The cost-of-living crisis is hitting all Australians hard, but for small businesses it hits twice as hard, as they navigate pressures on their personal finances paired with the business impact of a decrease in discretionary consumer spending, writes Helen Lea, Chief Employee Experience Officer, MYOB.

But small businesses are the lifeblood of our economy, and, according to a recent consumer survey commissioned by MYOB, the majority of people recognise this. 84 per cent of respondents agree that supporting small businesses in the Federal Budget is key to drive economic recovery and avoid a recession.

The role of small and medium enterprises in the Australian business landscape can’t be ignored

Making up 99 per cent of Australian businesses and employing millions, they play a crucial role within our communities and contribute $700 billion annually to our GDP.

Consumers understand the importance of supporting local small businesses, with 80 per cent of respondents saying they’re more conscious of spending their dollars locally in this economic climate. However, this consumer approach needs to be paired with strong and supportive policies from the Government that empower SMEs to thrive in tough times. Because while people might be aware of supporting their local businesses, they’re also more reluctant to spend.

Our survey found that 88 per cent of people have already adjusted their spending, most commonly cutting back on entertainment and events (54 per cent) and on meals out and food delivery (51 per cent). On top of this, 31 per cent are saving for the possibility of a recession, so their money is staying in the bank, rather than helping bolster the bottom line of businesses.

Whether it’s choosing to make their coffee at home rather than frequenting their local café, or sticking with what’s already in their wardrobe rather than making new season purchases, belt-tightening across the nation means small businesses have to work harder for every dollar.

To support our small businesses and bolster the economy, we need policies that help businesses work smarter. Whether that’s in the way they hire and retain workers, streamline their processes, or grow their customer base.

Supporting small business digitisation is crucial

One thing we know for sure, the small businesses that embrace digital processes, tools and strategies are 50 per cent more likely to grow their revenue, eight times more likely to create jobs, and seven times more likely to scale, so support for getting small businesses online and digitising their processes is of utmost importance.

Our survey respondents agreed, with 46 per cent noting that Budget measures such as subsidies to get small businesses online and using digital products assist small businesses to keep the economy growing.

This time last year, we welcomed the Government’s announcement of the Technology Investment Boost and the Skills and Training Boost, both of which were designed to help small businesses digitise through investment in technology and upskilling of their people. But as yet, these have not yet been legislated, so SMEs are waiting to take action off the back of these measures.

Helping Australia’s 2.5 million small businesses and the 7.4 million people they employ with better access to digital tools and skills will underpin a more resilient economy.

Each year, Budget time presents an opportunity for the Government to show its commitment to SMEs. Because with this support will come a confidence boost for business owners, especially those who might be currently sitting on the fence when it comes to investing in new tools or skills to future-proof their business.

The right polices compel business owners to take proactive action with confidence, and get our economy moving in the right direction.

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