EOFY Is Over…Now What? Trends Every Small Business Should Track

With the end of the financial year behind us, many Australian small and medium-sized enterprises (SMEs) are taking stock of performance and resetting priorities. The second half of 2025 will present both challenges and opportunities—especially in a climate of cautious consumer spending, shifting technology, and evolving regulation.

Here are the key trends SMEs should keep on their radar.

1. Cautious Consumers, Value-Driven Spending

Australian households are feeling the pinch. According to the ABS, household spending growth slowed to just 1.1% in the year to May 2025, down from 2.6% the previous year. As cost-of-living pressures persist, consumers are becoming more selective—seeking value, not just low prices. For SMEs, this means doubling down on clear customer value, loyalty-building, and smart packaging of products or services.

2. Digital Payments and Embedded Finance

The shift away from cash is accelerating. A recent report by the Reserve Bank of Australia showed that only 13% of in-person transactions were made in cash by late 2024. SMEs that aren’t offering seamless digital payment options—think tap-and-go, mobile wallets, and buy-now-pay-later (BNPL)—may lose out. Expect to see more small businesses experimenting with embedded finance solutions such as loyalty-linked wallets or instant invoicing tools.

3. Smarter Use of AI and Automation

AI is becoming less of a buzzword and more of a productivity tool. From automating admin and customer service to improving inventory management, SMEs are starting to use AI to stretch lean resources. According to CPA Australia’s 2025 SME Report, 38% of small firms are now using at least one form of AI—up from 24% in 2023. The focus is shifting from “nice-to-have” to tools that clearly save time or boost margins.

4. Hiring Stays Tight—But Skills Matter

Despite a cooling labour market, skills shortages remain in key areas like digital marketing, data analysis, and trade services. Many SMEs are responding by upskilling existing staff and investing in more flexible, hybrid work arrangements to retain talent. Government support such as the Skills and Training Boost (available until 30 June 2024) may help—but businesses should act now to futureproof their teams.

5. ESG Expectations Are Rising

Environmental and social impact is increasingly important to customers and supply chains alike. Even small businesses are feeling the pressure to report on sustainability or demonstrate ethical practices. Whether it’s reducing packaging waste or sourcing local materials, SMEs that lead with purpose will have a competitive edge.

Looking Ahead

The rest of 2025 may not bring explosive growth, but for agile SMEs, it offers a chance to refine systems, strengthen customer relationships, and invest in long-term resilience. The key is to stay informed, stay adaptable, and stay focused on the value you bring.

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