COSBOA Small Business Perspectives Report 2026

Challenges Facing Regional Small Business

The COSBOA Small Business Perspectives Report 2026 has been released, providing a detailed snapshot of the issues affecting regional, rural and remote small businesses across Australia. Drawing on responses from 572 businesses, the report examines the challenges shaping business confidence, profitability and future growth. While the research focuses on regional Australia, many of the findings will resonate with small business owners across the country and the Bookkeepers who support them.

Reports such as this are important because they help small business concerns be heard in conversations with government. Many business owners experience these pressures in isolation, but when hundreds of businesses report similar challenges, the evidence becomes harder to overlook. By documenting the experiences of regional small businesses, COSBOA is helping ensure policy decisions are informed by the realities of running and sustaining a small business.

The Cost of Doing Business

The report paints a picture of businesses continuing to operate under significant pressure. Almost nine in ten regional small businesses reported higher operating costs during the past year, while nearly three-quarters said profitability had declined. Business confidence also remains subdued, with only 18% expecting profits to improve over the next 12 months.

While rising costs remain the most immediate concern, the report makes it clear that the pressures facing regional businesses extend well beyond day-to-day expenses. Workforce shortages continue to limit business growth, with many employers struggling to attract and retain skilled staff.

Housing availability has become a business issue as well as a community issue, making it more difficult for businesses to recruit employees willing to relocate. Fuel costs, rising insurance premiums, access to healthcare and childcare, unreliable digital connectivity and an increasing compliance burden all add to the challenges of operating a business outside metropolitan areas.

The report also identifies the growing regulatory and compliance burden as a significant concern for small businesses. Business owners reported that keeping up with changing regulations and meeting compliance obligations requires considerable time and resources, reducing their capacity to focus on running and growing their businesses.

The findings reinforce that supporting small business requires more than addressing individual costs. It also requires practical policies that recognise the broader operating environment in which businesses are working, including the combined effect of cost pressures, workforce shortages, service gaps and compliance obligations.

The Human Impact

While the report examines the financial and operational pressures facing regional businesses, it also recognises the impact these challenges have on business owners themselves. More than three-quarters of respondents reported experiencing stress or anxiety related to their business during the previous 12 months, with many also reporting burnout, disrupted sleep and difficulty switching off from work.

These findings highlight the personal toll that prolonged financial uncertainty and ongoing operational pressures can have on small business owners. They also reinforce the importance of seeking support early, before stress and business pressures become harder to manage.

Resilience Under Pressure

Despite the significant challenges identified throughout the report, the outlook is not entirely pessimistic. The COSBOA Small Business Perspectives Report 2026 also highlights the resilience of regional small businesses and their determination to adapt to changing conditions rather than stand still.

Many businesses reported introducing more flexible working arrangements to attract and retain staff, increasing wages where possible to remain competitive, reviewing energy providers, investing in energy efficiency and exploring new opportunities through service diversification, domestic tourism and the selective adoption of AI. These responses show that small business owners are continuing to make practical decisions to protect their businesses and adapt to changing conditions, even while economic pressure remains high.

Importantly, the report cautions that resilience should not be mistaken for a solution. As COSBOA CEO Skye Cappuccio notes in the foreword, “resilience is not a policy setting.” Resilience and determination have helped many small businesses navigate difficult conditions, but they should not be expected to overcome every challenge alone. The report argues that practical policy reforms are needed to reduce unnecessary barriers and create an environment where small businesses can employ local people, invest with confidence and continue supporting the communities they serve.

Supporting Small Business Across Australia

The COSBOA Small Business Perspectives Report 2026 is more than a collection of statistics. It gives COSBOA credible evidence to advocate for the practical policy reforms small businesses need, while also giving business owners a useful prompt to review the pressures affecting their own operations. This may include checking whether pricing still reflects current costs, reviewing supplier and insurance arrangements, assessing staffing risks, monitoring cash flow closely and seeking advice before pressure builds. Reliable business records and regular conversations with your Bookkeeper can also help identify issues early and support better decisions about what needs attention now and what can be planned for over time.