The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has released its latest ‘Small Business Pulse Report’ revealing cautious optimism among small business owners as conditions continue to show modest improvement.
The Pulse, which provides a snapshot of small business health, rose by 0.6% in august 2025. This marks the second consecutive quarterly increase and a 0.2% rise over the past year. According to Ombudsman Bruce Billson, this reflects a shift from survival concerns towards strategies for durability, growth, and innovation. Moderating inflation, reduced interest rates, and advances in technology, particularly artificial intelligence, are supporting renewed confidence.
The report highlights that small businesses are increasingly exploring diversification, particularly in sectors heavily exposed to discretionary spending or weather conditions. Many owners are researching opportunities in e-commerce, digital marketing, and AI-driven productivity tools. At the same time, queries about regulatory compliance, workplace laws, insurance, and superannuation continue to rise, highlighting the growing complexity of operating a business in Australia.
A copy of the ASBFEO Small Business Pulse report can be downloaded via the link below:
Staffing challenges remain, though concerns have shifted from availability to cost. Businesses are seeking guidance on employment arrangements, entitlements, and options for flexible or part-time work. There is also growing interest in providing opportunities for younger workers and people with disabilities, reflecting small businesses’ role in strengthening local communities.
Financial pressures remain a reality, with high corporate insolvency levels and a gradual rise in unincorporated business failures. Small business owners continue to seek information on managing cash flow, exploring financing options, and protecting themselves from creditor risks. While distress levels remain high, the report notes that many owners are taking proactive steps to reduce expenses, manage inventory, and secure more competitive supply arrangements.
The Pulse draws on both traditional and alternative data sources, combining objective economic indicators with real-time insights into small business sentiment and behaviour. This innovative approach provides an early warning of changes in the environment and captures the “animal spirits” driving business decisions.
The report concludes that small business optimism is returning slowly but steadily. It stresses that improvement will not come in a single leap but through incremental steps that build resilience. ASBFEO has outlined “14 Steps to Energise Enterprise” to support the nation’s 2.59 million small businesses on this journey.
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