TORONTO, Oct. 20,
2022 /CNW/ - Having gone through the worst of the
pandemic, the majority of Canadian small businesses surveyed say
they are now doing the same or better than they were two years ago,
according to Scotiabank's third annual Path to Impact Report. They
also say they feel better equipped to survive another wave of
the pandemic or a recession, and two-thirds are optimistic about
the future state of their business. However, despite the optimistic
sentiment, many small businesses are worried about inflation,
rising interest rates, supply chain issues, and a labour market
shortage.
Two-thirds of owners, especially those of larger businesses,
foresee needing more financing. Additionally, nearly a third say
their number one priority over the next three months will be
finding places to cut costs. As a result, more small businesses are
turning to someone for advice, and half of those who have sought
out qualified advice from a financial advisor say their business is
doing better.
"As we see reinvigorated consumer demand, businesses are
reporting positive sales and revenue numbers, and less cash flow
concerns. While it's encouraging to see more optimism, the road
ahead will pose new challenges," says Jason
Charlebois, Senior Vice President, Small Business,
Scotiabank. "Small businesses are facing serious economic headwinds
from inflation, rising interest rates, and labour market shortages.
Small business owners should continue to be proactive in seeking
qualified advice, leveraging all available financing options and
tools."
The Scotiabank Path to Impact
survey found:
- 75% of Canadian small businesses surveyed say
they're doing the same or better than they were two years ago. This
is up from 54% in last year's survey.
- 34% of small businesses say they are being impacted
by inflation, with 37% of those businesses saying it is
having a significant impact, and 4% having a critical
impact
- 24% of small businesses say they are impacted by
rising interest rates, with 42% of those businesses saying
it is having a significant impact, and 5% a critical
impact
- 25% of small businesses say they are currently
being challenged by the labour market shortage and/or are having
trouble sourcing materials
- 83% say they are better equipped today to survive
another wave of the pandemic 81% of small business owners
said they are equipped to handle a possible recession
- 65% foresee needing financial support in the
future, and those with higher revenues above $500K foresee needing more than those with
revenues under $500k
- 90% of business owners have turned to someone for
advice or support over the past two years, with 49% of those
who turned to a financial advisor saying their business is doing
better
- 11% reduction in businesses reporting cash flow
concerns over the past two years
With inflationary pressures, volatile interest rates and a
labour market shortage likely to persist, Scotiabank has several
tips for small business owners as we look ahead to 2023:
- Proactively explore financing options
If you feel
your business needs additional financing to withstand future
economic headwinds, it's best practice to be proactive, and start
those conversations with your small business advisor sooner than
later. Whether it be increasing your line of credit, exploring
additional loan programs, or finding support with identifying and
applying for government-based assistance programs, your Small
Business Advisor can help you plot a course of action to make sure
your business is best placed for continued success.
- Don't let wasteful practices curtail your bottom
line
With increasing inflationary pressures, and a myriad of
other contemporary economic challenges, it's never been more
important to make sure your business is as streamlined as possible.
With 29% of small businesses ranking cutting costs wherever
possible as their number one immediate priority, talk to your small
business advisor today about where you can find efficiencies in
your organization's operations to make sure you are maximizing your
revenue.
- Stay ahead of the curve on trends, and always have a
contingency plan
As a business owner, it's vital to plan
ahead and anticipate any changes to the business environment,
whether in your marketplace/sector, in your local community, or in
your personal life. More than 80% of small businesses surveyed said
they received some form of financial relief from the government
during the pandemic. Some of those relief loans are set to come due
next year so it's important to work on a repayment strategy
now. With the possibility of a recession, continued interest
rate volatility, increase in freight costs, and continued supply
chain disruptions likely to remain, a contingency plan is one of
the best lines of defence.
- Keep digital top of mind
The global
economy and advances in technology have created a huge world
market, with an array of opportunities for commerce, sourcing
labour talent and marketing your business to new customers. What's
more, not all businesses need a storefront. A strong digital
presence can mean a lot of the overall operations can be conducted
from your own home, and remote and hybrid work options have
demonstrated they are here to stay. Scotiabank can also help you
navigate the evolving world of digital capabilities now available.
- Spot new opportunities
Evolving and learning from
past successes and failures is a great way to grow as well as
provide a renewed spark and excitement in your business. Revisit
your existing products and services and explore if there is a place
to add something new. Paying attention to trends in your industry
and staying on top of current news can be great sources of
inspiration. Be open to uncovering new opportunities and seek out
the advice of a Small Business Advisor, who can help you plan your
next big idea.
Visit the Scotiabank Advice+ Centre for Business for more
details:
https://www.scotiabank.com/ca/en/small-business/advice-centre.html
Click here to read the full Path to Impact Report.
Methodology:
Scotiabank's annual Path to Impact Report was conducted on
behalf of Scotiabank by Maru Public Opinion and its sample and data
collection experts at Maru/Blue. A total of 806 financial decision
makers at Canadian businesses with annual revenue between
$50,000 and $5
million responded to the survey between August 26 and September 1, 2022. The
survey was conducted in both English and French.
About Scotiabank:
Scotiabank is a leading bank in the Americas. Guided by our
purpose: "for every future", we help our customers, their families
and their communities achieve success through a broad range of
advice, products and services, including personal and commercial
banking, wealth management and private banking, corporate and
investment banking, and capital markets. With a team of over 90,000
employees and assets of approximately $1.3
trillion (as of July 31,
2022), Scotiabank trades on the Toronto Stock Exchange (TSX:
BNS) and New York Stock Exchange (NYSE: BNS). For more information,
please visit http://www.scotiabank.com and follow us on Twitter
@Scotiabank.
SOURCE Scotiabank