Small business resilience tested amid ongoing pressures

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COSBOA and CommBank release 2025 Small Business Perspectives Report

The Council of Small Business Organisations Australia (COSBOA) and CommBank have today released the 2025 Small Business Perspectives Report, revealing that while small business owners remain determined and optimistic about the future, their capacity to absorb ongoing economic and regulatory pressures is being tested like never before.

Drawing on the voices and experiences of more than 800 small business owners across Australia, the report shows that cost pressures, compliance complexity and personal toll continue to weigh heavily, yet persistence and purpose remain strong.

“This year’s results paint a clear picture of a sector under strain, but not standing still,” said Matthew Addison, COSBOA Chair.

“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:

Profits have fallen: 64% of small businesses reported lower profits than last year, a sharp increase from 40% in 2024.
Owners are carrying the financial burden: 60% could not pay themselves at least occasionally, and one-quarter regularly dipped into personal savings to stay afloat.
High operating costs are the biggest barrier to growth: 72% said rising business costs are the single largest obstacle to expansion.
Compliance is costly: Many owners spend more than six hours a week on regulatory tasks, ranking compliance among their top five business expenses.
Rising costs will continue: Almost three-quarters expect costs to increase again over the next 12 months.
Mental health impacts are at alarming levels: 76% reported stress or anxiety, and 57% experienced burnout.
AI is driving efficiency gains: Of the small businesses using AI, 46% said it had improved their business in some way.
Business satisfaction remains strong: 63% of small business owners are satisfied with their decision to start their business – purpose, independence and community connection remain strong motivators.
Confidence is returning in customer demand: Nearly half (45%) expect customer demand to improve over the next 12 months, reflecting cautious optimism about future growth.

The report also highlights persistent challenges around workforce shortages, high wage expectations, and the time pressures that limit growth and innovation.

“Behind every statistic is a business owner balancing risk, carrying personal financial responsibility, and navigating a system that often feels stacked against them,” Mr Addison said.

“With the right policy settings – fairer tax, targeted skills support, digital investment and meaningful red tape reduction – we can shift the outlook for small business from survival to growth.”

Reflecting on the findings, Commonwealth Bank of Australia (CBA) Executive General Manager – Small Business, Rebecca Warren, said she is hearing a sense of cautious optimism from small business customers across 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,” Ms Warren said.

“We’re proud to advocate alongside COSBOA on our shared goals to reduce friction, build resilience and unlock productivity for small businesses. Whether through smarter regulation, digital capability programs, or better access to finance, we’re focused on practical measures that make a real difference.

“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.”

COSBOA will continue to champion policies that strengthen Australia’s 2.5 million small businesses – from lowering the small business tax rate and simplifying compliance, to investing in skills and digital capability through programs such as Cyber Wardens.

“Small businesses are not just economic contributors; they are employers, innovators and community leaders,” Mr Addison said.

“With the right support, they will continue to power Australia’s prosperity and shape our nation’s future.”

Download the full report below.

-ENDS-

For media enquiries or interviews, please contact Matthew Addison, Chair, COSBOA on chair@cosboa.org.au or call +61 (0) 421 553 613.

About COSBOA

Established in 1979, The Council of Small Business Organisations Australia (COSBOA) is a member based not-for-profit organisation exclusively representing the interests of small businesses. The capability, representation, and reach of COSBOA are defined by a mix of over 50 national and state-based members. COSBOA's strength is its capacity to harness its members' views and advance consensus across policy areas common to many.

Our member organisations work with the COSBOA team to assist us with policy development and guide our advocacy - not just for small businesses but also for the benefit of the Australians they employ. In this capacity, COSBOA makes submissions and representations to the government, including its agencies, on issues affecting small businesses and to pursue good policy.

About the Commonwealth Bank

The Commonwealth Bank (ASX:CBA) is one of Australia’s leading providers of personal banking, business and institutional banking and share broking services. With more than 16 million customers and a history spanning more than a century, the Group’s purpose is to ‘build a brighter future for all’. For more information on Commonwealth Bank, visit www.commbank.com.au.