Amid a gloomy economic outlook, 80% of Australian small businesses are forecasting online sales growth in the next 12 months, according to Sendle's 2022 Small Business Survey.

The annual survey from the Australian 100% carbon neutral parcel delivery service, Sendle, surveyed more than 900 small businesses in Australia on their expectations and sentiments for the year ahead. The survey reveals that majority of small business respondents are optimistic about sales growth in 2023, with 37% of small businesses forecasting a 25-75% growth in online orders over the next 12 months.

Small businesses in the Automotive & Marine industry predict the strongest growth in 2023, with 38% of small businesses forecasting over 75% growth in online orders over the next 12 months. This was closely followed by small businesses in the Office Furniture & Supplies and Food & Beverage industries who forecasted over 75% growth in online orders over the next 12 months, at 33% and 32% respectively.

"Sendle's 2022 Small Business survey tells us that it's not all doom and gloom for small businesses," says Laura Hill, Managing Director of Sendle Australia. 

"The recent Black Friday and Cyber Monday sales may explain this confidence, with our parcel volumes up 50% during the November sales period. Many small businesses continue to see an uptick in online sales growth, as consumer spending remains resilient."

Cost of living pressures the top challenge for small businesses

However small businesses acknowledge that next year is set to be a much harder grind than 2022. Cost of living pressures and rising inflation is clouding the horizon, with 51% of small businesses reporting that the rising costs of products and services is their top challenge when it comes to online sales growth. This compares to 22% of respondents who cited finding customers as their top business challenge.

Despite high and potentially sustained inflation and a global economic slowdown forecasted for 2023, small businesses are rising to the challenge. Over half (51%) of respondents said they feel satisfied about the support available, which could include government assistance for small-to-medium businesses.

Sustainability top of mind, but knowledge gaps stalls progress

Sustainability is a critical business practice that is here to stay, with 55% of respondents selling locally made products. Over a third (34%) of respondents say their products are ethically or sustainably sourced. Small businesses in the Food & Beverage industry are leading the way, with one in two (51%) reporting that between 75-100% of their products are ethically or sustainably sourced. This is closely followed by small businesses in Jewellery & Accessories and Baby & Children sectors, at 48% and 45% respectively.

Sustainability is helping small businesses capture a growing audience that cares about the environment, with 34% reporting that demand for locally produced products has increased over the past 12 months. More companies are realising the benefits for both their companies and the environment, with 34% of respondents reporting that they have implemented more sustainable business practices and products.

Despite the growing interest in sustainability, awareness and knowledge gaps still exist. Around a third (32%) of small businesses admit that they dont know whether their products sold are ethically or sustainably sourced. Many struggle to overcome barriers to implementing sustainable practices, with 32% of respondents reporting theyve not made any changes to their business model or products.

When comparing small businesses across industries on where they are at in their sustainability journey, small businesses in the Toys, Hobbies & Games, Automotive & Marine and Clothing & Footwear sectors are more likely to report that they have not made any changes to their business model and products.

"Growth is a top priority for small businesses, of course, but what matters is that growth is smart and sustainable," says Hill. 

"Small businesses increasingly recognise that sustainable products and practices are not only good for the planet, but also for the bottom line. 

"However, Sendle's survey reveals that more educational resources are needed for small businesses to make the transition easier and quicker."