State of Small Business Report 2025

MEDIA RELEASE: Tuesday, 26 August 2025

COSBOA and Square report finds tech-enabled businesses outpacing digital laggards

Technology adoption linked to stronger small business productivity, sales, and economic contribution

Small businesses make up 97 percent of all Australian enterprises, employ more than 5 million people, and contribute over $589 billion to the national economy. As Australia looks for new ways to lift productivity and long-term growth, enabling these businesses to operate more efficiently is essential.

Square today released the 2025 State of Small Business Report in partnership with the Council of Small Business Organisations Australia (COSBOA), revealing that small businesses embracing digital tools are running more efficiently, selling more, and setting the pace for stronger economic performance across the country.

The 2025 State of Small Business Report draws on survey data from more than 500 small business owners and Square’s transaction insights. It shows that tech-enabled sellers are consistently outperforming those that have not yet digitised. Sellers using Square’s software tools process 94 percent more in sales volume than Square sellers who don’t. Businesses with API integrations process 2.6 times more in sales and nearly twice the number of transactions.

The message is clear. Technology adoption is now one of the biggest levers available to drive small business productivity: from cutting admin to accelerating sales and streamlining customer engagement, digital tools are giving time back to business owners and helping them do more with less.

One business that’s seen efficiency gains from using technology is Jayden Ong Wines in Yarra Valley. For manager Morgan Ong, using tools that are easy to use helps the business to focus on its premium hospitality service. “Being able to onboard staff quickly with Square’s user-interface has meant I can focus more on details of service rather than on mastering new technology. It’s a big time-saver.”

While 85 percent of small businesses are already using at least one digital tool, the report shows investment is still cautious. The majority of businesses planning to upgrade technology expect to spend less than $5,000 in the next year. Many cite the need for practical training, tailored support, and affordable solutions.

When Impact Comics expanded into online sales, reconciling stock and sales became a time-consuming challenge. By using integrated systems, they streamlined operations and reduced hours of manual work.

“Having the Square system means we can sell comics in-store, online, and even at events without juggling different platforms,” said Malcom Briggs, owner of Impact Comics. “Everything ties back together. It used to take hours to reconcile the register with online orders. Now the system does that work for us.”

“This report reinforces what we hear from sellers every day. Productivity gains come from small, consistent improvements, not big overhauls,” said Marco Lamantia, Executive Director of Square Australia. “It’s about tools that reduce friction, remove repetitive tasks, and give time back to focus on what really matters. That’s what we’re building at Square - technology that fits around how small businesses work, giving them time back to grow and focus on their craft.”

The 2025 State of Small Business Report lands as the Productivity Commission releases interim findings showing that digital adoption, including better data access, AI, and small business technology enablement, could significantly boost national productivity.

According to COSBOA Chair Matthew Addison, the shift to digital is not just a recommendation, it is a necessity.

“Technology is no longer optional. If you are still relying on pen and paper to run your business, you are at serious risk of being left behind,” said Addison. “The State of Small Business Report and Productivity Commission both make it clear that digital adoption is critical for lifting Australia’s productivity. Small businesses that embrace modern tools are more efficient, more competitive, and more resilient. This is not just a business decision. It is an economic imperative.”

The report also highlights how customer behaviour is accelerating the shift. More than three-quarters of surveyed businesses now say most of their transactions are cashless. Square data shows rapid growth in tap-to-pay via mobile, particularly among micro and service-based sellers who rely on agility and speed.

As Australia continues to face complex economic conditions, the productivity of small business will be central to national recovery and resilience. The 2025 State of Small Business Report makes clear that with the right tools and support, small businesses are not just keeping up. They are leading the way.

To access the full report, click below.

State of Small Business Report - August 2025.pdf

Download PDF • 9.09MB

-ENDS-

For media enquiries or interviews with COSBOA, please contact Debbie Bradley, Zadro Agency on debbie@zadroagency.com.au or call +61 (0) 420 761 189.

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.

For more information, visit www.cosboa.org.au