The rising costs of doing business in Australia are putting a strain on small to medium businesses (SMBs). According to the Australian Chamber of Commerce and Industry, the Business Cost Index (BCI) rose by 9.1% in the year to June 2023. This is faster than the Consumer Price Index (CPI), which rose by 7.8% in the same period.
The rising costs of doing business are having a significant impact on SMBs. A recent survey by the Commonwealth Bank found that 70% of SMBs are concerned about the rising costs of doing business.
SMBs are taking a number of steps to reduce their costs, including negotiating with suppliers, reviewing their product and service offerings, investing in technology, and outsourcing non-core tasks.
In this article, we will discuss some specific ways that SMBs can reduce their costs while surviving the rising costs of doing business in Australia.
1. Identify your biggest expenses. The first step is to identify your biggest expenses. This will help you to focus your efforts on the areas where you can make the biggest savings.
According to a recent survey by the Commonwealth Bank, the top five expenses for SMBs in Australia are:
2. Negotiate with your suppliers. Once you know your biggest expenses, you can start negotiating with your suppliers for better deals. This can include things like negotiating lower prices, longer payment terms, or discounts for bulk purchases.
3. Review your product and service offerings. Take a look at your product and service offerings and see if there are any areas where you can cut costs. For example, you could discontinue slow-selling products or services, or you could bundle products and services together to offer better value to your customers.
4. Invest in technology. Technology can help you to streamline your operations and reduce costs. For example, you could invest in accounting software to help you manage your finances more efficiently, or you could invest in customer relationship management (CRM) software to help you improve your customer service.
5. Outsource non-core tasks. If you have tasks that are not essential to your core business, consider outsourcing them to a third-party provider. This can free up your time and resources so that you can focus on the things that you do best.
6. Reduce your energy consumption. Energy costs are a major expense for many SMBs. There are a number of things that you can do to reduce your energy consumption, such as installing energy-efficient appliances, turning off lights and appliances when they are not in use, and weatherizing your premises.
7. Get government assistance. There are a number of government schemes that can help SMBs to reduce their costs. For example, the Small Business Energy Efficiency Program provides grants to SMBs to help them to upgrade to energy-efficient equipment and appliances.