Canadian small business sector to face growth challenges
October 17, 2011
Maintaining expectations seems to have been the guiding theme for Canada's small business sector in recent years. By restraining growth plans, many firms were able to cushion themselves against the force of the global economic meltdown. What's more, a market-wide focus on domestic sales helped channel revenue streams.
These are the conclusions of recent reports from TD Economics and the Canadian Federation of Independent Business. Indeed, Canada's recovery from the global recession has proceeded at a far more robust pace than its neighbors to the south or across the Atlantic. However, with widespread economic uncertainty and mounting crises in foreign markets, the ability of Canada's small business sector to hold strong remains in question.
"There is enormous economic uncertainty at the moment, but businesses still have to build for the future," said Craig Alexander, senior vice president and chief economist at TD Bank Group, according to the Financial Post. "This means having realistic expectations and being flexible to adjust with a changing economic climate."
The most recent Royal Bank of Canada/Ipsos Reid poll noted similar skepticism about economic progress, even as a string of reports last week suggested signs of improvement.
According to the survey, nearly two-thirds of surveyed small business owners and self-employed professionals are concerned about finding clients and developing their markets over the next year, the FP reports. Nearly half - 47 percent - are worried about maintaining sufficient cash flow and growth.
Most surveyed business owners and entrepreneurs suggested seeking help and advice is the best way to secure growth. Even so, a separate survey released this week by Toronto-Dominion Bank shows more than three-quarters of small business owners lack a succession plan, which may be critical to ensuring long-term growth for an enterprise.
"Small business owners typically spend a lifetime building their business but little to no time creating a succession plan," said Carl Smith, regional vice president and market leader at TD Waterhouse. "Without a formal succession plan in place you could miss out on important tax advantages or getting the maximum value for your business."
Small business owners should create a formal succession plan as early as possible, Smith added, developing a strategy at least five to ten years ahead of when they aim to retire.