Businesses are facing mixed conditions, with the labour market remaining tight but with household spending rising in real terms, according to the latest data from the Australian Bureau of Statistics.
The unemployment rate in April was 4.1%, which was unchanged from both the month before and year before. Despite the weak economy, there is little slack in the labour market, which means employers face competition to attract and retain quality staff.
In better news, household spending rose 3.5% year-on-year in the March quarter, while prices rose 2.4%. That means, for the average business, business revenues should be outpacing cost increases.
With businesses facing mixed conditions, coupled with the new financial year just around the corner, here are five ways to become more profitable in 2025-26:
- Review pricing regularly –Make sure your prices keep up with rising costs and shifting market demand to protect your margins and stay competitive.
- Focus on customer retention –Loyal customers are more cost-effective to maintain than finding new ones. Prioritize great service, rewards, and consistent communication.
- Invest in staff training – Skilled employees are more efficient and productive. Regular training boosts productivity, morale, and customer satisfaction.
- Cut unnecessary expenses – Regularly audit overheads to find savings. Even small cuts can add up to big savings over time.
- Embrace technology – Automation and digital tools can streamline operations and boost profits.