Forget about fears of a global recession, the European debt crisis, or a stronger Canadian dollar.
The majority of Canadian small businesses are optimistic about their prospects in the New Year and in fact intend to focus on non-headline grabbing issues such as launching new products, investing in new technology and hiring more employees, according to a survey commissioned by Sage Software Inc. and Sage Simply Accounting. The survey queried more than 300 Canadian small business owners to determine how they intend to grow their business in 2012. The business management software and services company has over 3.2 small and medium business customers around the world.
“Despite much talk about an economic downturn in 2012, Canadian small business owners believe it will have little impact on them,” said Nancy Harris, vice-president and general manager of Sage Simply Accounting.
Instead, Harris said, Sage found that SMBs believe their top five challenges for 2012 will be:
- Getting new customers – 43 per cent
- Increased competition – 26 per cent
- Taxes – 21 per cent
- Customer retention – 20 per cent
- Government regulations – 14 per cent
Overall, small business owners were optimistic about 2012 with 43 per cent saying so. SMB owners believe the outlook for their company this year will be better than it was last year. Another 40 per cent of respondents believe there will be no change from 2011 while 17 per cent said they expect 2012 will be worse than the previous year.
The Sage executive said antiquated technology (five per cent), the European debt crisis (four per cent) and a stronger Canadian dollar (3 per cent) round out the bottom three major concerns of Canadian SMBs.
The survey also indicated that local small businesses intend to focus on the following priorities in 2012:
- Cutting expenses – 33 per cent
- Launching new products and services – 27 per cent
- Investing more in new technology – 20 per cent
- Hiring more employees – 19 per cent
- Investing more in sales and marketing/seeking additional financing – 17 per cent
The survey results indicate that small business owners are now more aware of the importance of technology in growing their companies, according to a Sage executive.
“The frequent response we got was that tech improves customer service and process,” said Harris. “Although Canadian businesses are becoming more confident in the prospects for the future and the country’s economy, the bureaucratic and legislation walls are preventing them from fully thriving.”
In another Sage survey released in September last year, SMBs identified bureaucracy and taxes as the most unfavourable factors of doing business in Canada. In that survey, bureaucracy and legislation (52 per cent), tax relief (38 per cent) and the governments handling of the economy (26 per cent) ranked as the top three worst aspect of doing business in Canada. About 47 per cent of those who found legislation and red tape as major drawbacks also said tax laws were the most burdensome issues to deal with.
“Taxes and red tape are among the greatest operating challenges for SMBs,” admits Michael McAvoy, director of SMB and commercial marketing at HP Canada.
He said a survey commissioned by HP and Canadian Federation of Independent Business (CFIB) showed that small businesses want government to reduce barriers such as red tape and high taxes to enable businesses to flourish and create jobs.
The CFIB estimates that red tape costs Canadian business an average of $30 billion/year.
The organization lists the following items as major sources of red tape headaches for small business:
- GST, PST, and payroll taxes
- Records of employment
- Statistics Canada surveys
- Business registration
- Workers’ compensation
- Employment records
- Consumer protection
- Sector-specific rules