GRIT, AID HELP SMALL BUSINESS OWNERS
Entrepreneurs do what they can to weather storm
Patricia Macneil scans pipelines in Canada’s oilpatch with dangerous gamma rays to find imperfections. The pandemic, on top of the crude price drop since 2014, pushed her business into meltdown before a combination of grit, government aid and a focus on efficiencies pulled it back from the brink.
Revenue collapsed by at least 50 per cent earlier this year at Macneil’s A- Tech NDT, based in Whitecourt, Alta., 180 km northwest of Edmonton, and she feared she might lose seven of her 12 employees, already down from 30. Clients such as Chevron Corp., Canadian Natural Resources Ltd. and Pembina Pipeline Corp. weren’t calling anymore. How did she respond?
“By digging,” Macneil, a former welder from Cape Breton, said by phone this week. “I’ve been working harder than I have in a decade” while boosting marketing with radio ads and showing companies how to increase cost-effectiveness, she said. “We’re just trying to get any work that’s out there.”
Meantime, she focused on her staff, surprised to hear how other companies weren’t taking advantage of the federal government’s wage subsidy program.
“It is dramatically less than what these certified ticket people are used to earning, but the reality is that it’s still substantially more than they would get on EI or the CERB” she said, referring to employment insurance and the federal government’s Canada Emergency Response Benefit. “These people are part of our community.”
Macneil is hardly alone among entrepreneurs across Canada trying to keep their businesses afloat amid the pandemic- induced downturn, which has brought with it the need to adopt new technologies and processes to accommodate remote work and an accelerating shift online.
Surveyed in June, three months into the pandemic, three quarters of small and medium- sized Canadian enterprises reported sliding revenue and profit, nearly half had chopped staff and about 40 per cent had gone further into debt, according to a study issued this month by the Business Development Bank of Canada.
Just 21 per cent of small and medium- sized enterprises said they planned to make no changes to their business practices, according to the survey of 1,000 SMES and 2,000 consumers. The other 79 per cent said they were focused on five priorities because of the pandemic, led by nearly 40 per cent opting to put their finances in order by reducing operating costs, controlling cash flow and setting up a contingency plan.
Other priorities, supported by about a quarter of respondents each, included adopting new technology to stay competitive, using telework to allow physical distancing, boosting their Internet sales, social media and targeted promotions; diversifying clientele and changing their supply chains often by increasing local suppliers.
Still, nearly 90 per cent said they expected their businesses to survive the pandemic.
One of those is Mike Duncan, an electrician who pivoted his 420- squarefoot Rogue Coffee café in St. John, New Brunswick, to online orders and personal deliveries of ground coffee with his wife, Vanessa. They jumped on Tiktok in March with funny videos and targeted delivery zones with online ads, leveraging a loyal fan base to spread the word.
“If we didn’t move to online immediately, honestly we would have went under even before government support was there to kick in,” Duncan said by phone this week. “We’re just carrying so much overhead for a new coffee shop with super-modern espresso equipment. It was do or die.”
Rogue, which depended on office workers and cruise ship tourists for clientele, suffered a $ 50,000 hit as revenues were more than halved in the July- through- September period, Duncan said. They responded by working 10 hours a day, six days a week on free deliveries to customers within 40 kilometres, significantly trimming the bottom line and rationalizing café hours. They worked so hard, they didn’t even qualify for government aid to pay rent or wages because revenue rebounded to near 2019 levels.
Still, Duncan foresees a “really lean and tough winter” ahead, but the couple aren’t bowed. They’re considering expansion, to take advantage of low interest rates, to set up a drive- thru shop, and broadening coffee deliveries to cross- Canada shipments.
Duncan’s sentiment is reflected in the growing number of entrepreneurs in Canada, in part because layoffs are forcing people to start their own businesses to make ends meet while others are using the changed economic landscape as a catalyst to launch long- held dreams.
Backers invested $ 1.7 billion in 145 venture capital deals in the second quarter of 2020, a 23 per cent jump from the same quarter a year earlier and more than double the $ 818 million invested in 2020’s first three months, according to the Canadian Venture Capital and Private Equity Association. It was the highest second- quarter investment since the association began collecting industry data in 2013.
Futurpreneur Canada, a non- profit small- business booster backed by the Royal Bank of Canada among other donors, said it helped 264 entrepreneurs under age 40 start businesses from July to September, compared to 191 during the same period last year, a 40 per cent increase.
The push to digitization and online sales shows in a July survey of 373 Futurpreneur clients where 42 per cent said COVID-19 forced them to start or boost their Internet presence. In September alone, 77 per cent of the new businesses Futurpreneur supported didn’t have a physical location as part of their operating model, the non-profit said.
Addie Greco- Sanchez, founder and president of AGS Rehab Solutions Inc., a Mississauga-based disability management company that counts government agencies
WE’RE JUST CARRYING SO MUCH OVERHEAD … IT WAS DO OR DIE.
among its clients, fully embraced a shift to online.
Started 21 years ago in her basement, the company grew to 16 employees in 11 locations across the province and 500 subcontracted assessors Canada- wide. The pandemic almost shut down the company before it adopted virtual platforms that helped limit the revenue drop to 12 per cent, Greco-Sanchez said.
“We haven’t made a complete recovery from COVID, but we’ve made a nice comeback considering what the alternative might have been,” Greco-sanchez said by phone. “It really is because of our ability to pivot and look at a new way of doing business.”
AGS benefited from the $40,000 federal government small business loan and its wage- subsidy program. “They really helped us to survive,” Greco-sanchez said. Like Rogue Coffee, the shift to online has opened new revenue doors and prompted expansion considerations.
“Based on what we’re seeing right now it’s safe to say that we’re financially stable and we’re certainly looking at growth and hopefully job creation,” she said. “We really do see this digital platform as moving us forward.”