Starting a small business can be an exciting venture filled with ambition, creativity, and dreams of financial freedom.
But let’s get real for a moment—this isn’t the economic landscape of the early 2000s, where whimsical products and cute knick-knacks sold like hotcakes at weekend markets. No, today’s economy is a whole different beast, and if you’re not prepared to meet its challenges head-on, you may as well pack up your dreams and call it a day
60% of businesses in Australia will fail within their first three years of operation, with 20% of businesses failing in their first year of operating.
Right now, the country has the worst failure rate since the global financial crisis (GFC)
Looking back on the data I found that only 50% of new businesses are actually profitable. The fact is, many small businesses do not survive for very long, and definitely do not thrive in their industry.
Sadly, business failure can happen even if you’re profitable due to many different factors. We are living in tough times. Inflation is climbing, wages are stagnating, and people are tightening their belts like never before.
Disposable income? For many, it’s a thing of the past. In this economic climate, people don’t want to spend their hard-earned money on trinkets.
They are looking for real value—solutions to real problems. If your business isn’t offering that, you might as well not bother.
The Hard Truth About Today’s Customers
The reality is that modern consumers are more discerning than ever. They’ve been bombarded with ads, gimmicks, and low-value products for years. Now, they’re sceptical.
They ask tough questions:
- Does this solve a problem I actually have?
- Is this worth my money, time, and attention?
- Why should I buy this instead of saving or spending elsewhere?
If your business doesn’t provide clear, compelling answers to these questions, you’re going to struggle.
People today want practical, tangible value. They’re no longer swayed by cute or trendy items unless those items come with a purpose or solve a specific need.
Selling Trinkets? Think Again
Let’s use the example of selling lockets at a weekend market. Twenty years ago, this might have been a thriving small business idea.
Shoppers enjoyed browsing for fun, inexpensive items that were “nice to have” but didn’t serve any real purpose.
Fast forward to today: a customer at that same market is far more likely to walk past your stall unless you’re offering something that stands out as useful or relevant to their life.
It’s not that people don’t like charms or lockets anymore—it’s that those products are now seen as non-essential.
In a world where groceries cost a small fortune and bills pile up faster than ever, people simply don’t have the luxury of spending on items that don’t improve their daily lives.
The Shift to Selling Solutions
So, how do you adapt? The answer is simple but not necessarily easy: stop selling “stuff” and start selling solutions.
A solution-based business doesn’t just sell a product or service—it sells an answer to a problem. It’s about making your customer’s life easier, better, or more enjoyable in a way that feels indispensable.
Consider these examples:
- Instead of selling charms and lockets, create personalised keepsakes tied to life milestones.
- These could be marketed as unique gifts for weddings, anniversaries, or graduations.
- Your selling point becomes the emotional value and thoughtfulness behind the item, not just its appearance.
- Offer a service that solves a common problem. For example, if you’re handy with crafts, you could sell custom repair kits for broken jewelry, along with tutorials on how to use them.
- Suddenly, you’re not just selling trinkets—you’re selling solutions. (As an example)
Target niche needs. If you’re set on selling accessories, focus on solving specific problems like creating hypoallergenic jewelry for people with sensitive skin or versatile pieces that transition from day to night.
The Value Proposition
Your value proposition is the foundation of your business. It’s what sets you apart and convinces people to buy from you.
A strong value proposition focuses on how your product or service benefits the customer.
For example:
- Convenience: Does your product save time or effort?
- Cost-effectiveness: Does it help customers save money in the long run?
- Health or well-being: Does it improve their quality of life?
- Emotional fulfillment: Does it offer a meaningful experience or connection?
If your business idea doesn’t clearly address one or more of these areas, it’s time to go back to the drawing board.
Don’t Rely on Nostalgia—Adapt to Reality
Many small business owners fall into the trap of nostalgia, clinging to ideas that may have worked in the past.
They think, “If it worked before, it will work again.” But this mindset is a recipe for failure in today’s economy.
Take a hard look at your business concept and ask yourself:
- Does this meet the needs of today’s consumers?
- Am I addressing a real problem or just trying to sell something I think is cute or interesting?
- Is this idea adaptable to changing market conditions?
- If you can’t answer “yes” to these questions, you need to rethink your approach.
The Harsh Reality of Small Business
Starting a small business is not for the faint of heart. It requires strategy, adaptability, and an unrelenting focus on providing value.
If you’re stuck in the mindset of selling for selling’s sake, you’re setting yourself up for disappointment. But if you can pivot to a solution-focused approach and truly understand your audience’s needs, you’ll have a fighting chance.
Remember: customers are not just looking for products—they’re looking for answers.
They’re looking for something that makes their lives better, easier, or more meaningful. If your business can deliver that, you’ll not only survive in these tough economic times—you’ll thrive.
Latest research reveals that over half (55 per cent) of Australian business leaders anticipate a rise in late payments due to the escalating cost of doing business
