Table of contents
- Small business inflation: why it still matters
- Headline inflation doesn’t reflect SMB costs
- Major cost pressures in small business inflation
- Corporate pricing power in small business inflation
- Is relief coming soon? Expert inflation forecasts for SMBs
- Practical tips for tackling small business inflation
- Key strategies to thrive despite small business inflation
Disclaimer: The following blog provides general insights on small business inflation in Australia. It does not constitute professional legal or financial advice. Laws and regulations can change over time. For specific guidance, consult official sources like the ABS, RBA, or a qualified advisor. We strive for accuracy, but inflation data may vary by region or sector.
Small business inflation: why it still matters
Author’s note:
This blog is written by a content team that regularly reviews official economic data (e.g., ABS, RBA) and listens to feedback from small business owners and managers. We compiled the insights below to help Australian SMEs navigate inflation challenges. We do not provide individual financial or legal advice; always consult professionals for personalised guidance.
You’ve likely seen plenty of headlines about inflation over the past couple of years. Now, official reports from the Australian Bureau of Statistics (ABS) and the Reserve Bank of Australia (RBA) show overall inflation is easing from last year’s highs. That’s a relief—right?
Yes and no. While national figures look better, small business inflation pressures remain, especially on wages and utilities. If you’re trying to protect profit margins, you may find certain costs haven’t dropped in line with the headlines. Here’s why—and how you can tackle it.
Headline inflation doesn’t reflect SMB costs
Headline inflation can swing quickly because it includes volatile items like food and energy. Recent stabilisation, plus government rebates (e.g., the Energy Bill Relief Fund), has pulled this headline number down.
Core inflation, however, strips out short-term swings and remains stubbornly high—directly affecting small business inflation. If you’re paying more for labour, rent, or raw materials, you’re not alone. Even many of the best employee scheduling apps and best roster apps for 2025 Xero insights note that labour expenses stay high, making it hard for SMEs to get real relief.
What you can do
- Check internal processes: If labour costs are climbing, tools like employee roster software or staff management software help reduce admin overhead.
- Revisit pricing: Customers feel inflation too, so if you must raise prices, consider adding value—like faster delivery or better support—to soften the impact.
Major cost pressures in small business inflation
Below is a quick-reference table summarising the most significant cost drivers in small business inflation, along with their potential impact and recommended actions:
| Cost pressure | Description | Impact on SMBs | Suggested actions |
|---|---|---|---|
| Energy & utilities | Rebates ending, electricity prices fluctuating | Spikes in monthly bills, unpredictable cash flow | Compare supplier rates; adopt digital budgeting tools |
| Housing & rent | Commercial leases rise alongside residential costs | Potential lease hikes; staff may need higher wages | Negotiate longer leases; plan wage reviews |
| Labour market & wages | Tight job market, wage growth above historical norms | Increased payroll expenses, retention challenges | Use automated rostering; consider performance-based incentives |
| Food & groceries | Ongoing high produce costs | Narrowed margins for cafés/restaurants | Bulk buying; diversify suppliers; frequent menu reviews |
If you’re struggling with labour costs, a time clock app or roster by skill set approach can reduce overtime and ensure the right staff are covering the right shifts.
Corporate pricing power in small business inflation
Some economists place the blame for inflation on wage growth; others believe corporate profits are a bigger culprit. Research from the Australia Institute indicates certain big companies use inflation as justification for significant mark-ups, forcing smaller businesses to absorb higher supply costs.
If you’re concerned about price hikes beyond wages, you can offset them by saving time and saving money through efficient scheduling or workforce management—key tactics to tackle small business inflation challenges.
What you can do
- Stand out on quality and service: If undercutting big competitors isn’t feasible, emphasise personalisation or faster turnaround times.
- Collaborate with other SMEs: Consider group purchasing to unlock bulk discounts that large corporations enjoy.
