Australia’s SMBs sound the alarm: Most unpredictable business environment

SYDNEY (Thursday 28th August, 2025): Over half of Australian small and medium-sized businesses (SMBs) say today’s economic climate is the most unpredictable in the last decade, more so than during the peak of the Covid-19 pandemic, according to new research from Dext.

The findings, detailed in Built for Bigger Things - a nationwide study of 500 SMB leaders across sectors, regions, age, size and revenue bands, paint a sobering picture of ongoing instability choking off growth, crippling ambition and clouding strategic vision across Australia’s entrepreneurial base.

“Australia’s small businesses aren’t just weathering a storm, they’re trapped in it,” said Sabby Gill, CEO at Dext. “This research makes clear that small business owners are no longer simply adapting to uncertainty; they’re being paralysed by it. Without systemic support, we risk losing not just jobs or businesses, but the future of Australian entrepreneurship itself.”

A year marked by rising input costs, global trade uncertainty, and changing consumer behaviour has caused over a quarter (26%) of Australian businesses to cancel or delay their growth plans. Around a quarter (23%) report that cash flow struggles, driven by falling revenues, low reserves, and volatile demand, have forced hiring freezes or staff reductions. 

The national unemployment rate rose to 4.3% in June 2025, the highest level since November 2021, due to a sharp decline in full-time roles and a general slowdown in job creation. Meanwhile, 2025 saw record levels of companies entering administration of 14,722 up 33% on 2024 as labour and purchase costs continue to outpace price increases. As a result, over half (54%) of respondents say that long-term planning has become virtually impossible.

Admin burden and poor planning stalling growth ambition 

While macroeconomic pressures dominate headlines, the research shows that internal inefficiencies are compounding the crisis. Many SMBs are still running their finances with outdated tools, overstretched leaders and little strategic planning, undermining their ability to respond with agility, make timely decisions, or seize opportunities in a fast-moving environment.

Over one in five business owners (21%) spend between 21-40+ hours a month on financial admin – the equivalent of nearly a full working week lost to non-revenue generating tasks. Over half (53%) describe this work as “a necessary evil” and more than two fifths (42%) say it drains their energy for strategic thinking and innovation. Alarmingly, 42% say this ongoing battle has made them lose sight of why they started the business in the first place. 

What’s more, it’s holding back growth. Two fifths spend more time stuck in the books than growing their business, 42% have actually missed business opportunities due to being tied up in admin, while over half (55%) believe they’d be better leaders if they could escape the finance admin burden. 

“Australias small businesses are being hit from both sides, external pressures and internal inefficiencies,” Paul Wittich, General Manager of Dext APAC, said. “It’s not just the economy holding them back, it’s the lost hours, limited visibility, and lack of real-time insights. We need to give business owners better tools and better systems so they can get back to leading, not just surviving.”

This drag effect is made worse by the fact that most small businesses are still operating without a robust financial strategy. Fewer than one in five are conducting scenario modelling (19%) or regularly revisiting financial decisions based on new information (26%), and less than a third (30%) are reviewing performance monthly or quarterly using data. So leaders are not only buried in the numbers, they’re flying blind.

Yet few are set up to break the cycle. On average, 31% of Australian SMB financial management is manual. And though many have in-house or external financial support, nearly a third (30%) are still doing it alone or leaning on informal help from friends or family (14%).

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Media contacts

Sofia Cabrera, Senior Global PR & Communications Manager

sofia-louise.cabrera@dext.com 

About the data

The Built for Bigger Things quantitative research study was commissioned by Dext and conducted by Censuswide. It surveyed 500 senior decision-makers at Australian small and medium-sized businesses (1-249 employees) across a range of industries. Fieldwork took place over a two-week period in June 2025.

About Dext 

Dext, part of the IRIS Software Group, is the leading provider of AI-powered bookkeeping automation. Founded in 2010, the company empowers businesses, accountants, and bookkeepers to thrive through cutting-edge artificial intelligence and machine learning technology that simplifies accounting processes and enables smarter, more timely financial decisions. 

Trusted by thousands of professionals worldwide, Dext integrates with major accounting software and connects to over 11,500 banks, suppliers, and marketplaces.

In 2024, Dext joined IRIS Software Group and continues to work directly with its clients to create a more seamless, end-to-end accountancy workflow. For more information, visit www.dext.com.