Queensland-based Desky, a maker of premium standing desks, has been rapidly expanding in recent years, first across Australia and more recently the US.
But tariffs imposed by US President Donald Trump have increased exporting costs and caused delays.
“Challenges with global supply chains have created a bumpy road for us,” said George Forrester, general manager of operations. “We’ve had to find new ways of sourcing and managing our inventory. Disruptions can affect every area of a business.”
The company of around 300 people has learned to pivot quickly.
“While slowdowns have occurred, we’ve managed by talking more with our suppliers and watching our stock closely.”
Catherine Cervasio, who founded natural skincare brand Aromababy over 30 years ago in Melbourne, has been exporting for more than two decades to Hong Kong, Singapore, Korea and Taiwan.
“The US market seemed like a logical next step, but that’s no longer the case,” she said.
“We are particularly nervous about progressing our US launch export strategy due to the unpredictability of the market.”
Federal grants ‘even more crucial’
In the 2024–25 budget, the Australian government pledged $22.7 billion over 10 years to the Future Made in Australia (FMIA) initiative. This aims to bolster manufacturing, transform Australia into a renewable energy leader, and enhance economic security.
Anne Nalder, founder and CEO of Small Business Association, says recent global supply chain disruptions, geopolitical tensions and even natural disasters have made the FMIA “even more crucial for small business manufacturers”.
“Recent events have highlighted the risks of relying too heavily on international suppliers, prompting a focus on strengthening domestic manufacturing to enhance national resilience and security.”
“The US market seemed like a logical next step, but that’s no longer the case.”
Catherine Cervasio, founder, Aromababy
She says the funding helps firms invest in new technology, modernise operations, partner with local entities, develop workforce skills and commercialise new products.
FMIA-related federal grants include the Industry Growth Program for high-potential SMEs and the Manufacturing Modernisation Fund for scaling up, while the National Reconstruction Fund supports high-value industry projects.
But accessing these grants can be competitive, which is where financial professionals come in, says Nalder.
“Financial professionals can help by staying across the criteria, and preparing financial statements, cash flow forecasts and business cases to strengthen applications — as well as managing compliance and reporting after approval.”
Forrester at Desky agrees the funds have become more important — though he adds that many organisations need advice on how to use them wisely.
“Given the current turmoil, the Future Made in Australia fund is more vital than before, supporting research and local economic growth, and reducing dependence on foreign suppliers.
“Our task is to make sure we spend the money in ways that improve our long-term resilience, and having support from financial experts to do this would be hugely beneficial.”
The power of financial advice
Bill Lang, executive director of Small Business Australia, says while grant support is crucial, finance professionals can provide much more.
“Many manufacturing SMEs need a clearer understanding of what drives their costs and their ability to compete,” he explains.
He says this involves evaluating customer relationships, product demand, and leveraging innovations to design, develop, and distribute products more efficiently.
“If there’s no demand — or if AI-driven innovations from places like Germany can do it at a third of the cost — grants alone won’t get you very far. You still need to be competitive.”
Nalder adds that finance professionals can help small manufacturers by managing tax incentives, streamlining compliance, advising on digital accounting, forecasting costs due to wage and regulatory changes, implementing cost control strategies, and offering strategic planning and scenario analysis — which may help them expand into new markets.
Weathering the shocks
Global supply chain upheavals require small business manufacturers in Australia to adapt continuously and swiftly to remain competitive.
Nalder suggests partnering with multiple Australian suppliers, exploring regional manufacturing hubs, maintaining buffer inventory, and using flexible contracts that allow flexibility in terms of volumes and timelines. Implementing inventory-tracking software and predictive analytics can also help forecast delays and adjust sourcing.
She also advocates for industry support.
“Collaborate, don’t compete. Join manufacturing clusters or industry associations, participate in government-supported innovation hubs, and share warehousing or logistics with nearby businesses.”
“Recent events have highlighted the risks of relying too heavily on international suppliers.”
Anne Nalder, founder and CEO, Small Business Association
If you do approach new markets overseas, do so strategically, advises Lang.
“Assess product demand, market entry strategies, political stability, sovereign risk, legal systems and business culture,” he recommends.
“Whether you’re looking to source things or sell things in a new geographic market, you must have trusted quality assurance agents to ensure shipments meet quality standards.”
Pushing new boundaries
Deterred by challenges in the US, Cervasio plans to expand Aromababy into other international markets.
“With free trade agreements, including with China, there are regions ripe for growth. Often, language barriers aren’t as daunting as they seem,” she says.
“Given China’s market size, consumer spending habits, and appreciation for Australian-made goods, it’s definitely a viable option. We’ve dipped our toe into the China market in the past. I might just need to work on my Mandarin.”
Despite the challenges, Forrester also remains upbeat.
“It’s a good idea to sometimes rethink your processes or venture into new areas. Businesses that swiftly adapt, continue to provide good products, and persistently push forward will succeed.”
