375,331.

That’s the number of Australian businesses that exited the actively trading business population during the 2025–26 financial year, according to the Australian Bureau of Statistics.

That’s more than 1,000 businesses every single day!

Now, not all these businesses failed. Some were sold, restructured, merged or voluntarily closed. Nevertheless, it’s a confronting reminder of just how much change occurs in the Australian business environment.

And it raises a very important question…

What are you doing to make sure your business is stronger, more profitable and better positioned for the future?

It’s tough out there. But doing nothing isn’t the answer.

Let’s face it.

Running a business in Australia isn’t getting any easier.

Business owners are dealing with rising wages, increasing operating costs, insurance premiums, compliance requirements, interest expenses and customers who are often taking longer to pay.

At the same time, competition remains fierce, and customers are increasingly conscious of where they spend their money.

For many businesses, margins are being squeezed from both directions.

Costs are going up, but increasing selling prices isn’t always straightforward.

And here’s what concerns me…

Too many business owners are working harder than ever, but they’re not necessarily making more money.

• They’re busy.
• They’re stressed.
• They’re putting in the hours.

But at the end of the year, there’s often very little to show for all that effort.

Being busy doesn’t mean you’re profitable. And being profitable doesn’t necessarily mean you have sufficient cash flow.

The danger of thinking everything will be okay

One of the biggest mistakes a business owner can make is assuming things will eventually improve on their own.

• “Sales will pick up next month.”
• “Things will get better after Christmas.”
• “We’ll review our prices later.”
• “We’ve always managed before.”

Sound familiar?

The problem is that waiting for things to improve isn’t a strategy.

Hope doesn’t pay wages, suppliers, the ATO or the bank.

Successful business owners recognise problems early and take action.

They don’t wait until their cash flow is under pressure or their bank starts asking difficult questions.

Five warning signs you shouldn’t ignore

1. Your sales are increasing, but your profits aren’t
   More turnover is not necessarily good business. If your costs are increasing faster than your revenue, you could be working harder for less money.

2. Your debtors keep growing
   You’ve made the sale, completed the work and issued the invoice. But where’s the money? If customers are taking 60, 90 or even 120 days to pay, your business is effectively financing their operations. And that can put enormous pressure on your cash flow.

3. You don’t know your numbers
   Can you tell me your current gross profit margin?
   • Your net profit?
   • Your debtor days?
   • Your break-even point?
   • Your expected cash position in three months?

   If you don’t know these numbers, how can you make informed decisions about your business?

4. Your business depends entirely on you
   If you disappeared for four weeks, what would happen?
   Would your business continue operating successfully?
   Or would everything stop?

   A business that relies entirely on its owner is not only stressful to run. It can also be difficult to grow and potentially harder to sell.

5. You’re constantly reacting instead of planning
   Every day brings another problem…
   • Staffing issues.
   • Customer complaints.
   • Supplier price increases.
   • Unexpected expenses.

Before you know it, another year has gone by and nothing has fundamentally changed.

You cannot build a better business if you spend all your time simply surviving the current one.

Here’s what a small improvement could mean

Let’s look at a business generating $3 million in annual revenue.

Its net profit margin is 5%.

That means it’s making $150,000 in annual profit.

Now imagine the business owner makes some changes.

They review their pricing, improve productivity, reduce unnecessary expenses and focus on more profitable customers.

As a result, their net profit margin improves from 5% to 8%.

Their annual profit increases to $240,000.

That’s an additional $90,000 in profit every year without increasing turnover by a single dollar.

And if that additional profit is sustainable, it could also increase the value of the business.

That’s why understanding your numbers and making improvements is so important.

Don’t just survive. Build a better business.

There are opportunities in every business.

• Opportunities to improve pricing.
• Opportunities to reduce costs.
• Opportunities to use technology and AI.
• Opportunities to improve cash flow.
• Opportunities to attract better customers.
• Opportunities to develop your staff and improve productivity.

But those opportunities rarely present themselves while you’re constantly putting out fires.

You need to make time to work ON your business, not just IN your business.

And that requires planning, discipline and a willingness to do things differently.

My challenge to every business owner

I want you to ask yourself five questions.

1. Is my business more profitable today than it was 12 months ago?
2. Do I have a reliable cash flow forecast for the next three to six months?
3. Am I measuring the key performance indicators that actually drive my business?
4. What are the three biggest problems preventing my business from becoming more profitable?
5. What am I going to do differently over the next 90 days?

And here’s the most important part.

Don’t just answer the questions. Do something about the answers!

• Develop a plan.
• Set some targets.
• Make someone accountable.
• Measure the results.
• And keep improving.

The bottom line

Australia recorded 375,331 business exits during 2025–26.

Not all were failures, and many new businesses also entered the market.

But the figures should remind every business owner that business conditions change, competition never stands still and long-term success cannot be taken for granted.

The biggest risk isn’t always what’s happening in the economy. Sometimes it’s failing to recognise what’s happening inside your own business.

You cannot control interest rates, government policy or the broader economy.

But you can influence your pricing, productivity, costs, cash flow, customer relationships and business strategy.

Stop waiting for business conditions to improve. Start improving your business.

How Indigo Financial can help

At Indigo Financial, we believe your accountant should be doing much more than preparing tax returns and financial statements.

We want to help you build a stronger, more profitable and more valuable business.

That means understanding your numbers, identifying opportunities, improving cash flow, monitoring performance and helping you make better business decisions.

If you’re concerned about where your business is heading, don’t wait until there’s a crisis.

Contact us to arrange a business performance review.

Together, we can identify where improvements can be made and develop a practical plan to help your business move forward.

Because the objective shouldn’t simply be to survive another year. It should be to build a business that thrives.

Contact Indigo Financial on (08) 8212 8585 if you need help with understanding any of your accounting, taxation and business development needs.

Source: Australian Bureau of Statistics, Counts of Australian Businesses, including Entries and Exits, 2025–26, released 18 August 2026.