Recently, small businesses have had to navigate some pretty significant headwinds in the macroeconomic environment. Persistent inflation has led to rising interest rates, flowing through to slowing economic growth. The unemployment rate is still low, which is great news… except if you’re a small business looking for staff.
Yes, these issues are all featured widely in the media. But what’s often missing from this coverage is how these trends are affecting small businesses.
To be an effective advisor, it’s critical to understand what’s happening in the economy and how it’s impacting your clients. Not only does it help you identify what challenges they’re facing, but it also gives you an insight into the opportunities available to them.
That’s why I took the stage at the recent Xero Summer Series to talk to advisors like you about Xero Small Business Insights (XSBI) — covering the latest data and how it can be used by accounting and bookkeeping practices.
What’s the latest XSBI data telling us?
The latest XSBI data was released on March 5, 2024 and shows that after coping reasonably well for much of 2023, small businesses came under pressure in December.
The combination of multiple interest rate rises and ongoing higher-than-usual inflation appears to have reached a tipping point in the final month of the year, with the Xero Small Business Index falling 37 points in December to its lowest level since September 2020. You can read the full Australian XSBI report and explore the data yourself.
How can you use XSBI in your practice?
I loved talking with you at Xero Summer Series, hearing all the wonderful ways you’re using the XSBI data in your practice. Here’s a snapshot of what I heard.
- Staying informed about small business trends: XSBI gives you great awareness of how small businesses, in aggregate, are performing. It helps give valuable context when thinking about how to best assist your clients at any given point in the economic cycle.
- Having deeper client conversations: XSBI is a useful conversational tool with clients, and provides a solid benchmark when assessing performance. For example, do you need to give a client advice on how much they need to lift wages in their hospitality business? You can easily refer to the XSBI data, and see how hospitality wages are tracking nationally, and also investigate specific state wage data.
- Sharing information with clients: The data is completely free to use in communication with clients, such as newsletters or social media (all we ask is that you credit XSBI as the source). Sharing the data can help clients understand how small businesses are performing, and positions you and your practice as an expert in the small business environment.
Take a deep dive into XSBI data and research
XSBI uses anonymised and aggregated data (it’s not a survey!) from over 600,000 small businesses across Australia, Canada, New Zealand, the UK and US. XSBI also has data on all Australian states and the ACT, as well as 17 different industries. You can easily explore all the latest XSBI findings, including downloading the anonymised and aggregated data.
The program not only includes a quarterly release of data, but also regular blogs about small business issues and XSBI special reports on topics like cash flow or technology use. If your interest lies in what is happening in a particular country, you can also check out the specific research we have on Australia, Canada, New Zealand, the United Kingdom and United States.
