Small business expects to see growth opportunities

Rising operating costs, hiring among sector’s biggest issues: BDC report

A report Tuesday from the Business Development Bank of Canada says small and medium- sized businesses continue to pursue growth opportunities despite persistent challenges in growing employee numbers and sales.

Pierre Cleroux, BDC’s chief economist, says 41 per cent of Canadian businesses have outperformed the Canadian economy over the last three years. Those companies had strong growth, of over 20 per cent, or sustained growth, which is between five and 20 per cent every year over the last three years.

The BDC asked the companies which were growing the most about their strategies and found four key areas they focus on — their clients, employee training, innovation and investing in technology and in their companies.

“Diversification is a key strategy to face this challenge right now and also the oil sector is looking at reducing costs and in order to reduce costs you have to innovate,” Cleroux said in an interview.

“You have to find different ways to produce the service or the product you produce because that’s really what the sector is looking at now.”

The report also contained some bad news for the smallest businesses which were “quite sobering,” according to Cleroux.

It found 60 per cent of Canada’s small businesses showed weak or zero growth or even negative growth during the last three years and 46 per cent of the smallest businesses ( one to four employees) showed zero to negative growth.

The report said revenue growth has been sluggish for small businesses, with 38 per cent experiencing negative numbers or no growth over the past three years, and an additional 23 per cent seeing growth under five per cent.

The BDC said business leaders cited rising operating costs ( 64 per cent) as their top obstacle to growth, followed by difficulties in hiring and retaining qualified personnel ( 55 per cent) and external competition ( 48 per cent).

But it also found 30 per cent of small businesses experienced strong growth and profits.

Cleroux is launching the BDC’s latest research report at a session in Calgary Tuesday on overcoming barriers to growth. Several activities are planned this week by the Calgary Chamber of Commerce to celebrate small business owners.

“Sure, some small businesses aren’t necessarily as busy as they were a year ago, but I am amazed at the amount of businesses that are doing very well,” said Adam Legge, president and chief executive of the Calgary Chamber. “These businesses, in fact, are busy innovating, hiring and even expanding.”

The Small Business Week Expo and Awards show takes place on Thursday.

For a full listing of this week’s events, visit: SmallBusinessWeekCalgary.com/events.