Cost pressures, compliance complexity, and tolls on mental health are among the biggest pressures facing Australian small business owners, according to the 2025 Small Business Perspectives Report.
The report, from the Council of Small Business Organisations Australia (COSBOA) and CommBank, draws on responses from 800 small business owners across Australia.
“This year’s results paint a clear picture of a sector under strain, but not standing still,” said COSBOA Chair Matthew Addison.
“Small business owners are working harder than ever to keep up with rising costs, workforce shortages, regulatory complexity, and the relentless pace of digital disruption. Many are dipping into their savings or delaying their own pay to stay afloat, yet they continue to adapt, innovate and serve their communities.”
“What we’re seeing is not a lack of resilience, but a system that needs to do more to support small businesses.”
Key findings include:
- 64 per cent of small businesses reported lower profits than last year, up from 40 per cent in 2024.
- Owners are shouldering the financial burden with 60 per cent occasionally unable to pay themselves. One-quarter of owners regularly dipped into personal savings to stay afloat.
- 72 per cent said rising business costs are the largest obstacle to growth.
- Compliance is costly, with many owners ranking it among their top five business expenses.
- Almost three-quarters expect costs to increase again over the next year.
- 76 per cent of respondents reported stress or anxiety, and 57 per cent experienced burnout.
- 46 per cent of small businesses using AI said it had improved their business in some way.
- 63 per cent of small business owners are satisfied with their decision to start their business with purpose, independence, and community connection remaining strong motivators.
- 45 per cent of respondents expect customer demand to improve over the next year.
Despite the challenges facing the industry, Commonwealth Bank of Australia (CBA) Executive General Manager – Small Business Rebecca Warren said there was a sense of cautious optimism from small business owners around the country.
“While the operating environment is tougher and more complex than ever, small business owners remain committed to their staff, customers and communities. Their determination continues to inspire us,” said Warren.
“Encouragingly, in my conversations with small businesses, many are telling us they feel more confident about the year ahead. Lower interest rates are beginning to support stronger consumer spending, and for those facing challenges, we’re ensuring they have access to the support and tools they need to keep their businesses running.”
See the full report here.
Photo by Erik Mclean / Pexels.
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Laura Box
