This April 2023 survey records perceptions of overspending at the time, not current business spending.
About the Study
SMBLoan commissioned this historical survey to ask business directors and decision-makers about perceived overspending. The original sample-size statements conflict; the verified total is unknown.
Business owners and senior decision makers were asked to specify if they were overspending across 17 common business expenses:
- Payroll, salaries, & employee benefits
- Rent or mortgage
- Utilities
- Equipment (incl. computers)
- Maintenance & repairs in the workplace or on equipment
- Motor vehicles & their expenses (incl. petrol)
- Internet, cloud storage, software or subscriptions
- Inventory & stock
- External contractors and outsourced professional services
- Workplace furniture & supplies
- Marketing, advertising & sponsorship
- Insurance
- Business travel
- IT hardware (computers, servers)
- Interest and fees on loans
- Employees
- Workplace amenities for employees
Respondents also revealed how much they could be saving each year if they avoided overspending or cut unnecessary spending.
The archived report described micro businesses (1–10 employees), small businesses (11–50), medium businesses (51–200) and some businesses above 200 employees. It did not provide reliable subgroup respondent counts.
The original report gives both 250 and 210 as its sample size. No source deck or respondent file establishing the correct total is available, so neither figure is verified. One chart question refers to late payments rather than overspending; that inconsistency remains in the archived material. Recruitment methods, response rate, weighting and respondent counts for each state and business-size group are not available in the retained records. No subgroup counts have been inferred from rounded percentages. Treat the breakdowns as descriptive results; they do not establish national representativeness or statistically reliable differences between groups.
What areas are SMEs spending too much on?
SMB Loan found that 86 per cent of SMEs are overspending on at least one expense. SMEs felt they were overspending on insurance the most, chosen by 28 per cent. Utilities was next, chosen by 26 per cent.
These are owners’ judgments, not audited expenditure or realised savings. They can prompt a review of actual bills, but the unresolved sample and question inconsistencies mean the findings are descriptive historical results rather than a fully reconciled statistical dataset.
Next was rent and mortgage (chosen by 20 per cent); followed by marketing, advertising & sponsorship (17 per cent); external contractors and outsourced services (16 per cent); and payroll and employee benefits (16 per cent).
Fourteen per cent overspend on travel, 13 per cent on employee head count, 12 per cent on inventory and stock, 10 per cent on loan interest and fees as well as maintenance and repairs, 9 per cent on amenities, an equal 8 per cent on IT hardware, furniture and supplies, and 7 per cent on equipment and computers.
What areas are SMEs spending too much on? By State.
Businesses from NSW are most likely to overspend overall, with 97 per cent of NSW respondents admitting they overspend on at least one expense. This compares with 90 per cent of Western Australian, 85 per cent of Victorian, 80 per cent of South Australian and 70 per cent of Queensland businesses.
The state table records respondents’ perceptions of overspending. It is not a comparison of wage levels or labour productivity between states. Without subgroup bases, the percentages cannot establish a reliable state ranking.
Across the major states, Victorian businesses felt they were spending too much on marketing and advertising, chosen by 23 per cent. This was followed closely by 22 per cent of NSW businesses. In comparison, only 13 per cent of South Australian, 10 per cent of Queensland and 5 per cent of Western Australian businesses admitted the same.
Category note: The answer list follows the separate rows retained in this table, including employees and workplace amenities. These overlapping labels should not be combined or added as independent spending shares. The source questionnaire has not been recovered.
| Response | |||||
|---|---|---|---|---|---|
| State (%) | |||||
| NSW | VIC | QLD | SA | WA | |
| Payroll, Salaries, & Employee Benefits | 19 | 17 | 19 | 27 | 14 |
| Rent or Mortgage | 21 | 23 | 20 | 33 | 10 |
| Utilities | 38 | 21 | 20 | 20 | 29 |
| Equipment (inc. computers) | 8 | 12 | 0 | 7 | 5 |
| Maintenance & Repairs in the workplace or on equipment | 11 | 9 | 13 | 0 | 19 |
| Cars & Other Motor Vehicles Expenses (incl. petrol) | 16 | 15 | 23 | 7 | 19 |
| Internet, Cloud storage, Software, or Subscriptions | 16 | 17 | 5 | 29 | 18 |
| Inventory & Stock | 11 | 8 | 23 | 7 | 14 |
| External contractors and professional services we outsource work to | 21 | 21 | 8 | 7 | 14 |
| Workspace Furniture, Equipment, & Supplies | 19 | 11 | 9 | 13 | 10 |
| Marketing, Advertising, & Sponsorship | 22 | 23 | 10 | 13 | 5 |
| Insurance | 32 | 26 | 30 | 27 | 14 |
| Business Travel | 14 | 15 | 10 | 13 | 24 |
| IT hardware (computers, servers) | 6 | 9 | 10 | 7 | 14 |
| High interest and high fees on our business loans | 11 | 8 | 13 | 13 | 10 |
| Employees (wages or employee headcount) | 13 | 17 | 10 | 0 | 24 |
| Employee benefits and workplace amenities for employees | 8 | 11 | 5 | 0 | 24 |
| My business doesn't overspend on anything | 3 | 15 | 30 | 20 | 10 |
What areas are SMEs spending too much on?
By business size.
Smaller businesses are more likely to overspend on their utilities: chosen by over a quarter (29 per cent) of micro businesses and 26 per cent of small businesses, and compared with 21 per cent of medium sized businesses.
Larger businesses overspend more on employee benefits, chosen by 19 per cent of medium sized businesses, and compared with 10 per cent of small businesses and 4 per cent of micro businesses.
However, smaller businesses are significantly more likely to conserve their spending to the necessary minimum: 25 per cent of micro businesses said they don't overspend on anything, compared with only 8 per cent of small businesses and 4 per cent of medium sized businesses.
How much could SMEs save each year if they avoided unnecessary spending?
SMB Loan also sought to discover how much SMEs could save in their businesses if they avoided unnecessary spending. It found that a third (32 per cent) could save $100,000 or more in a year.
Specifically, 12 per cent could save $100,000 to 200,000, 10 per cent could save $200,000 to 300,000, 5 per cent could save $300,000 to 500,000 and 5 per cent could save more than $500,000.
Only 16 per cent of businesses couldn’t make any more cuts to their spending.
| Response | |||||
|---|---|---|---|---|---|
| State (%) | |||||
| NSW | VIC | QLD | SA | WA | |
| Up to 50,000 | 32 | 28 | 53 | 33 | 43 |
| $50,000-$100,000 | 21 | 15 | 3 | 13 | 14 |
| $100,000-$200,000 | 14 | 11 | 10 | 13 | 10 |
| $200,000-$300,000 | 11 | 11 | 5 | 13 | 14 |
| $300,000-$400,000 | 5 | 4 | 0 | 7 | 5 |
| $400,000-$500,000 | 5 | 4 | 0 | 0 | 0 |
| More than $500,000 | 5 | 9 | 3 | 7 | 0 |
| My business could not make any more monetary cuts | 8 | 17 | 28 | 13 | 14 |
How much could SMEs save each year if they avoided unnecessary spending? By business size.
Smaller businesses are more likely to already be operating at the minimum cost, chosen by over a third (34 per cent) of micro businesses and 6 per cent of small businesses, compared with only 2 per cent of medium sized businesses.
Larger businesses are more likely to be spending $100,000 or more each year on costs that could be cut, chosen by 66 per cent of medium sized businesses, compared with only 26 per cent of small businesses and 6 per cent of micro businesses.
Historical earnings context, if needed separately: ABS Employee Earnings, August 2022. That population differs from this business survey and does not validate its sample.