4 challenges all small businesses face and how to overcome them

- July 5, 2024 3 MIN READ


According to a recent study we conducted of 700 Australian and New Zealand SMB leaders, the biggest concerns for small businesses are cybercrime, the cost of living, and late payments, writes Chris Dahl, CEO, Pin Payments.

As these challenges are navigated, it’s crucial to not only understand them but also to explore effective strategies to overcome them. The past year has been particularly challenging for small businesses, with inflation and rising costs creating a difficult environment for small business survival and success,

So, here are the top issues for SMBs and tips on how to navigate them.

 Four small business concerns and tips to overcome them


Cybercrime was the main concern for Australian businesses, with 72 percent reporting fears related to business fraud, and 43 percent identifying it as their most significant issue. Despite these concerns, only 36 percent of Australian SMBs are utilising two-factor authentication, highlighting a gap in fraud prevention measures.

Tips: Implementing robust security measures, like ensuring you’ve enabled two-factor authentication for your online accounts, is a simple yet effective way to enhance security. Regularly updating software, conducting security training for employees, and using encryption can also help protect your business from cyber threats.

Late payments

In New Zealand, late payments were the biggest challenge, with half of the businesses surveyed highlighting it as a major issue. Late payments can severely impact the cash flow of small businesses, making it difficult to cover operational costs, pay employees, and invest in growth opportunities. When cash flow is disrupted, it can lead to increased borrowing, which comes with additional costs and financial strain. Likewise, one in three Australian businesses also reported late payments as a significant problem. Consistent late payments can create a cycle of financial instability, where businesses struggle to meet their financial obligations and, in turn, may delay payments to their own suppliers, further perpetuating the problem across the supply chain.

Tips: Improve invoicing and payment processes. Utilise automated invoicing systems to ensure timely and accurate billing. Setting clear payment terms, offering multiple payment options, and implementing late fees can encourage prompt payments. Building strong relationships with clients can also facilitate better communication and quicker resolution of payment issues.

Economic instability

Economic factors, including inflation and rising costs, are a major concern for businesses in both countries. A staggering 76 per cent of Australian and 75 per cent of New Zealand businesses reported that inflation and rising costs have negatively impacted their operations. Customer spending has also decreased by over 60 per cent in both regions, exacerbating the financial strain.

Tips: Focus on cost management and efficiency. Conduct regular financial reviews to identify areas where you can reduce expenses. Consider renegotiating supplier contracts and exploring cost-effective alternatives. Diversifying your revenue streams can also help mitigate the impact of economic instability.

Recruitment and innovation

Recruitment sentiments reflect the disparity between the two countries, with Australian businesses being 27 per cent more likely to hire in 2024 compared to NZ. This uncertainty stifles innovation and growth, which are essential for the health of the SMB sector in both nations.

Tips: Invest in talent and innovation. Attract and retain talent by offering competitive salaries, professional development opportunities, and a positive work environment. Encourage innovation by fostering a culture of creativity and continuous improvement. Leveraging technology can also drive efficiency and open new opportunities for growth.

The way forward

Looking ahead, the future of small businesses in Australia and New Zealand will hinge on increased collaboration, comprehensive support, and the fostering of a vibrant ecosystem for SMBs and startups. Key initiatives should include:

  • Better access to funding: Ensuring businesses have access to necessary financial resources to manage cash flow and invest in growth opportunities.
  • Robust mentorship programs: Providing guidance and support from experienced business leaders to help small businesses navigate challenges.
  • Technology adoption: Encouraging the use of innovative technologies to improve efficiency, security, and customer engagement.

Despite the challenging conditions, small businesses across Australia and New Zealand have shown remarkable resilience and adaptability. By acknowledging these challenges and embracing strategic measures, small businesses can overcome obstacles and continue to thrive in the long term.

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