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As the price of supplies increases, small businesses are struggling in the market, according to the fintech’s resilience report.
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Majority of small businesses are seeking cost reductions
06 July 2023
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Small businesses are seeking out cost reductions with the rising price of supplies, along with inflation pressures, resulting in expense cutting becoming their number one priority, according to Zeller’s Small Business Resilience Report.
The report, created by Australian business banking fintech Zeller, found 85 per cent of business owners are currently seeking cost-cutting measures and revealed the urgent need for creative solutions to help support growth for small firms.
Director of growth at Zeller, Joshua McNicol, said the report displayed the role the tight economic environment had on small entities.
“The Zeller Small Business Resilience Report reveals the impact a challenging economic environment is having on small-business owners — but we’re encouraged to see adversity breeding opportunity,” said Mr McNicol.
“Australian small-business owners demonstrate a rare breed of determination in adapting and identifying solutions to sustain their business through tough times.
“Through Zeller’s financial solutions, we’re arming business owners with real-time data from their business payments and spending to make smarter decisions to manage their business through the crunch.”
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While 85 per cent of small-business owners sought cost reductions, 42 per cent labelled the increasing cost of supplies and materials as their primary concern.
The report found 80 per cent of small-business owners estimated their supply costs had increased by more than 10 per cent in just one year, while one in five believed their expenses had risen between 20 and 50 per cent.
Zeller said four strategies the report found to help combat rising supply costs were to investigate where the increase was coming from, negotiate with your suppliers, increase your prices, and if necessary search for alternative suppliers.
The report revealed 67 per cent of small-business owners were also concerned about inflation and the impact the rising interest rates would have on consumer spending as it was labelled as the predominant worry for 32 per cent of owners.
The fintech said businesses concerned about reduced spending needed to try and cater to their customer’s capacity by speaking to them, monitoring sales, looking for purchase trends, and identifying top customers.
Zeller said its Contact Directory product could help small-business owners identify their top spenders either through EFTPOS payments or online invoicing so they could ensure they were catering to their needs and offering quality service to drive future sales.
Founded in 2020, Zeller was started to help businesses accelerate their cash flow through integrated tools, to accept payments, manage their finances, and pay recipients quickly.
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