Concerns regarding cashflow rose from 34 per cent to 43 per cent from the same period last year, with profitability concerns rising from 30 per cent to 38 per cent, making these the biggest issues faced by small business owners. 

Forty-eight per cent of those in the retail industry cited cashflow as their biggest concern through the report.

The report found worries around inflation eased from 33 per cent to 30 per cent, concerns around staff turnover had decreased from 35 per cent to 29 per cent, and worries regarding red tape was down from 35 per cent to 27 per cent.

The survey also found that 50 per cent of small business owners were cutting costs and seeking better terms with suppliers to address these concerns. 

Nearly 37 per cent of small business owners were planning to increase marketing efforts and 29 per cent were reviewing their cashflow and working capital processes. 

Twenty-eight per cent of business owners were changing their pricing strategy and investing in training employees, with 28 per cent improving customer communications and management. 

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The Student and Small Business Cyber Risk Project, supported by the Victorian Government, partners Victorian TAFE students who are enrolled in a cybersecurity qualification with an industry mentor and small business in Victoria to conduct cybersecurity risk assessments wherein the small business will receive a report with steps they could take to improve cybersecurity in their business.

“A lot of smaller companies struggle with a lack of skills or understanding of where to start when it comes to cybersecurity,” said Mark Anderson, National Security Officer at Microsoft Australia and New Zealand. “In many cases, taking a few simple steps can be enough to protect against 99 per cent of cyber threats. It’s been great to be involved in this unique and highly scalable program, which is contributing to strengthening our nation’s cybersecurity defences.”

The Australian Signals Directorate’s recent Annual Cyber Threat Report noted that the average cost per cybercrime reported for a small business has risen by 15 per cent year on year, to $46,000 in 2023. Further, research from NAB shows that only 15 per cent of SMEs in Australia conduct extensive training around scams and other cyber risks, while only four in 10 felt that they were vigilant around their cybersecurity.

“As Australia’s largest business bank, we feel a deep responsibility to support the small-business sector,” Sandro Bucchianeri, Chief Security Officer at NAB, said. “They are a huge driver of economic growth, employing two in every three Australian workers. Yet, they remain one of the most vulnerable communities to cyber attack, as they continue to face increasing costs of goods, ongoing labour shortages and rising rates of cybercrime. Initiatives like these will help the small business sector respond if they are caught up in a hack.”

The Victorian Government has invested approximately $400,000 in the program, with in-kind contributions from other stakeholders taking the program’s value to nearly $1 million.

“The Allan Labor Government is proud to invest in exciting projects that enhance Victoria’s high reputation as a leading digital economy,” Minister for Skills and TAFE, Gayle Tierney, said. “The Student and Small Business Cyber Risk Project is a great example of government and industry working together to ensure Victoria has the skilled workers needed for in-demand industries like cybersecurity.”

Dominic Schipano, National Executive Officer at CITT, pointed out that the scheme is industry-driven, industry-based and built in conjunction with organisations who know cybersecurity and Australia’s small business sector.

“The program empowers TAFE students in Victoria on their journey to build a rewarding career in cybersecurity with not only a qualification but also valuable on-the-job experience,” Schipano said. “At the same time, it gives Victorian small businesses access to skilled and employable talent who will help them better understand cybersecurity within their business.”

CITT is managing the program and is closely supported by Microsoft and NAB, alongside the Victorian TAFE Network, The Victorian Small Business Commission and Victorian Skills Authority, while Microsoft developed the program’s learning resources, and alongside NAB, has provided mentors and facilitators who supervise the students during their placement with the participating small businesses.

“Cybersecurity is a team sport and we all have a role to play,” Anderson stressed. “This program is a great example of the impact that public-private partnerships can have in fortifying our nation’s cyber defences, and paving the way for a safer digital landscape.”

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The reminder comes as a Reserve Bank of Australia (RBA) survey shows the number of cash payments made by Australians halved in the three years to 2022 – from 32 per cent to 16 per cent of all in-person transactions. Overall, cash made up just 13 per cent of all payment transactions by number in 2022.

The advent of the National Payments Platform – or the system that allows fast payments to occur within minutes – has further changed peoples’ expectations of how everyday transactions should occur.

In response to this trend, the survey found that over one-quarter who indicated to the RBA they would suffer a “major inconvenience” or “genuine hardship” if cash was hard to access or use.

“Business is already responding to this challenge and considering how to better accept digital payments as consumers change their purchasing habits to include everything from online transactions to mobile wallets,” Julie Rynski, NAB Executive Business Banking Metro and Specialised, said. “However, the increasing number of payment channels means there is no one-size-fits-all solution for SMEs adapting to this new environment.”

The NAB states that the key towards addressing the payment option quesrtion is to consider which technologies and payment channels are most suited to an individual business model. In particular, it noted three critical considerations to guide a final decision:

1. Tailor a solution

“Understanding the needs of both customers and third parties involved in transactions is paramount to determining the right payment solutions – as every business has different requirements,” Rynski said.

For example, a business that makes sales through third-party platforms may need a payment infrastructure that is compatible with multiple systems. By contrast, a business that takes over-the-counter payments for small ticket items is most likely to require easy access to branches, a local post office with banking facilities, and a simple merchant terminal. Meanwhile, companies with high turnover – such as fast-food operators – may benefit from packages that include merchant terminals, a payments app and cash collection.

NAB says that an integrated reporting system should be a core component of any package for a group business model, as well as an efficient online banking platform. “In all instances, the aim should be to fashion the right package for each business type and its customers,” Rynski said.

2. Consider cost and access to cashflow

Most banks tend to provide same-day settlement to a business that holds both its merchant’s terminal and business account with them. But for those who hold a terminal with one bank and an account with another, settlement is usually on a next-day basis. The pricing offered by banks can also vary widely in this hotly competitive market, so businesses need to consider all options.

Another thing to consider is if a customer pays online, how quickly does that money hit the business account or if another pays via a merchant’s terminal, how long it takes for the cash settlement to complete.

3. Have a contingency plan

All businesses are advised to have a backup in case a merchant terminal goes down due to an outage, or there is another technical issue that could cause a potential loss of sale. For SMEs, this ould be as simple as a contactless solution that allows users to operate a phone as a payment terminal or an electronic fallback capability that enables merchants to continue trading up to a predetermined amount in the event of an outage.

Such solutions are on offer with no up-front setup cost and don’t require a separate terminal. Same day settlement is still provided, and all payments are secure. The lack of minimum contract terms makes it an ideal option for occasional use and the technology has the added advantage of offering data insights that can help establish sales trends.

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