When consumers are optimistic about the economy, their personal finances and the future of small businesses, the economic situation in the country tends to boom. They usually feel more confident to spend their money, investing in the nation and startups alike. However, the opposite is true if individuals are concerned about finances.
The recent monthly business barometer released by the Canadian Federation of Independent Business (CFIB) revealed that, despite steady gains seen in past months, the confidence of Canadian company owners dropped in November. This means that smaller firms may not have seen a lot of income last month. This is not predicted to continue, as for many businesses, they tend to see a spike in revenue during December due to holiday spending.
However, entrepreneurs might want to use slight lulls like this to ensure their accounting software is working properly and ready for revenue spikes during certain times of the year.Confidence fell by nearly 3 points
The results from the barometer revealed that although in October, the confidence of business owners was at 65.6 points out of 100, but fell to 62.9 points in November. According to The Financial Post, even the lower number is not all that bad for companies - any score above 50
units means that the majority of leaders expect their performance over the next year to be strong.
For many administrators, this dismal outlook is not present. The small company owners in Newfoundland were the most optimistic about their firms and the economy over the next year, with a score of 74.1 points. Businesses in Alberta, British Columbia and Saskatchewan also scored over the national level. All other provinces, including Quebec and Ontario, were below the 62.9 figure, with Prince Edward Island garnering the lowest confidence level at 52.1
points.Could be because of tax issues
There are many potential reasons behind a more guarded outlook this year. If consumer confidence is down, that would negatively impact business owners, and if there are indications that more shoppers are going to stick to a budget this holiday season, that might also bode poorly for shops.
However, The StarPhoenix explained taxes might be involved
in the lack of optimism.
"We remain concerned that many municipalities will increase property taxes in 2013 and dampen optimism further," CFIB vice president for Prairie and Agri-Business Marilyn Braun-Pollon told the paper.
Company owners can learn to cope with the potential increase in taxes and better budget their capital to provide for the expenses by integrating them with the use of financial software.