What’s really impacting small regional and rural businesses the most?
The release of the inaugural Big Small Business Survey this year has highlighted some key factors impacting Australian small and micro-businesses as we move on from the pandemic. From the state of business owners’ wellbeing to the main cash flow and operations challenges they’re facing; the results are enlightening and sometimes surprising.
Joining editor Cec Busby on the Flying Solo podcast, survey co-author and rural business owner Jenn Donovan broke down some of the most compelling findings, especially how regional and rural small businesses compared to city businesses.
The Big Small Business Survey
The Big Small Business Survey was created by team of five Aussie small business owners and experts passionate about learning more about the Australian small biz landscape. Jenn and co-contributors, David Jenyns, Andrew Griffiths, Katrina McCarter and Dale Beaumont, designed the survey to take a deeper dive into what’s really on Australian small and micro-business owners’ minds in 2023.
“We’re coming off two years of a pandemic and small businesses have changed a lot,” says Jenn. “The way consumers interact with small business has changed, but small business owners have changed as well.
“I am from rural Australia and could see that rural business owners were not being heard and not connecting with the government policies being introduced. We wanted to not only help make businesses feel heard but also perhaps inject some change into what’s happening out there in the landscape.”
What’s impacting Aussie small businesses the most
Jenn explains some of the main revelations from the survey are the significant gaps between the city and regional/rural small business experience.
“Ninety-six per cent of respondents said that their turnover was less than $4.9 million, but in rural and regional areas, the most common turnover bracket was under $50,000,” Jenn reveals.
So, it’s no surprise that cash flow topped the list of concerns for most small business owners.
#1. Cash flow and growth management
Jenn says many small business owners are experiencing cash flow issues because they don’t have enough support or knowledge to make good financial decisions, with the majority looking to cut costs by managing operations themselves.
“Ninety-one per cent said that their costs have increased in the last twelve months, with over a third saying their costs had risen over 20 per cent,” says Jenn. “Yet, only 24 per cent said that they’re passing those prices on to customers. You might assume that is because they’re scared of losing customers but actually, 21 per cent said that they just didn’t know how to raise their prices. That’s a bit of an alarm bell.
“As another example, 80 per cent of respondents said they spend the majority of their marketing time on social media for growing their business, sales and brand awareness. Yet 54 per cent struggle to come up with content, and 45 per cent of them found social media too time consuming.
“Social media is technically free, but I think we all know if it’s for free, you are actually the product,” Jenn explains. “They’re spending a lot of time doing what they think is ‘free’ marketing, but they’re trading time for money. If you spend an hour doing social media but you charge $60 an hour, technically it costs you $60 – it isn’t free.”
Jenn says the cash crunch means biz owners are also seeking out free resources to learn to use new technology.
“Most people are using free resources to learn about new technologies,” Jenn reveals. “The top answers were watching Youtube videos, searching on Google and listening to podcasts. They know that they need to move with the times, and they are willing to do that. But they’re looking for free resources first before they’re looking to hire and pay for the knowledge that’s needed.”
Jenn says the message is clear: if regional business owners can barely pay themselves, it’s no surprise they struggle to seek further education to get ahead in their business, find and pay staff, or take time out for self-care.
“Small business owners need more guidance and help through coaching and mentoring in both government and private sectors,” says Jenn.
Listen to Jenn Donovan on the Flying Solo podcast:
#2. Burnout and overwhelm on the rise
The survey also revealed an ongoing sense of overwhelm for small business owners, with around 23 per cent experiencing some degree of burnout and 58 per cent experiencing a mental health challenge in the last two years.
“Key stressors were not having enough money to provide for themselves or their family, and 10 per cent found it hard to have decent boundaries around work and family. I think that stat was quite astonishing and not surprising, all at the same time,” Jenn admits.
Jenn points out that another key difference between city and regional/rural small business owners is how they dealt with mental health challenges. 21 per cent reached out to fellow business owners to seek advice and help rather than professional mental health services, yet the majority of them were businesses from country areas.
“I think it’s fantastic that small business owners are helping each other and have that community around them to help them through the ebbs and flows of small business, but what is that the result of?” Jenn ponders. “Is that the result of not having a professional to go and see in their regional areas? Is a certain industry taking more graduates or are they not filtering through into country areas?
“I think governments, all the way from federal down to local, need to recognise that there is a mental health crisis going on and build strategies around helping these small business owners.
“Charting that emotional wellbeing journey is going to be very interesting as we do this survey year on year, to see whether burnout was due to Covid-era business changes, or whether it’s actually a thing that small business owners have always experienced, but have never really been asked about it.”
#3. Looking after staff
One of the biggest challenges was finding, retaining and supporting staff in the midst of economic turmoil and skills shortages, with 33 per cent of small business owners experiencing issues finding quality staff.
“When asked ‘what happens if you can’t find staff?’ around 20 per cent said they would have to ask their staff to work longer hours. But far more rural and businesses said they would either have to work longer hours or close their business. It was quite scary to look at that,” says Jenn.
Other pain points were supporting the mental health of their staff and having enough money to pay them, which Jenn says places additional mental health pressure on owners.
“When you employ people, you realise you do have a duty of care and a responsibility to put food on more tables than just your own. That sense of pressure definitely came through as a sentiment in the survey,” Jenn concludes.
“With the majority of people who answered from a rural and regional area turning over less than $50,000, of course that’s why they can’t afford to pay staff, because they’re barely affording to pay themselves.”
Download the full report and give your feedback for what to include in the next Big Small Business Survey at https://bit.ly/SurveyReport2022
Jenn delved into lots more detail around the Big Small Business Survey findings in this episode of Flying Solo. Listen now!
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