Grim Australian Profit Squeeze: Can Your Business Survive?

Running a business in Australia can feel like a constant balancing act. Costs continue to climb, customers are careful, and cash flow leaves little room for a bad month. Often, the strain comes from several pressures landing at once.

In August 2026, annual inflation reached 4.0%, while electricity prices were 13.2% higher than a year earlier, partly reflecting the end of Commonwealth rebates. Meanwhile, ASIC recorded 14,153 companies entering external administration for the first time in 2025–26—about 4% fewer than in 2024–25, but still a serious signal of financial strain. External administration is a formal insolvency process; it does not mean every company is permanently closed.

At Business By Design, we hear similar concerns from our clients and other business owners we’re currently working with: margins are tight, cash flow is harder to predict, teams are stretched, and too many decisions still rest with the owner. So, what can you do before pressure turns into a crisis?

The pressures rarely arrive alone

First: supplier, wage, fuel, energy and insurance bills can rise faster than selling prices. However, putting prices up without understanding your margins and customer value can create new problems. At the same time, late payments and loan commitments can squeeze cash, even when sales look healthy on paper.

Meanwhile, compliance demands, technology changes and customer expectations keep shifting. When processes are unclear or work depends on one person, simple issues take longer. Consequently, the owner becomes the bottleneck and spends less time leading the business.

Ask yourself

• Do you know your break-even point and which work is most profitable?
• How many weeks of cash would you have if revenue fell by 10%?
• Which tasks or decisions still depend entirely on you?
• What would stop if you were away for two weeks?

These questions are not a reason to panic. Instead, they show where a practical plan can start.

What more than 30 years of coaching has taught me

After more than 30 years working with businesses across the Mid North Coast of NSW and beyond, I’ve learned that no two businesses face pressure in exactly the same way. Yet the early warning signs are often familiar: shrinking margins, delayed decisions, unclear responsibilities and the owner carrying too much alone. 

I’ve also seen that resilient businesses are not those that avoid every setback. They look honestly at the numbers, talk openly with their team and act while they still have options. Often, progress starts with one focused change: clarifying a priority, fixing a process or having a conversation that’s been put off.

My biggest reflection? Business owners don’t have to solve everything alone. A trusted outside perspective can help test assumptions, spot what is being missed and keep the next steps moving. The earlier you see a challenge clearly, the more choices you have.

Small steps help when they are tied to real numbers and followed through.

How Business By Design can help

Business By Design helps owners step back from daily pressure, assess performance and choose actions that fit their goals, team and market. Through business coaching, strategy sessions and practical follow-through, Sean Martyn works with owners to strengthen focus, improve systems and build accountability. Each business is different, so the plan should be too.

Want a practical place to start? Download Business By Design’s free Crisis Response Checklist and use it to think through your next steps when pressure builds.

Pressure may not disappear overnight. However, clearer numbers, stronger routines and earlier decisions can put you in a better position to respond. If your margins are slipping, cash flow feels uncertain, or every problem comes back to you, start a conversation with Business By Design. We support owners across the Mid North Coast, Northern NSW and Dubbo. Contact Sean to discuss a focused plan for your next 90 days.

Sources for published statistics: ABS Consumer Price Index, August 2026 · ASIC Corporate Insolvency Update, October 2026