Business confidence is on the up: how to overcome the big challenges

Business confidence was high in June but dipped slightly in August in the latest SMB Business Insights report from NAB.

Trading conditions for Aussie small businesses have been challenging for the past few years. But there are signs that business confidence is increasing.

National Australia Bank’s index of business confidence climbed to +7 in July 2025, up from +5 in June, the highest reading since August 2022.

NAB’s latest SME Business Insights report does show a small dip in business confidence for August 2025, with a decrease of 3 points.

The report also shows that small and medium-sized businesses (SMBs) across Australia are making moves to tackle challenges keeping them awake at night.

What Uncertainty

Data from the Q2 2025 edition of NAB’s SME Business Insights reveals that there are 3 key areas that are currently worrying Aussie small business owners:

Cashflow pressures (44%)
Profitability issues (38%)
Government policies and regulations (37%)

According to NAB’s survey, business owners are responding with ‘grit and innovation’. Half of those surveyed are actively cutting costs and renegotiating supplier terms, while others are ramping up marketing efforts (37%), investing in talent (29%), and reimagining pricing strategies (29%) to stay competitive.

But what can your business do ?

Ways to boost confidence

Cashflow, profitability and regulatory worries are major concerns for your small business. But with some strategic and tactical thinking, there are ways to overcome the challenges.

Here are 3 fundamental ways to tackle these concerns:

1. Cashflow pressures:

There are a number of tactics you can use to combat any cashflow pressures.

Switching to e-invoicing will speed up payments and improve your liquidity. Reviewing your pricing can also help, by extending your margins and bringing in greater revenues. Cashflow forecasting is another area to explore, giving you prior warning of any upcoming cashflow gaps.

2. Profitability issues:

To improve profitability, you should regularly review and manage your costs.

A company-wide review of your operational spending helps you find the key areas where expenses can be cut. Reduced operational expenditure means improved gross margins and a better bottom line at the end of the period. With better profits, you have the capital to invest in new equipment, talent and the future of the business.

3. Regulatory worries:

It’s vital to be on top of changing tax legislation, legal requirements and necessary licenses.

You can use free government resources, like the Australian Business Licence and Information Service (ABLIS), to stay compliant. This helps avoid potential penalties and ensures you meet all your legal requirements as a small business.

The ATO also offers a free Tax Time Toolkit for small businesses that helps you stay compliant with all the relevant business taxes, including new tax measures and digital requirements.

Want help with your strategy

The fundamental challenges of trading are not going away any time soon. But by updating your strategy and tactics, you stabilise your financial foundations and remove some of the worries.

We work with you to review strategies, operational spending and regulatory compliance, helping to reduce concerns and boost your business confidence.

Next steps

We can help with navigating through the changes that may apply to your particular situation. For further discussion, please feel free to contact our office.