A new CIBC poll conducted by Leger Marketing reveals 85 per cent of Canadian small business owners feel optimistic about the future success of their business, and many plan to expand in the next three years.
The poll also shows new businesses are more eager to invest in an expansion than businesses that are established.
Highlights of the poll include:
85 per cent of Canadian small business owners surveyed said they are optimistic about the future success of their company
43 per cent of small business owners surveyed said they plan to expand their business within the next three years – including 59 per cent of small business owners in the start-up phase, while only 34 per cent of more established business owners are planning to expand
Businesses in Alberta (46 per cent) and in Manitoba/Saskatchewan (47 per cent) were among the most likely to want to expand, while businesses in Ontario (40 per cent) were less likely to be planning an expansion
While economic uncertainty topped the list of obstacles that business owners said they needed to overcome, having access to adequate capital/financing and managing fluctuations in cash flow also ranked among the most significant obstacles to growth
“It’s encouraging to see so many Canadian small business owners sharing a high-level of optimism about the future success of their enterprise,” said Jon Hountalas, CIBC’s Executive Vice President of Business Banking. “With small and medium size businesses playing such an important role in Canada’s overall economic future, this optimism bodes well for Canada’s future growth.”
The poll also reveals that among small business owners who have gone through an expansion phase in the past, having access to adequate capital/financing and fluctuations in cash flow ranked among their greatest obstacles to making their expansion succeed.
“While it’s positive to see that start-ups are eager to expand, the poll indicates that there are lessons to be learned from experienced businesses who have undergone expansion phases in the past,” continued Mr. Hountalas. “And that’s why it’s so important for a business owner to seek advice as their business evolves. A Business Banking Relationship Manager, for example, can ensure your expansion plans are strategically aligned and include components of financing and cash flow that work to meet the goals of your business.”
The poll also reveals that most businesses with an eye on expansion are focused on growing their business by investing in their existing operations domestically, while only a quarter of small businesses said they planned to expand their business outside of Canada.
Among Canadian small business owners planning to expand their business within the next three years, the following were ranked as the top ways they planned to expand:
46 per cent said they are planning to increase capacity/production
41 per cent said they are planning to increase marketing initiatives
39 per cent said they are planning to expand into new markets within Canada
30 per cent said they are planning to introduce a new product
25 per cent said they are planning to expand their business outside of Canada
21 per cent said they are planning to make a strategic acquisition
Additional Advice for Small Businesses Looking to Expand
Having worked with thousands of expanding businesses, CIBC relationships managers are experienced in helping growing companies get what they need to succeed and offer the following tips:
Have a business plan: business plans are critical for new business and should be reviewed and updated annually, and especially when you are contemplating a major change to your business. Having an up-to-date plan demonstrates that you have fully thought through your expansion strategy and its implications to the business.
Consult with your relationship managers: getting a point of view from external partners and advisors gives you some arm’s length perspective that can add clarity and provide new insights. External consultants also provide invaluable advice to protect your business from external factors and unforeseen events.
Develop a realistic financial plan: ensure that you have a financial strategy that supports and complements your expansion strategy. Consider the implications of expansion on your cash flow and make sure that your company will not find itself short of funds during this critical time.