Running a small business in 2025 means tighter margins and tougher choices. The good news is you can control more than you think. This guide breaks down the biggest cost lines and explains what is driving each one and where to focus first.
1. Wages and staffing
Labour is still the largest cost for most small businesses.
What drives it: award changes, overtime leakage, and staffing to slow times.
Quick moves: tighten rosters to trading patterns, cross train, set clear overtime rules, and use incentives tied to revenue or productivity.
2. Rent and leases
Commercial rents remain elevated in many areas and scheduled escalations add up.
What drives it: fixed annual increases, market reviews, and space that is larger than you need.
Quick moves: negotiate caps or fit out contributions at renewal, right size your footprint, and sublet underused space where the lease allows.
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3. Insurance premiums
Premiums have risen for many sectors, especially where weather risk is higher.
What drives it: reinsurance costs, claims history, and location risk.
Quick moves: rebid policies each year, raise excesses where sensible, bundle covers, and document risk mitigation to strengthen your case with underwriters.
4. Inputs, freight and inventory
Supply chains are smoother than in 2023 but not back to old pricing everywhere.
What drives it: supplier concentration, fuel costs, and carrying slow stock.
Quick moves: lock volume pricing, dual source key inputs, trim slow SKUs, and improve ordering cadence to free cash.
5. Borrowing costs
Rates are lower than their peak but still high enough to squeeze cash flow.
What drives it: variable rate exposure and short maturities.
Quick moves: refinance to lower margins, consider principal holidays in seasonal troughs, and model scenarios before adding new debt.
6. Software and subscriptions
Creeping SaaS costs add up quickly.
What drives it: duplicate tools and unused seats.
Quick moves: consolidate platforms, switch to annual billing for discounts, and run a quarterly licence cleanse.
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7. Energy: The lever you can pull now
Power is one of the few costs you can meaningfully improve in weeks, not months.
What drives your energy bill:
- Usage charges in cents per kWh for the electricity you consume.
- Network charges to use poles and wires, often the largest slice.
- Demand charges if your tariff bills for kW peaks in the month.
- Environmental, metering and market fees.
- Retail margin built into rates.
Quick small business wins:
- Compare your bill: Upload your latest bill to check cents per kWh, daily supply charge and any fees against current market offers.
- Pick the right tariff: Confirm if you are on flat, time of use or demand pricing. The wrong structure quietly inflates costs.
- Tame demand spikes: Stagger big loads, add start delays on HVAC and kitchen kit, and avoid stacking equipment in the same quarter hour.
- Audit metering and fees: Confirm your metering provider and remove outdated or duplicate charges.
- Low capex efficiency: LED, fridge and HVAC maintenance, timers and sensors. Aim for under two year payback.
Mini example
Pepper Real Estate, a single site small business in NSW, reviewed their bill, compared market offers, and switched plans on the spot, delivering $800 in annual savings. Result: a sharper rate and a quick, seamless changeover.
How Zembl helps
Energy is what we do. Small businesses can send us a bill and we’ll do the legwork: comparing rates, checking the market, and finding value fast. Larger businesses get the full treatment. Strategic procurement, competitive contracts, and long-term price certainty. Whatever your size, we cut through the noise, unlock savings, and keep your energy costs in check.
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