Markham, Ontario – October 16, 2008 —A new survey released by American Express Canada indicates that Canadian small businesses are not taking drastic action to change their business plans or operations in the wake of the current economic turmoil. More than three quarters (77%) of these business owners say they’ll stay the course with few changes planned in how they run their business. The poll was conducted between September 29 and October 6, 2008 by Ipsos Reid.
While the majority of Canadian small businesses are not making major changes to their business, they are realistic about the economic environment, with two thirds (64%) saying they’re weary and cautious and only one in five (20%) describing themselves as ‘unfazed and upbeat’. In fact, 66 per cent are feeling or expect to feel a negative impact from the current economic environment in the near term and 41 per cent are already feeling a negative impact.
The survey findings reported that 60 per cent of business owners believe the Canadian economy will be affected but will “avoid serious damage,” compared to 36 per cent of business owners who speculate that the Canadian economy will be dragged down into a recession or worse.
“Small business remains a cornerstone of the Canadian economy and a vital part of communities across the country, particularly during these uncertain economic times,” said Howard Grosfield, VP & General Manager, Small Business Services, American Express Canada & International. “Canada’s small businesses are now looking to reevaluate their relationships to make sure they’re getting the treatment and services they deserve to further stretch every dollar.”
Of the business owners polled, 23% intend to take action to alleviate the strains imposed by challenging economic times with one in six (16%) worried about the short term viability of their business. One quarter (25%) acknowledge that their company will have serious problems in the near future if they don’t have access to credit or loans for what they want to do.
The small business owners planning to do things differently (23%), will focus on the following:
- Cut Back Expenses (68%)
- Pay Down Debt (28%)
- Pay Themselves Less (20%)
- Cut back on marketing spend (18%)
- Diversify (18%)
- Expand aggressively (15%)
- Lay off people (11%)
Even with the prevailing economic environment, almost all small business owners (89%) want to grow their business, but prudence rules with 15 per cent having ambitions of growing their business dramatically, while 74 per cent are in favour of more modest growth. Ten per cent have no ambitions for future growth.
In a companion benchmark survey from Amex, conducted just four weeks ago, prior to the recent economic downturn, findings revealed a remarkably determined and stoic group of business leaders. Exactly the same number (77%) as now (77%) said they would stay the course despite the current economic environment.
About the survey
The above data is the result of two online surveys. The first (companion benchmark) was comprised of 762 Canadian Small Business Owners (SBO) between August 28 and September 15, 2008 concerning SBO lifestyles. The second was conducted among 404 Canadian Small Business owners from September 29 to October 6, 2008 to gauge their reactions to recent events in the economy. Both surveys were among Canadian small business owners having between 2 and 100 employees were conducted via Ipsos Reid’s Ipsos I-Say National Online Panel. American Express Canada will be releasing further data specific to the Canadian small business owner over the coming weeks.