Is relief coming soon? Expert inflation forecasts for SMBs
Key predictions on small business inflation
Different experts provide various timelines for when small business inflation might ease. Here’s a snapshot:
| Source | Predicted timeline | Key factors | Relevance to SMBs |
|---|---|---|---|
| Reserve Bank of Australia (RBA) | ~2025 for 2–3% inflation | International conditions, domestic spending | Helps plan for rate stability and budget forecasting |
| NAB Economics | Gradual easing over 2024–25 | Slowing global supply chain issues, wage moderation | Encourages phased approach to staffing and investment decisions |
| Deloitte Access Economics | Near-normal by late 2024–25 | Housing costs, consumer sentiment | Guides timing for expansions or large capital outlays |
RBA outlook
According to the RBA’s speeches, inflation might return to 2–3% by 2025 if international conditions stay stable. They remain cautious on lowering interest rates to avoid a sudden rebound.
Private sector economists
Analysts at NAB Economics and Deloitte Access Economics envision a slow return to normal, with housing and healthcare costs staying sticky.
SMB bottom line
Even if official figures improve, you may not see a big drop in power bills or supplier costs soon. Proactive steps can shield your business if inflation lingers.
Practical tips for tackling small business inflation
Below is a quick guide to features and solutions that can help combat small business inflation.
| Tool/feature | Purpose | How it helps |
|---|---|---|
| Roster by skill set | Match tasks to staff skills | Cuts overtime; improves labour allocation |
| Award interpretation | Ensure staff payments comply with awards | Prevents under/overpayment; minimises compliance risk |
| Time clock app | Digitally track staff working hours | Reduces time theft; clarifies payroll |
| Auto-shift swaps | Automate employee shift changes | Saves managers time; keeps schedule flexible |
| Payroll integration | Sync roster data with payroll software | Prevents manual entry errors; saves admin overhead |
| Free roster & tools | Access templates and resources | Simplifies daily HR tasks; saves money on external platforms |
Actionable strategies:
- Review staffing strategies
- Automate scheduling: Use auto-shift swaps and award interpretation to stay flexible and compliant.
- Link pay to performance: If payroll balloons, emphasise employee accountability and preventing time theft.
- Negotiate energy and lease terms
- Compare suppliers: Switching energy providers might offset rising costs. A budgeting tool can track expenses in real time.
- Consider longer leases: If rent looks set to climb, locking in now can save you down the road.
- Diversify suppliers
- Multiple quotes: Don’t rely on a single supplier for key materials, especially if your industry faces seasonal spikes.
- Bulk buying: If storage space allows, buying in bulk cuts per-unit costs. Make sure to confirm everyone’s availability.
- Monitor cash flow and pricing
- Automate invoicing: Fewer late payments = healthier cash flow. Payroll integration keeps admin cohesive.
- Offer tiered services: Let customers choose premium or budget options without squeezing margins.
- Stay on top of economic trends
- RBA announcements: Watch the RBA’s releases for rate changes.
- News coverage: Outlets like ABC summarise inflation data and expert commentary.
- Compare globally: Check the OECD’s snapshots or the Australian Treasury for broader influences on small business inflation.
- Leverage government support & free tools
- Look for grants: Certain programs can help offset staff or equipment costs.
- Free RosterElf resources: Try free HR tools, a staff availability template, or free team-building activities for morale.
- Onboarding & leave management: If manual processes slow you down, consider leave management or onboarding features.
Key strategies to thrive despite small business inflation
Inflation is down from its peak, but it still poses risks if you rely on commercial rent, labour, or raw materials. Now is the time to optimise operations, adapt supplier relationships, and explore new revenue streams—and to consult guides like the Rostering Australia Employee Scheduling Guide for deeper insights.
Disclaimer:
This content reflects general insights from official economic sources and business-owner feedback. It is not a substitute for professional financial or legal advice—always consult qualified experts for your specific needs.
Whether you use shift scheduling software or need award interpretation for Fair Work compliance, the right tools can keep costs under control and protect your margins. If you’d rather focus on strategy than admin, consider workforce management via the RosterElf App.
Staying informed, making strategic changes, and monitoring time and attendance data can help you hedge against unexpected cost spikes. You’re not alone—plenty of other small businesses are adopting these measures to handle ongoing inflation pressures. For a free roster tool and more, visit RosterElf to explore everything from auto-shift swaps to advanced workforce management tactics.
By acting now, you’ll be better prepared for changes in small business inflation—and you’ll emerge with a leaner, more resilient operation.
