In today’s fast-moving economic environment, Australian businesses are facing growing pressure from rising interest rates, energy costs, and wage demands. These challenges are testing profitability and forcing many leaders to rethink how they operate. But there are proven strategies that can not only protect margins but also drive long-term success.
At The Alternative Board (TAB), we’ve worked closely with businesses facing these exact issues and helped them implement practical, proactive steps to manage costs while staying focused on growth.
Below are some of the most effective strategies for maintaining profitability and building business resilience:
1. Increase Operational Efficiency
- Flexible Work Models
Introduce remote or hybrid working arrangements to reduce office space, utilities, and overheads while supporting employee wellbeing. - Embrace Technology
Use automation and cloud-based tools to streamline internal processes, reduce reliance on manual tasks, and scale without increasing costs. - Lean Production & Smart Inventory
Implement lean principles and just-in-time inventory systems to reduce waste, cut storage costs, and free up working capital.
2. Strengthen Supplier & Vendor Management
- Review & Renegotiate Agreements
Examine supplier contracts for opportunities to negotiate pricing, adjust payment terms, or consolidate purchasing for better value. - Outsource Non-Core Functions
Consider outsourcing HR, IT, or bookkeeping to trusted third parties to reduce labour costs and improve efficiency. - Build Supplier Relationships
Cultivate long-term partnerships with reliable suppliers to ensure stable pricing, priority service, and volume discounts.
3. Optimise Energy Use & Reduce Overheads
- Cut Energy Waste
Lower utility bills by turning off unused equipment, maintaining HVAC systems, and investing in energy-efficient lighting and appliances. - Invest in Solar Power
Solar is a long-term solution to rising energy bills. Benefits include:- Significant cost savings over time
- Renewable energy usage for a lower carbon footprint
- Positive brand perception with eco-conscious customers
- Government rebates and tax incentives for installation
- Greater energy independence and security
4. Use Targeted Cost Management Tactics
- Review Employee Benefits
Explore options such as high-deductible health plans or adjusted super contributions to manage employment costs without sacrificing value. - Reduce Travel Costs
Replace unnecessary travel with video meetings, saving on transport, accommodation, and meal expenses. - Market Smarter, Not Harder
Focus on low-cost marketing like social media, email, and digital campaigns that allow precise targeting and measurable ROI.
5. Take Advantage of Tax Incentives & Government Support
Australia offers a range of tax benefits to support small and medium-sized businesses. These include:
- Research & Development (R&D) Tax Incentive
Eligible businesses (under $20 million turnover) can receive up to 43.5% tax offset for R&D expenses. A major win for innovation and product development. - Accelerated Depreciation
Claim higher first-year deductions for new equipment, reducing taxable income and improving cash flow. - Small Business Income Tax Offset
Businesses with a turnover under $5 million can access a tax offset of up to $1,000 to ease income tax burdens. - Investment Tax Incentives
The government provides special incentives for investing in certain industries or regions, such as payroll tax exemptions in the Northern Territory. - Renewable Energy Incentives
Investing in solar, wind, or other renewable tech may make your business eligible for accelerated depreciation and tax credits, boosting long-term savings.
6. Focus on Retention to Cut Hidden Costs
- Minimise Employee Turnover
Recruitment, onboarding, and lost productivity are costly. Invest in:- Competitive salaries and benefits
- Professional development opportunities
- A strong, positive workplace culture
High-performing, satisfied employees are more engaged, productive, and committed, leading to fewer hiring cycles and better overall performance.
You’re Not Alone in This
At The Alternative Board, we don’t just offer advice—we provide support. Whether it’s through one-on-one coaching / peer-advisory boards or our Strategic leadership and business transformation programmes. We help business owners make smart, informed decisions that keep their businesses on track.