Navigating uncertainty: How SME owners can thrive amid shifting consumer and capital market trends

Australian households are spending more cautiously, but the economy continues to show resilience. In Q3, household consumption rose by 0.4%, down from 0.9% in Q2, with annual growth still tracking at 2.4%. Essentials like electricity, health and food are driving this growth, while discretionary spending is softening. This signals a shift in consumer priorities that SME owners must not ignore.

At the same time, capital markets remain active. Private equity firms are deploying capital into mid-market tech and energy transition deals, while corporates recalibrate to higher funding costs. For SME founders, this presents both a challenge and an opportunity. The ability to adapt quickly, position for strategic interest, and prepare for potential exit scenarios is more critical than ever.

Why this matters now

The Reserve Bank of Australia’s hawkish tone suggests household spending will influence future rate decisions. For SMEs, this means navigating a landscape where consumer demand is evolving and capital is becoming more selective. Whether you're preparing for growth, a sale, or a strategic partnership, understanding these dynamics is essential.

This is especially relevant for:

• SME owners considering a sale or capital raise in the next 12–24 months

• Founders in consumer-facing sectors impacted by discretionary spending shifts

• Tech and energy businesses looking to attract private equity or strategic buyers

Market dynamics and strategic implications

Consumer caution is reshaping demand

The slowdown in discretionary categories like recreation and dining reflects a broader trend: households are prioritising value and essentials. For SMEs, this means rethinking product positioning, pricing strategies and customer engagement. Businesses that can demonstrate resilience and relevance in this environment will be more attractive to buyers and investors.

M&A remains active despite macro headwinds

Anchorage Capital’s acquisition of ENTAG and TA Associates’ bid for Iress highlight continued appetite for quality assets. Energy transition deals, such as Zen Energy’s $400 million portfolio, are gaining traction. These transactions show that well-prepared businesses with strong fundamentals can still command premium valuations.

Wholesale broking disruption signals broader change

WeBull’s upcoming launch of a white-label trading platform for advisers could reshape Australia’s $1.94 trillion wholesale advice sector. For SME financial services firms, this is a reminder that innovation and speed are key differentiators. Those who can adapt quickly may capture market share in a shifting landscape.

How MSA helps you stay ahead

At Morgan Shaw Advisory, we guide SME owners through uncertainty with our EBITDA+ SIX STEPS TO SUCCESS™ framework. This proven methodology helps businesses:

• Build strategic plans tailored to buyer expectations

• Strengthen financial and operational fundamentals

• Prepare for due diligence with confidence

• Position for competitive bidding or discreet negotiations

• Maximise sale price through tailored marketing and advisory support

Whether you're navigating inflationary pressures or preparing for a strategic exit, our approach ensures you're not just reacting to market shifts, you’re leveraging them.

Practical questions to consider

• Is your business positioned to thrive in a value-driven consumer environment?

• Have you assessed your readiness for a sale or capital raise in the next 12 months?

• Are you tracking sector-specific M&A trends that could impact your valuation?

• Do you have a plan to engage with private equity or strategic buyers?

• Is your business information organised to impress in early buyer conversations?

Let’s talk

If you're an SME owner looking to make smart moves in a shifting market, we invite you to book a confidential consultation. Explore how MSA’s strategic advisory can help you unlock value, prepare for exit, or attract the right capital partner.

👉 Download our guide to preparing your business for sale
👉 Read more on MSA’s EBITDA+ SIX STEPS TO SUCCESS™