The Pressure Is Building
In 2025, running a business in Australia feels harder than ever. From compliance burdens to skyrocketing wage costs and the pressures of economic volatility, small and medium-sized enterprises (SMEs) are navigating choppy waters. The cost of doing business in Australia has become one of the greatest threats to growth and sustainability – not just for startups, but for well-established companies too.
According to the Council of Small Business Organisations Australia (COSBOA), many businesses are feeling squeezed by increased regulation, rising energy prices, and the cumulative load of administrative tasks. For those without deep pockets or corporate support, staying afloat is becoming more difficult
Rising Costs and Their Triggers
The cost of doing business in Australia is being driven up by several converging forces:
- Increased labour costs: The minimum wage and award wages have continued to rise, placing pressure on small employers who must compete with bigger businesses for skilled staff.
- Compliance overload: From changes to casual employment law to evolving workplace health and safety mandates, regulation is stacking up. The time and cost of simply staying compliant have skyrocketed.
- Rising insurance premiums: Professional indemnity and public liability insurance costs have grown steadily, with some industries seeing double-digit increases.
- Energy and utility price hikes: Many businesses are absorbing significantly higher costs for electricity, gas, and water, especially in regional and remote areas.
- Interest rate pressure: With borrowing costs at a 12-year high, businesses looking to invest or scale face steeper repayments and less flexibility.
Economic Impact: What It Means for Business Growth
The burden of increased operating expenses has a domino effect:
- Profit margins shrink, meaning less capital to reinvest in growth or innovation.
- Staffing plans stall, as businesses hesitate to hire in uncertain financial conditions.
- Mental health impacts escalate, with owners and managers stretched thin by mounting financial and administrative pressures.
This is not just a business problem – it’s a national economic challenge. SMEs employ over 40% of Australia’s workforce. If small businesses can’t thrive, neither can our economy.
The Role of Government Policy
Despite announcements like the $20,000 instant asset write-off extension, many business owners feel recent policy changes have not gone far enough to address the growing cost of doing business in Australia.
New rules on casual employment, increased scrutiny from the ATO on side hustles and contractor arrangements, and tightened superannuation compliance all add up. Well-meaning initiatives can often result in greater red tape, particularly for smaller operators without in-house legal or HR support.
Smart Strategies for Resilience in 2025
If costs are rising and relief is limited, where can business owners turn?
- Lean into automation and tech: Tools that automate admin, reporting, and communication can save time and reduce overheads.
- Review supplier contracts: Regular audits of utility, software, and service providers can uncover hidden savings.
- Consider flexible resourcing: Rather than hiring full-time employees, many businesses are turning to virtual assistants (VAs) to handle admin, marketing, bookkeeping, and more.
Virtual Assistants: A Quiet Advantage for Australia
We promised not to plug outsourcing to virtual assistants until the end, but here’s why they’re worth mentioning.
Virtual assistants offer a cost-effective, compliant, and scalable solution to some of the biggest problems facing Aussie businesses:
- Labour cost efficiency: Filipino VAs, for example, can perform high-quality work at a fraction of local salary costs.
- Administrative relief: VAs take time-consuming tasks off your plate, giving you more capacity to focus on growth.
- Scalability without the risk: Need to grow your team without navigating complex employment law? A VA might be the answer.
As the cost of doing business in Australia continues to rise, business owners must rethink the way they structure, support, and scale. Virtual assistants are no longer a “nice to have” – they’re a strategic lever in the modern outsourcing business toolkit.
Final Thought
The cost pressures on Australian businesses aren’t going away anytime soon. But there are smart, sustainable strategies available. From outsourcing to optimisation, the businesses that thrive will be those who adapt fastest.
Ready to explore how you can do more with less? Download our free guide or book a call to chat about where a virtual assistant might fit into your team.
