Australian small businesses are expecting a large portion of revenue growth to come from overseas in the next 12 months, amid high interest rates and inflation, according to a new survey from courier service, Sendle.

Almost two-thirds (65%) of small business owners are expecting up to one-quarter of total revenue growth to come from international markets this year. Australia’s uncertain economic outlook appears to be factoring into small business decision-making, with 61% reporting that inflation has had a significant impact on their business more than they expected.

Sendle Australia managing director, Laura Hill said, “As cost-of-living bites consumers at home, we’re seeing growing demand from small businesses to expand their reach in markets like the US. The data shows that attracting new customers continues to be the top challenge for small businesses, so diversifying their customer base across different markets is a sound strategy to weather any economic downturn and future-proof their business in the longer term.”

Despite the economic environment, almost half (48%) of small businesses are forecasting growth of up to 25% in FY25, compared to 23% of small businesses in 2024. This optimism could be due to the opportunities for growth overseas, with four in five (80%) of small businesses reporting an increase in revenue growth from international markets in the past six months. 

To attract customers in new markets, social media will be a top driver of growth, with one quarter (25%) of small businesses planning to grow their social media presence and engagement. In fact, small businesses are more likely to invest in social media and marketing campaigns than they are to change their pricing strategy or negotiate with third-party suppliers.

When thinking about the upcoming peak sales season, 44% of small businesses are worried about slowing customer demand due to cost of living pressures. However, the survey reveals that many small businesses could be leaving peak planning too little too late, with well over half of small businesses (59%) saying they’ll plan for peak season only one to two months out.

“Australian shoppers are increasingly bringing forward their Christmas shopping to October and November to take advantage of key sales events. Our advice to small businesses is the earlier you can plan for peak, the better. Start looking at sales, marketing and shipping strategies now to capitalise on consumer demand later,” Hill added.

In addition to enticing consumers with free shipping, with over half (58%) of small businesses planning to offer free shipping this year, with the favoured option of $100 average order value, some small businesses are looking for ways to make their business greener. Almost one quarter (24%) of small businesses say sustainability is a high priority, while 82% of small businesses plan to roll out sustainable packaging in the next six months.