Majority optimistic about the year ahead but believe recession may not yet be over
Despite operating during one of the worst recessions since the 1930s, more than half (56 per cent) of Canadian entrepreneurs say the recent recession had either no impact or a positive impact on their business, according to a recent survey by RBC.
In fact, the majority (72 per cent) are optimistic about the success of their companies over the next year, even though six-in-ten (58 per cent) small business owners do not think the recession is over yet, and just one-in-four (23 per cent) indicate that they will be adding staff in the next year. Most entrepreneurs (65 per cent) believe the outlook for the Canadian economy is positive, ranking it ‘good’, ‘very good’ or ‘excellent’.
“Entrepreneurs are optimistic which is consistent with what our clients are telling us and this is reflected in their plans for the future,” said Mike Michell, national director, Small Business, RBC. “Small business owners feel as though they have weathered the storm well, but are still prudently approaching the future by reviewing their business plans and assessing their financing options. Accessing sound financial advice can help in setting realistic goals and ensuring the right financial support is in place even during an economic downturn.”
Challenges experienced by business owners
Small business owners say that the biggest challenges they currently face are finding clients and developing their market (22 per cent), keeping a steady workload (13 per cent), and maintaining sufficient cash flow and financing growth (11 per cent). Of the 36 per cent of entrepreneurs that experienced a negative impact as a result of the recession, 72 per cent say that sales revenue decreased, and 54 per cent say there are fewer business opportunities.
Advice for other business owners
Half (50 per cent) of the business owners surveyed would advise aspiring entrepreneurs to network and develop alliances in order to grow their business. Forty-seven per cent say it’s important to know your competition and 46 per cent recommend getting to know your market.
Many entrepreneurs (34 per cent) appear to have learned from their mistakes as well, admitting they would do things differently if they were to start over again. For example, almost three-quarters (73 per cent) say they would do more networking or more aggressively solicit clients (67 per cent). Sixty-six per cent would seek more advice, 54 per cent would develop a better business plan, and 60 per cent would have preferred to start their business at a younger age.
RBC commissioned a similar survey in 2005 and 2007 to small business owners. The analysis over this five-year period shows few significant changes in the attitudes of small business owners; however, some key trends were identified:
- More female entrepreneurs. A higher percentage of entrepreneurs (52 per cent) in 2010 are women, compared to 2007 (44 per cent) and 2005 (48 per cent). British Columbia and the Prairies have the most female entrepreneurs at 58 per cent.
- Entrepreneurs are getting older. In 2010, more than half (53 per cent) per cent of business owners are over the age of 55, compared to 39 per cent in 2005. In contrast, the 18-34 year old age group is trending away from entrepreneurship, from 15 per cent in 2005 to just seven per cent in 2010.
- Increased prior professional experience. Twenty-six per cent of business owners in 2010 are more likely to have been professionals prior to starting their own business, compared to 18 per cent in 2007. The number is much higher in Ontario at 32 per cent.
- Some of the main challenges to starting up a business previously reported by entrepreneurs appear to be easing:
– Fewer small business owners (22 per cent) are logging long hours in 2010 than they were five years ago (36 per cent).
– Time management is less of a concern to Canadian entrepreneurs in 2010 (16 per cent) than it was in 2005 (36 per cent).
– Fifteen per cent cite financing the start up of a small business as a challenge in 2010, compared to 27 per cent in 2005.
These are some of the findings of an RBC /Ipsos Reid survey conducted from September 7 – 15, 2010. This online survey of 1,273 entrepreneurs, who were either self-employed or owned their own small business, was conducted via the Ipsos I-Say Online Panel, Ipsos Reid’s national online panel. The results are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample’s composition reflects that of the actual Canadian population according to Census data. Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. An unweighted, probability sample of this size, with 100% response rate would have an estimated margin of error of ± 3.8 per cent, 19 times out of 20.
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For further information:
Margie McNeil, RBC Corporate Communications, 905.606.1425
Angela Gordon, RBC Corporate Communications, 905.816.5650