SA small businesses rebuilt cash flow models to drive growth in 2025
The report found that 83% of surveyed SMEs reported revenue growth during the year, while 90% said they felt optimistic about the future, despite ongoing challenges such as late payments, economic uncertainty and operating cost pressures.
Colin Timmis, regional director for EMEA at Xero, said 2025 marked a turning point in how small businesses approached stability.
“Rather than waiting for external conditions to improve, business owners focused on building resilience into their operations. Technology adoption, clearer business purpose and tighter cash flow discipline were key shifts,” he said.
Reducing reliance on seasonal income
One of the key trends identified in the report was a move away from seasonal and unpredictable income streams. Small businesses increasingly adjusted their offerings to generate more consistent, year-round revenue.
Colleen Browne, founder of Southern Summits Trail Tours and Coaching Services, said technology enabled her business to reduce its dependence on seasonal demand. The business initially focused on guided hikes and trail runs, but demand fluctuated sharply throughout the year.
By introducing online coaching services, Browne was able to extend her reach beyond local and seasonal constraints. “Moving part of the business online allowed for steadier income and longer-term client relationships, rather than being limited by available hours or peak seasons,” she said.
Technology supporting operational focus
For some organisations, digital tools also played a role in reducing administrative burden and improving financial visibility.
David May, co-founder of non-profit organisation Empower, said accounting technology helped the organisation balance operational oversight with its core mission. “Financial management is critical, but technology has helped streamline that process, allowing more focus on programme delivery and strategic decision-making,” he said.
Xero’s research found that 45% of SMEs cited technology as a key contributor to business value in 2025. In addition, 58% said cloud-based tools improved financial management, while 40% reported reduced administrative workload through automation.
Ongoing cash flow pressure
Despite improved confidence, cash flow remains a concern for many small businesses. The report shows that 41% of SMEs experienced cash flow difficulties during the year, 46% struggled with late payments, and 43% of business owners reported having to forgo their salaries at some point.
To manage these pressures, Empower focused on strengthening donor relationships and improving transparency around funding commitments. May said clearer communication and alignment with donor priorities helped stabilise income streams, particularly after the cancellation of two major fundraising initiatives.
Looking ahead to 2026
According to Timmis, the shift seen in 2025 reflects a broader move towards more structured, data-driven business management.
“Growth is increasingly linked to process discipline, financial clarity and the ability to scale efficiently. Businesses that invest in digital tools, skills development and professional financial support are better positioned to manage uncertainty,” he said.
Xero expects further uptake of automation and digitised operations in 2026, as SMEs look to improve efficiency and free up capacity for strategic priorities.
“Small businesses demonstrated resilience in 2025. Sustaining that momentum will depend on continued digital adoption and a focus on systems that support long-term decision-making,” Timmis concluded.