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The rising cost of doing business, red tape and cyber security risks have been flagged as some of the top challenges by SMEs for 2025, a NAB survey has revealed.
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3 in 4 SMEs predict further cost increases this year: NAB
31 January 2025
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7 minute read
SMEs have outlined some of their expectations for the year ahead in the latest NAB SME Business Insights report.
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The NAB report found that the cost of business in 2025 was weighing heavily on SMEs, with 76 per cent expecting the cost of doing business to increase over the next 12 months. Only 2 per cent expected business costs to decrease this year.
The major bank said concerns about the increase in costs were likely to see businesses focus more on areas such as streamlining operations, negotiating with suppliers, reducing energy consumption and managing inventory more effectively.
SMEs also expected the operating environment to be harder for many, with four in 10 predicting the level of red tape affecting their business to increase.
Many businesses were also concerned about cyber security and scam risks with 35 per cent expecting these threats to intensify this year.
“Red tape can hamper the ability of firms to compete, grow and create jobs, while scams, email attacks and malicious software can cost a business a lot of time and money, and compromise sensitive data and reputation,” NAB said.
Despite some of the challenges, a significant proportion expected revenue to remain the same or increase over the next 12 months. Only 19 per cent expected to see a decline in revenue this year.
SMEs were slightly less optimistic about their profitability with only 18 per cent expecting their profits to increase in 2025.
“The findings suggest that while SMEs see ongoing challenges ahead, they also see opportunities and many plan to be proactive about cost-reduction and revenue generation to continue to thrive, grow and adapt,” NAB said.
The report said there were reasons for optimism with the potential for a rate cut around mid-year likely to have an important impact on the psyche of consumers, as well as businesspeople.
With NAB’s latest Consumer Sentiment Survey revealing that four in 10 Australians still expected interest rates to rise, there was plenty of room for an uplift in sentiment should there be rate cuts as the year progressed, the bank said.
The survey also found that four in 10 SMEs planned to increase their investment in technology. Roughly one in three would invest more in artificial intelligence across their business, while 30 per cent would increase their investment in cyber security.
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