Less than half of small business owners impacted by recession:
Majority optimistic about the year ahead but believe recession
may not yet be over
TORONTO, October 14, 2010 Despite operating
during one of the worst recessions since the 1930s, more than
half (56 per cent) of Canadian entrepreneurs say the recent
recession had either no impact or a positive impact on their
business, according to a recent survey by RBC.
In fact, the majority (72 per cent) are optimistic about
the success of their companies over the next year, even though
six-in-ten (58 per cent) small business owners do not think
the recession is over yet, and just one-in-four (23 per cent)
indicate that they will be adding staff in the next year.
Most entrepreneurs (65 per cent) believe the outlook for the
Canadian economy is positive, ranking it 'good', 'very good'
"Entrepreneurs are optimistic which is consistent with
what our clients are telling us and this is reflected in their
plans for the future," said Mike Michell, national director,
Small Business, RBC. "Small business owners feel as though
they have weathered the storm well, but are still prudently
approaching the future by reviewing their business plans and
assessing their financing options. Accessing sound financial
advice can help in setting realistic goals and ensuring the
right financial support is in place even during an economic
Challenges experienced by business owners
Small business owners say that the biggest challenges they
currently face are finding clients and developing their market
(22 per cent), keeping a steady workload (13 per cent), and
maintaining sufficient cash flow and financing growth (11
per cent). Of the 36 per cent of entrepreneurs that experienced
a negative impact as a result of the recession, 72 per cent
say that sales revenue decreased, and 54 per cent say there
are fewer business opportunities.
Advice for other business owners
Half (50 per cent) of the business owners surveyed would advise
aspiring entrepreneurs to network and develop alliances in
order to grow their business. Forty-seven per cent say it's
important to know your competition and 46 per cent recommend
getting to know your market.
Many entrepreneurs (34 per cent) appear to have learned from
their mistakes as well, admitting they would do things differently
if they were to start over again. For example, almost three-quarters
(73 per cent) say they would do more networking or more aggressively
solicit clients (67 per cent). Sixty-six per cent would seek
more advice, 54 per cent would develop a better business plan,
and 60 per cent would have preferred to start their business
at a younger age.
RBC commissioned a similar survey in 2005 and 2007 to small
business owners. The analysis over this five-year period shows
few significant changes in the attitudes of small business
owners; however, some key trends were identified:
- More female entrepreneurs. A higher percentage
of entrepreneurs (52 per cent) in 2010 are women, compared
to 2007 (44 per cent) and 2005 (48 per cent). British Columbia
and the Prairies have the most female entrepreneurs at 58
- Entrepreneurs are getting older. In 2010, more
than half (53 per cent) per cent of business owners are
over the age of 55, compared to 39 per cent in 2005. In
contrast, the 18-34 year old age group is trending away
from entrepreneurship, from 15 per cent in 2005 to just
seven per cent in 2010.
- Increased prior professional experience. Twenty-six
per cent of business owners in 2010 are more likely to have
been professionals prior to starting their own business,
compared to 18 per cent in 2007. The number is much higher
in Ontario at 32 per cent.
- Some of the main challenges to starting up a business
previously reported by entrepreneurs appear to be easing:
- Fewer small business owners (22 per cent) are logging
long hours in 2010 than they were five years ago (36
- Time management is less of a concern to Canadian
entrepreneurs in 2010 (16 per cent) than it was in 2005
(36 per cent).
- Fifteen per cent cite financing the start up of a
small business as a challenge in 2010, compared to 27
per cent in 2005.
These are some of the findings of an RBC /Ipsos Reid survey
conducted from September 7 - 15, 2010. This online survey
of 1,273 entrepreneurs, who were either self-employed or owned
their own small business, was conducted via the Ipsos I-Say
Online Panel, Ipsos Reid's national online panel. The results
are based on a sample where quota sampling and weighting are
employed to balance demographics and ensure that the sample's
composition reflects that of the actual Canadian population
according to Census data. Quota samples with weighting from
the Ipsos online panel provide results that are intended to
approximate a probability sample. An unweighted, probability
sample of this size, with 100% response rate would have an
estimated margin of error of ± 3.8 per cent, 19 times
out of 20.
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For further information:
Margie McNeil, RBC Corporate Communications,
Angela Gordon, RBC Corporate Communications,