- American Express survey finds positive glimmer in economic gloom as
nearly a third of Canadian small businesses plan staff increases over the
next six months -
MARKHAM, ON, April 22 /CNW/ - Canadian small business owners show a
gritty determination as they manage through the economic downturn and remain
upbeat despite feeling the pressure. While most are feeling the stress of the
current economic downturn a full 70 per cent say they are confident that their
business situation will improve over the next six months. In the meantime they
are taking bold and sometimes extraordinary steps like cutting their own
salaries to keep afloat.
The American Express Small Business Monitor, published today, reveals
that business owners are willing to make sacrifices to protect their business,
but that even in these turbulent times the vast majority (76%) believe that
the rewards and opportunities from running your own business outweigh the
risks and challenges.
The survey found that one in four Canadian small business owners have
stopped taking a personal salary, and another quarter have invested personal
funds in order to continue to support employees during the current economic
downturn. Other cost-saving strategies include cutting back on expenses (60%),
curbing personal spending (48%), and increasing customer value (46%) to
improve cash flow and manage their business during the current downturn.
Keeping with the long-held belief that a business' greatest asset is its
employees, the survey's respondents indicated a willingness to make sacrifices
to retain talent and keep employees happy, including the continuation of
bonuses (30%) and pay raises (28%).
The big difference between now and the last American Express Small
Business Monitor in the fall is that at that time most business owners were
hoping to ride out the downturn without making many changes to their plans or
practices. Now many entrepreneurs report that they have already taken steps to
protect their business finances and cut expenses, including:
- Hiring freeze (38%)
- Salary freeze (34%)
- Stopped taking a personal salary (25%)
- Investing personal assets in the business (34%)
- Introduced flexible work hours for employees (26%)
- Reduced employee hours (25%)
- Re-evaluated supplier relationships (29%)
However, the American Express Small Business Monitor shows that
relatively few (17%) have resorted to laying off staff, and only eight per
cent believe they may have to consider doing so over the next six months.
Instead, 28 per cent expect to be hiring over the next six months, even if
it's part-time or contract staff.
"While Canadian small business owners acknowledge and clearly feel the
impact of today's economy, it's inspiring to see they have faith in their
business and are willing to stand behind it through these hard times," said
Howard Grosfield, VP & General Manager, Small Business Services, American
Express Canada & International. "Although two-thirds of those surveyed
consider themselves 'stressed out' about their current financial position, it
is enlightening to see that they believe they can weather the storm and are
willing to invest in their employees and their business model."
Despite the economic environment, more than 80 per cent of small business
owners are still willing to take a certain degree of business-related risks.
Examples of the sorts of "moderate risks" small business owners are willing to
- Investment in new equipment or other capital expenditures (52%)
- Use of personal assets to cover costs (32%)
- Use of a line of credit or bank loan to pay creditors (30%)
- Extended payment terms for customers (18%)
- Devotion of additional capital to salaries (15%)
Small business owners say they are also spending more time managing their
existing customer relationships and doing more to offer greater value to their
customers. Many are rethinking their product offerings and innovating product
lines to stay ahead of competitors.
Of course, few are weathering the recession without some battle scars.
Two in five (42%) are worried things will get worse for their business before
it gets better, and 26 per cent of respondents indicated concerns about
meeting payroll. One in 20 are worried about making it through the next six
months, saying bankruptcy is a very real possibility.
"Without a doubt it's a sobering time financially for many Canadian
business owners, but the tenacity and positivity expressed in this survey
provide a welcome sense of hope among this important sector that has been
widely credited as being the backbone of the Canadian economy," Grosfield
About the American Express Small Business Monitor
From March 18 to March 24, 2009, Angus Reid Strategies conducted an
online survey on behalf of American Express Small Business Services among a
randomly selected, representative sample of 502 Canadian small business owners
who currently have two to 100 employees. The margin of error for the total
sample is +/- 4.4%, 19 times out of 20. The results have been statistically
weighted according to the Statistics Canada Business Register's most current
business size and region data to ensure a representative sample of the entire
population of small business owners in Canada. Discrepancies in or between
totals are due to rounding.
About American Express Small Business Services
American Express Small Business Services (SBS) is dedicated exclusively
to the success of small business owners and their companies. SBS supports
business owners with exceptional service. With tailored products and services,
the team delivers purchasing power, flexibility, control and rewards to help
customers run their business. Specifically, business owners can leverage an
enhanced set of products, tools, services and savings, including charge and
credit cards, robust online account management capabilities and savings on
business services from an expanded lineup of partners. To obtain more
information about SBS visit www.americanexpress.ca/smallbusiness.
About American Express in Canada
American Express in Canada operates as Amex Bank of Canada and Amex
Canada Inc. Both are wholly owned subsidiaries of the New York based American
Express Travel Related Services Company, Inc., the largest operating unit of
the American Express Company. Amex Bank of Canada is the issuer of American
Express Cards in Canada. Amex Canada Inc. operates the Corporate Travel,
Travel Services Network and Travellers Cheques divisions in Canada. American
Express opened its first offices in Toronto and Hamilton in 1853 and now
employs 3,700 Canadians coast-to-coast.
For further information:
For further information: or a full copy of the report, please contact:
Jennifer Link or Tom Sargent, Edelman, (416) 979-1120 ext. 235/250,
firstname.lastname@example.org, email@example.com; Jolene Price, American
Express Canada, (905) 474-8746, firstname.lastname@example.org