Costs Are Up, Profit Is Down: What the 2026 Regional Business Report Means for You
Nine in ten regional businesses paid more to run their business this year. Fewer than one in five expect it to pay off.
The Council of Small Business Organisations Australia (COSBOA) has just released its 2026 Small Business Perspectives Report, the first in the series focused entirely on regional, rural and remote Australia. It's based on feedback from 572 business owners, and it doesn't sugarcoat much.
Costs are up. Profit is down. Confidence is shaky. If you're running a business outside a capital city, none of this will surprise you. If you're not, keep reading anyway. A lot of it will still sound familiar.
The Cost of Doing Business
The numbers are stark. 87% of regional businesses report higher operating costs over the past year, and 73% say profit has fallen. Only 18% expect profit to improve in the next 12 months, and just 7% expect costs to come down.
reported higher operating costs this year
say profit has declined
expect profit to improve next year
expect costs to fall next year
It's Not Just the Bank Statement
Cost pressure is only part of it. 87% of businesses that tried to recruit struggled to fill the role, with skilled trades and specialist positions hit hardest. 52% rate housing access in their area as poor, which makes it harder to attract staff willing to relocate. Fuel costs are placing significant or critical pressure on 37% of businesses, and one in four name regulation and compliance as one of their biggest burdens.
None of this shows up on a single line in your P&L. It shows up in how long a role sits unfilled, and in the hours spent on admin instead of the work that actually pays.
The Toll on Business Owners
Here's the part that doesn't get said enough. 77% of business owners reported stress or anxiety related to their business in the past year. Burnout, disrupted sleep and difficulty switching off were common themes.
Running a business under sustained pressure isn't just a financial problem. It's a personal one.
Resilience Isn't a Strategy
To be fair, the report isn't all doom. Business owners are adapting: offering more flexible work to keep staff, reviewing energy providers, lifting wages where they can, and looking at new revenue through diversification or tourism.
But COSBOA CEO Skye Cappuccio makes an important point in the report's foreword: "resilience is not a policy setting." Business owners shouldn't be expected to absorb every new pressure indefinitely just because they've managed so far.
What You Can Do Now
- Check your pricing actually reflects your current costs, not last year's.
- Review supplier and insurance arrangements rather than letting them auto-renew.
- Assess your staffing risk before a key role becomes urgent.
- Monitor cash flow weekly, not just when the BAS is due.
- Keep your records accurate and current, so problems surface while they're still small.
- Talk to your bookkeeper before pressure builds, not after.
So What Does This Mean for You?
Even the report says it. Reliable business records and regular conversations with your bookkeeper help you catch issues early, and decide what needs attention now versus what can wait.
You can't fix a problem you can't see clearly. And you can't see it clearly with messy books.
Not Sure Where Your Numbers Stand?
Let's find out together, before the pressure builds.
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