An annual study from Sage finds Canadian SMBs are more bullish about the economy, and about how mobility can help their businesses, even though that comes at a cost of being contacted outside of traditional working hours.
Canadian SMBs are more bullish about the economy than at any time in the last four years. They are also bullish about how mobility can help their businesses, even though that comes at a cost of being contacted outside of traditional working hours.
These are among the findings of the 2014 Sage Business Index, based on interviews with 13,710 decision makers from SMBs in 18 countries, including 747 in Canada, between July 9 and August 29, 2014. It is the fourth such annual study.
For the first time in four years, Canadian SMBs, and those around the world, are more optimistic than pessimistic, with scores rising above 50 points across all three areas surveyed: their own prospects, their national economies, and the global economy. Canadian companies were, however, more bullish about their own individual prospects than those of the national or global economies. Their view of their own prospects saw confidence rise 0.68 to 67.48 over the last year, 3.34 points above the global average of 64.14. However, while they believe the Canadian economy is improving, confidence has fallen 3.39 points to 56.04 over the last 12 months. Confidence about the global economy is also down 1.35 points to 51.20 over the last year.
“We see this confidence of Canadian business owners as a key part of the study,” said .
That confidence manifests itself in good growth and staffing expectations. More than half of Canadian business decision makers (54 per cent) expect revenue to grow in the next year by an average of 2.5 per cent (which is in line with global numbers). More than one-third (37 per cent) of the Canadians also expect that the number of people employed by their company will increase in the next year by 1.6 people per company, compared with just 9 per cent who say they expect to reduce staffing levels.
“Canadians are very optimistic by nature, so the fact that small business owners feel their revenues will increase isn’t a huge surprise, but it is good news,” Rumer said. “The fact they also plan to hire 1.6 people per business is very good. It doesn’t sound like much but on a small business level, that’s very significant.”
Canadian businesses were also slightly more open to risk with more than half (53 per cent) of Canadian business decision makers describing themselves as risk seekers, up 1 per cent from last year. This puts them well above the global average of 49 per cent, but marginally behind the U.S., at 54 per cent.
“Since Canadians are by definition cautious, that means they see themselves as calculated risk takers, which is good by definition,” Rumer said.
The Sage Business Index also had some interesting findings about mobility. 44% of Canadian SMBs said that mobile technology has had a positive effect on their work-life balance. That might seem counter-intuitive, since taking calls after work would seem to infringe on personal space, but Rumer thinks there is an explanation.
“SMBs work a large number of hours through the week, often after the kids have gone to bed,” he said. “Mobility allows them to focus in on their business when the time is right. It lets them make that choice.”
The Index also found that nearly half of Canadian SMB owners believe that their customers should be able to contact them 24/7. Rumer said that while some of that reflects a willingness to work some after hours, it means more than that.
“Much more interactive web sites are available today, increasing self service capability, which is a way for prospects to interact to get information or make orders,” he said.
Only 54% of respondents said that mobile technology lets them continue working when on the move, which seems low.
“I would have thought it would have been ranked higher, but it may reflect a literal meaning that you can seldom do real work while travelling in a car,” Rumer said. “The main advantage of mobile is increased ability to respond much more quickly to your customers.”
Another finding was that Canadian SMBs are relatively unlikely to do business overseas, with 62 per cent saying that their company does no business in a country outside their own. That didn’t surprise Rumer.
“A very high number of businesses do business within 80 km of where they are located,” he said. “Even though many have websites, they promote mainly in their geographical area.”
SMBs did say they could export more if they had more government support. Only 18 per cent said sufficient support exists now. Almost one-third (31 per cent) said the government should provide greater financial incentives to export, while 20 per cent believe the government should be championing their businesses abroad.
Rumer said these findings tend to reflect misconceptions and the fact that the bureaucratic structure is too difficult for many SMBs to navigate effectively.
“Many of the programs they want are in place now, but they aren’t aware of this,” he said. “Government needs to make it simpler for small business units to leverage its services. They need to make things simpler.”
Finally, 75% of Canadian SMB owners said they believe their company has adequate data protection, privacy and cyber security measures in place.
“That number has less value than some of the others, because we don’t know if they actually are well protected,” Rumer said. “It does show that level of confidence that they are protected, because they haven’t been cybertargeted. They haven’t been bitten.”