More Australian small businesses plan to join Black Friday and Cyber Monday sales this year, with participation rising to 53 per cent from 43 per cent last year, according to a Xero survey of 500 small-business owners.

However, 55 per cent of past participants relied on credit or deferred payments to fund additional stock and staff.

Seven in 10 businesses felt pressure to compete with larger retailers, while 54 per cent said the sales period materially affects their ability to meet annual profit targets.

Among past participants, 23 per cent reported lower profit margins, while 31 per cent either fell short of the sales needed to make their promotions worthwhile or had not set a sales target.

Charlie Sheppeard, executive GM of strategy and operations ANZ at Xero, said Black Friday can attract customers and improve cash flow but requires upfront investment. The RBA’s cash rate increase this week has also added to borrowing costs ahead of the end-of-year trading period.

Among businesses that had never participated and were either not planning to take part or remained undecided, 28 per cent cited insufficient stock, and 27 per cent said they could not afford to offer discounts.

Discount planning is another challenge. While 81 per cent of businesses participating or considering taking part said they knew their maximum profitable discount, only 30 per cent used real-time profit or margin data to set prices. The average maximum discount planned for this year is 34 per cent.

Business planning is also limited. Only 21 per cent have a documented sales plan for next year that they review regularly, while 10 per cent have no plan and do not intend to develop one.

Source link