Jay Patel says he is working harder than ever running his small business. (ABC News: Doug Dingwall)
Jay Patel is used to long hours running his Indian grocery.
But now, he says he can't even afford to take a day off.
Mr Patel is working seven days a week to steer his small business, Desi Bazzar, through Australia's cost of living crisis.
"It affects my personal life, but I have to, because I invested that much money [in the business],"
he said.
He says the last two years have been his most stressful in more than 15 years as a business owner — even compared to the early days, when he started the grocery store.
Mr Patel, who moved to Australia from India in 2007, describes feeling the squeeze from both costs and revenue.
Customers are buying fewer non-essential items — including in usual bumper holiday periods like Diwali — at his store in Canberra's culturally diverse northern suburb of Gungahlin.
"They're making budgets, what they need to spend and where they need to spend … Now they're more selective," Mr Patel said.
His sales in January were down 40 per cent compared to the same month last year.
Jay Patel has had to reduce staffing and work longer hours at his store. (ABC News: Doug Dingwall)
At the same time, costs such as electricity and rent are rising.
"Those fixed expenses, we can't control them," he said.
"We need to reduce [casual staffing]. And I need to work more hours."
It's a situation facing many of Australia's 2.6 million small businesses, after surging inflation and interest rate hikes sapped consumer spending.
Economists say conditions remain tough for retailers and expect it will take years for workers to recover their pre-pandemic spending power.
Observers also say the conditions add to challenges faced by migrant entrepreneurs — estimated to own a third of Australia's small businesses.
And they say while those business owners have experiences helping them adapt to the tougher economic climate, there's a need to connect them to support and advice.
'Everyone is struggling'
Mr Patel understands why his customers are spending less.
He feels the same financial pressures at home from higher mortgage interest rates.
Despite his increased business costs, he says there's a limit to how much he can raise his grocery's prices.
Costs such as rent and electricity have grown for Desi Bazzar, its owner says. (ABC News: Doug Dingwall)
"Right now everyone is struggling in this situation," Mr Patel said.
University of Sydney Business School associate professor Andrew Grant said raising prices can create other problems for small businesses.
"That's going to make it more difficult for them to attract new customers or that might be making them less competitive compared to larger organisations that can withstand such price increases," he said.
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Meanwhile, it remained challenging for small businesses to access credit, a recent Reserve Bank report found.
While many had built cash buffers in the COVID pandemic, some had drawn down on these and become insolvent, the report said.
Small businesses had fewer options to receive financing compared to larger ones, Dr Grant said.
"There's not an easy situation when you've started a business with the expectation that the costs of funding are going to be low and then they increase for whatever reason, and it could be completely outside your control," he said.
Dr Grant said it commonly fell to small business owners to take on more duties and hours to keep operating, he said.
"They might have to be working longer hours to achieve break-even profitability level or a break-even amount of revenue to service their loans."
While some business owners are working longer weeks, others are coping with tougher conditions by reducing opening hours.
After Cindy Tse's family started their cafe Star Turn in 2019, it opened from 7:30am to 10pm and had 10 staff covering all hours.
Cindy Tse works at her family's cafe, Star Turn, in addition to her nursing job. (Supplied: Cindy Tse)
With revenue dropping recently by 50 per cent, Ms Tse said the cafe, in Melbourne's eastern suburb of Doncaster, had started closing by 5pm and halved its staffing.
"We cut fine dining to lower the cost, and focus on providing breakfast and lunch for the local community," Ms Tse said.
"We had to make everyone happy and make things affordable."
It was also becoming harder for the business to hold onto staff, who often left for higher wages elsewhere, as they dealt with their own financial pressures.
"The turnover is so big now. Someone pays a dollar more, and they will go,"
Ms Tse said.
She's working at the cafe in addition to her usual job as a nurse, to help her family.
"It's truly difficult," she said.
In addition to cost of living increases, the number of people working from home had affected revenue by reducing their customer base, Ms Tse said.
She hoped people would return to their offices in greater numbers.
"There are quite a lot of pressures [on the business]."
'They've passed a lot of barriers'
Mr Patel has been in tough positions before.
He started operating small businesses when he couldn't find work as a computer technician after moving to Australia, despite his professional experience in India.
University of Melbourne researcher in migrant entrepreneurship, Farzan Fallahi, said many migrants started small businesses out of necessity, after facing challenges in the job market.
Farzan Fallahi says migrant entrepreneurs draw on "psychological capital" — a combination of optimism, self-belief and hope. (Supplied: The University of Melbourne)
She said migrant entrepreneurs used "psychological capital" — a combination of optimism, self-belief and hope they bring in migrating — to thrive despite barriers they faced when getting started.
Those qualities would help them adapt to economic conditions, Dr Fallahi said.
"They've passed a lot of barriers coming here, bringing all the family, the visa process," she said.
"So rising cost of living and other barriers would be something that they can actually deal with."
But she said there was still a need for governments and business associations to support migrant entrepreneurs with networking events and training programs, to help break down cultural barriers and connect them with the broader community.
There are hopes that the Reserve Bank's recent interest rate cut, falling inflation and emerging gains in real wages will encourage households to loosen purse strings in the coming year.
But Dr Grant doesn't expect conditions to ease soon, and said small businesses would need to continue adapting.
"I don't think we're going to go back to extremely low levels of inflation or interest rates in the near-term."
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Photo shows A young couple of Fijian Indian heritage standing in front of door.
He said business owners considering borrowing can keep more options open if they keep accurate documents and good payment records.
"That's one of the most important things to do," Dr Grant said.
"Look at the available sources of funding and if costs have gone up, work out are there areas of the business that you can focus on?"
But options were often limited, and some small businesses looking to weather tough conditions were cutting costs by reducing staffing, he said.
Mr Patel hopes to ride out the situation — and is waiting for interest rates to keep falling before he starts having days off again.
"I need to earn more and for that I need to work hard," he said.
"The situation right now is very tough for everyone, not only me.
"Other people are also doing the same things."