What should Australian small businesses expect in 2023?

Global inflation is on the rise, and meteorological departments have already predicted a new batch of droughts, bushfires, and other natural disasters. This has left Aussie business owners anxious about the future — and rightfully so.

The year 2023 is going to be challenging, as both external factors and internal industry trends will change the face of the business landscape.

This is why it’s best for small business owners to prepare beforehand if they wish to survive this storm. We’ll be sharing some of the most important trends coming up in the business landscape and how to prepare your business to deal with them.

 

1. Data Risks & Privacy Issues

Cyber attacks have been a major concern for the past two years. 66% of small and medium businesses around the globe report having experienced a cyber attack in the past 12 months. The majority of these were phishing attacks, resulting in the loss of finances and sensitive data.

2023 is going to be no different. In fact, it’s expected that the frequency of these attacks will only increase as hackers leverage AI and the metaverse to fuel their attempts.

To address the issue, the Australian government will introduce a new set of cybersecurity guidelines. Cybersecurity will become more focused on each individual’s security instead of information security. Companies will have to switch to passwordless security systems and educate staff on how to stay safe online.

 

2. Contactless Payments

Aussies are preferring to go all cashless. So much so that the annual Global Payments Report predicts only 2% of all point-of-sale payments will be in cash by 2025.

In light of this, small businesses should arrange a wider range of payment options for their customers. These should include

• EFTPOS machines (supporting contactless cards), such as those offered by Smartpay
• Digital wallets
• QR-based payments
• Online payments

If you find it difficult to arrange all four of these, it’s best to start with an EFTPOS machine. That’s because 99% of Australians carry a payment card, which can include a debit, credit, or contactless card.

But make sure you can accept payments via digital wallets by late 2023 at least. That’s because digital wallets are expected to replace cards of all sorts in the coming years.

 

3. Buy Now, Pay Later

Buy Now Pay Later, also known as BNPL, is a purchase approach that seems to be on the rise in 2023. Australians love it because they can instantly take the product home or avail of a service without paying the full amount. They can pay back the amount over a few months (i.e., in instalments).

Currently, there are 16 companies in the BNPL industry in Australia. The industry will grow further by the end of 2023.

This is both good and bad news for small businesses.

It’s good news because BNPL services can increase sales and improve cash flow for small businesses. By offering customers the option to pay over time, businesses can attract more buyers who may not have been able to afford their products otherwise. Plus, BNPL services typically pay the full price of the product to the business upfront, which helps maintain cash flow.

However, BNPL companies also charge a fee for this service. This fee is usually higher than the average payment processing fee, meaning that you’ll have reduced profits.

 

4. Hybrid Work Arrangements

After the pandemic, hybrid work arrangements are preferred by both employees and businesses worldwide. It helps save office resources, eliminates stressful commute time, and boosts productivity.

Australia is no different — in fact, working from home might be the new normal in areas like the Surf Coast. Knowing Australia is vulnerable to fires and other natural hazards, the hybrid work model can be especially fruitful in this part of the world. Plus, people will get to spend more time with their loved ones and focus on living life rather than merely surviving.

As of 2022, only 22.9 percent of the workforce goes to the office on a full-time basis. This figure is expected to decline shortly as more people prioritise comfort over career, and businesses fully appreciate the efficiency of this flexible work arrangement.

If you haven’t hopped onto the boat yet, it’s time to reconsider and switch to a hybrid work model. It will not only improve your team’s performance but will also save you office resources and time. Plus, you’ll also be able to recruit top talent when offering convenient work settings.

 

5. Conscious Consumers

In recent years, Australians have become more conscious of the impact their purchasing decisions have on the environment and society. Consequently, the majority of consumers are seeking sustainable and eco-friendly products.

A recent survey reports 73% of Australian consumers are willing to pay more for eco-friendly products.

For small businesses, catering to this shift in consumer behaviour can be a challenge, particularly in terms of:

• Pricing: Eco-friendly products have a high production cost. Although Australians are willing to pay a high price for products that align with their values, there’s a limit to how much they are willing to spend. If small businesses price their products too high, they risk losing customers to cheaper alternatives. Hence, catering to conscious consumers may mean reduced profit margins.
• Competition: Larger companies with bigger budgets are able to produce the same sustainable products at lower costs. This makes it difficult for small businesses to differentiate themselves and justify charging a higher price.

 

However, there are steps small businesses can take to address these challenges. For example, they can:

• Create a unique selling proposition highlighting their commitment to sustainability and social responsibility.
• Use energy-efficient equipment.

 

It’s true that catering to conscious consumers will demand a massive amount of effort and some tweaks in your original business plan. But if you wish to win the race and secure customer loyalty, you must start working on it today.

// Branded content