saw a steady increase in spending, peaking in the April 2024 quarter, despite well-publicised weakness in the sector more broadly (graph below).