Trends for small to medium businesses in FY25/26: What’s next for SMEs

Change can be challenging, but it’s also exciting. If embraced properly, it sets SMEs up not just to survive, but to thrive.

In the latest episode of The PKF Podcast, we sat down with Rebecca McCabe, Partner in our Newcastle Advisory team, to explore the evolving challenges and opportunities facing small-to-medium enterprises (SMEs) across the Hunter region.

With over a decade of experience supporting businesses across industries, from health and fitness to construction, engineering, and professional services, Rebecca has seen first hand both the resilience and the vulnerabilities of SMEs in a changing market.

The current landscape for SMEs

SMEs continue to play a vital role in driving growth and innovation, yet they face increasing pressures on multiple fronts:

•    Cashflow management: Many businesses are still feeling the aftershocks of COVID-19. Those with robust cashflow management plans have been able to weather financial challenges more effectively, while newer ventures often face the steep challenge of building stability in uncertain times.
•    Attracting and retaining talent: The number one issue raised by business owners is people; how to find them, how to keep them, and how to create workplaces that stand out. Flexibility, tailored employee benefits, and new approaches to recruitment are no longer optional, they’re critical.
•    Strategic planning and accountability: Too often, owners are consumed by daily operations. Having a clear, actionable strategy, backed by accountability, is proving to be a game-changer for growth-focused SMEs.

Success stories in action

Rebecca shared how working with clients to develop strong cashflow forecasts, define employee benefits, and create innovative recruitment strategies has delivered real impact. These initiatives not only strengthen businesses financially but also build loyalty and culture within teams.

Equally important has been helping owners step back from operations, define their long-term strategy, and hold themselves accountable for execution. As Rebecca notes:

“It’s not just about crunching numbers, it’s about thinking differently, setting clear actions, and having someone walk the journey with you.”

What’s on the horizon?

Looking ahead to FY25/26 and beyond, Rebecca identified two major shifts SMEs need to prepare for:

1. Artificial intelligence (AI)

• AI presents enormous opportunities for efficiency, productivity, and innovation - but not without risk.
• Businesses must consider data security, the potential risks of employee use of tools like ChatGPT, and the broader role AI can play in strategy.
• Firms without an AI strategy may quickly fall behind.

2.    Succession planning

• With generational change accelerating, many family-owned businesses are finding the next generation unwilling to take on leadership.
• Succession now requires forward planning, whether through management buyouts, private equity, or preparing the business for sale.

Final advice for business owners

Don’t wait to act on AI. Understand the risks, explore the opportunities, and integrate it into your business strategy now. Plan your exit early, even if it feels far away, succession planning is essential to protect and maximise the value of your business.