When a small business closes, a community loses more than a shop

Small businesses provide essential goods, create places to connect and step up when communities need help. So why aren’t we doing more to keep them in business?

There is a small business owner in almost every community right now wondering how much longer they can keep going.

They might be looking at another electricity bill, trying to find staff, negotiating with suppliers or lying awake wondering how to pay the next round of wages. They may be working longer hours while paying themselves less.

And tomorrow, they will open their doors and do it all again.

Across Australia, small business owners are facing a difficult combination of rising costs, squeezed profits, workforce shortages, administrative demands and ongoing uncertainty.

But the impact reaches beyond the person behind the counter.

When a small business struggles, so can the people and places that depend on it. And when a business closes, a community can lose much more than a source of local employment.

It can lose an essential service, a trusted relationship, a place to connect and someone who would have been there to help when things went wrong.

The pressure is real

Small businesses make up around 97% of all actively trading businesses in Australia. They are central to our economy and woven into the everyday life of our communities.

Yet the evidence shows just how much pressure many are carrying.

In the 2025 Small Business Perspectives Report, the Council of Small Business Organisations Australia (COSBOA) and CommBank heard from more than 800 small business owners. Among those surveyed:

• 64% reported lower profits than the previous year, compared with 40% in 2024.
• 60% said they were unable to pay themselves at least occasionally.
• 76% reported stress or anxiety, while 57% experienced burnout.

These figures are a snapshot of the owners surveyed, not a measure of every small business in Australia. But they paint a confronting picture of the financial and personal cost of keeping the doors open.

More recently, the Australian Bureau of Statistics found that in June 2026, 29% of small businesses anticipated difficulty meeting their financial commitments over the following four weeks, compared with 17% of large businesses. Australian Bureau of Statistics

Think about that for a moment. Nearly three in ten small businesses surveyed were concerned about meeting their commitments in the month ahead.

For many owners, there is no large finance team, spare staff or buffer to absorb another challenge. There is often just a person, a family and a determination to keep going.

A business can be essential in more ways than one

When we talk about essential services, we tend to think of hospitals, electricity, water and telecommunications. Of course, these matter.

But what about the general store that stocks nappies, bread and medication when the nearest supermarket is an hour away?

What about the mechanic who keeps local vehicles on the road? The café where an older resident has a conversation each morning? Or the pub where people come together after work, share news and check in on one another?

These businesses do more than sell goods and services. Some also function as social infrastructure: places where people meet, relationships develop and community life happens.

They help create the everyday connections that contribute to social capital. A shopkeeper might notice when a regular customer hasn’t been in. A café owner might introduce a newcomer to a local group. A publican might know who to call when someone needs a hand.

These contributions are rarely captured on a balance sheet. But that doesn’t make them any less valuable.

And if one of these businesses closes, another may not simply appear to replace it—particularly in a small or remote community.

Often overlooked, yet ready to step in

In my work with businesses and communities across Australia, I have seen small business owners step forward during some of the most difficult moments.

They share supplies. They offer space. They check on neighbours. They help get information out. They contribute to fundraisers and support other businesses.

Many do this while managing the same disruption themselves.

This is local leadership in action. It is also a reminder that small businesses are not separate from their communities. Business owners and their staff are community members too.

Yet, in conversations about community resilience, preparedness and recovery, small businesses can still be treated as an afterthought—or viewed only through their economic contribution.

That misses a significant part of the picture.

A business can be a source of local knowledge, a trusted communication point, a provider of essential goods and a place where people connect. It can also be vulnerable and need support in its own right.

We need to recognise both.

The loss can last long after a disaster

The case for supporting local businesses becomes even clearer when we look at the longer-term impacts of disruption.

The 2026 Recovery Gap report, commissioned by QBE and conducted by Oxford Economics Australia, analysed seven major Australian bushfires, floods and cyclones between 2018 and 2023. It compared affected communities with similar regions that had not experienced a major event.

Two years after a major disruption, affected regions were estimated to have 9% fewer small and medium-sized businesses than they otherwise would have had. For the average affected region, that was associated with approximately $43 million less in annual economic activity. QBE Insurance Group

This does not mean 9% of existing businesses necessarily closed because of a disaster. The gap can also reflect businesses that never started, investment that was delayed and growth that did not happen.

But that distinction makes the finding no less significant.

Recovery is not only about whether a business reopens its doors in the weeks after a disaster. It is also about whether it can keep trading months and years later—and whether the next local business has the confidence and opportunity to start.

The research found a larger gap in regional communities: two years after a major disruption, business numbers were around 9% below expected levels in regional areas, compared with less than 4% in capital cities.

When a community has fewer businesses than it otherwise would have had, the consequences can extend to jobs, local supply chains and access to services. There may also be fewer places for people to meet and fewer local leaders with the capacity to contribute.

What could we do differently?

If we want stronger communities, we need to invest in the businesses that help hold them together. That means looking beyond short-term recovery grants and considering what helps a business remain viable, connected and prepared over time.

For governments, councils, funders and business organisations, that could include:

1. Include small businesses in community planning.
Bring business owners into local preparedness, resilience, social connection and recovery conversations early—not just after a disaster.

2. Recognise businesses that provide essential local functions.
Identify where communities rely on a small number of businesses for everyday goods, services or gathering places, and consider what their loss would mean for residents.

3. Make support easier to access.
Provide practical advice, financial guidance and wellbeing support that fits around the realities of running a business. Keep application processes simple and make help available before a business reaches crisis point.

4. Invest in local business networks.
Create opportunities for business owners to connect with one another, community groups and decision-makers. Stronger relationships can help people share information, find support and work together when challenges arise.

5. Take a longer view of recovery.
Continue supporting businesses beyond the immediate aftermath of a disaster, recognising that financial pressure and lost opportunities can emerge or deepen over time.

6. Consider social value alongside economic value.
When assessing local investment and community resilience, look at the role businesses play as places of connection, trusted sources of information and contributors to local life.

This does not mean every business can or should be kept open indefinitely. It means understanding the wider consequences when a community loses a business—and making sure owners have a fair opportunity to access support before that happens.

A question worth asking

We often ask small businesses to support local communities.

They sponsor the junior football club. They donate to the school raffle. They give someone their first job. They open their doors when people need a place to gather.

So perhaps it is time we asked a different question:

What are we doing to support the small businesses our communities rely on?

Because helping a local business stay viable can protect more than a livelihood. It can help preserve access to essential goods, maintain a place for people to connect and sustain the relationships that make a community stronger.

At Resilient Ready, we believe small businesses deserve to be recognised as part of the social and economic fabric of their communities…and supported accordingly.

Let’s stop waiting until the doors close to recognise what we’ve lost.

Why engage us?

Many organisations already know that community connection matters. The harder part is deciding where to act, what to invest in and how to tell whether it helped.

That is where we can work together. We bring measurement, mapping, research and community engagement into the same conversation. We help organisations interpret what the evidence means locally, check it with the people who live there and turn it into decisions they can act on.

Our work does not begin and end with disaster recovery. The relationships and shared places that support recovery also matter for social cohesion, health, local participation and the everyday strength of a community.

Bringing this work to the US is an opportunity to explore how the Australian approach could be adapted with US partners, local data and community validation. And we’re already deep in conversations with future partners.

The applause at the summit was a lovely moment. What excites me more is what could happen next: making the relationships that matter visible, then working with communities to strengthen them before they are needed most.

Ready to join us?

The relationships we build in good times can become some of our greatest assets when times are tough. If you’re ready to make those connections visible and strengthen them, let’s work together.

Let’s connect!