Canadian SMEs shrug off uncertainty and eagerly anticipate growth in 2017

Global study of more than 3,200 business leaders finds SMEs in Canada and around the world are confident they will thrive in 2017 and beyond

TORONTO, March 1, 2017 /CNW/ - Canadian Small and Medium-sized Enterprises (SMEs)1 are shrugging off concerns of economic and political uncertainty and instead remain confident in their abilities to innovate, generate revenue, and grow their businesses, no matter the macro outlook.

SMEs in Canada are feeling optimistic about the economy, confident about their future business performance and believe they have the strategies in place to thrive in an age of uncertainty, according to the American Express® Global SME Pulse2, a survey that polled senior executives and decision-makers across SMEs in 15 countries.

"Uncertainty is the status quo; times may change, but as a trusted advisor and partner to Canadian SMEs, we know the needs, worries, and aspirations of business owners remain consistent," said Paul Roman, Vice President and General Manager of Global Commercial Payments at American Express Canada.

"Our research shows SMEs are laser focused on growing their businesses, and reaching new customers at home and globally. It's great to see so many looking to invest in innovation and emerging technologies, but the results make it clear that even the most enterprising businesses can find it difficult to access the financing they need."

Revenue growth on tap for 2017

SMEs worldwide remain confident in their ability to deliver increased revenues and profitability. More than half (55 per cent) of the Canadian SMEs surveyed expect to see substantial revenue growth of at least four per cent over the next 12 months, with 50 per cent of them willing to take big risks to gain big rewards. In fact, 42 per cent believe their company is more likely to be a disruptor than be disrupted.

Key challenges include economic and political uncertainty

While SMEs are optimistic about the economy and their own business (42 per cent positive compared to 12 per cent negative), they also identify areas for concern. Ranking number one on their list? Economic uncertainty. In fact, 51 per cent of Canadian SMEs rank economic uncertainty as their number one threat, followed by political uncertainty both globally and in Canada. Canadian SMEs also view changes to domestic policies, laws or regulations as a leading threat to business performance (21 per cent).

Innovation a must, but confidence is lacking on implementation

As part of the research, Canadian SMEs agree that digital technology provides new business opportunities for their companies (63 per cent). However, only 18 per cent feel confident that they were very effective in developing and implementing innovations; a business challenge that 64 per cent of SMEs plan to work hardest to address over the next three years.

Overall, the top three priorities for SMEs when it comes to digital innovation include:

  1. Workforce productivity tools (69 per cent);
  2. Communications systems (67 per cent); and
  3. User-friendly and mobile applications (67 per cent).

Canadian SMEs are expanding at home and globally

Despite uncertainty, SMEs globally and in Canada are focusing on growth and expansion strategies to improve their financial performance. More than half (51 per cent) agree that it's easier to access new export markets now than it was three years ago, and 27 per cent said expanding into new international markets is a key focus. In addition, 41 per cent of Canadian SMEs say expansion into new domestic market segments will be a top priority for their business over the next three years.

Thinking outside the box on finance to fund growth

Many SMEs globally struggle to finance the investment required for growth. Almost half of Canadian SMEs (48 per cent) say they face difficulty accessing the finance they need to grow their business while 53 per cent say that inadequate cash flow affects their ability to pay suppliers on time. As a result, Canadian SMEs plan to use less conventional options over the next year when it comes to sourcing funds for their business including:

  • Crowdsourcing (32 per cent);
  • Flexible access options such as credit cards (30 per cent);
  • Peer-to-Peer options (30 per cent); and
  • Supply chain financing (30 per cent).

About the Research

Oxford Economics carried out a telephone survey among 3,205 owners, executive board members (including Chief Executives, Chairs, Managing Directors, General Managers) and Chief Financial Officers / Heads of Finance in SMEs with between 10 and 250 employees and revenues of up to $30 million. The companies were based in 15 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Singapore, Spain, the UK and USA. The survey interviews were conducted in October and November 2016.

The research forms the basis of a study into the factors that drive SME success. The Global SME Pulse: Strategies for Success in an Uncertain World will be published later this year by Oxford Economics and examines the operating strengths that enable SMEs to thrive.

About American Express Global Commercial Payments

Through its Global Commercial Payments division, American Express offers a suite of payment and lending products that help businesses and organizations of all sizes gain financial savings, control and efficiency. Global Commercial Payments provides solutions for travel and everyday business spending, cross-border payments, global currency solutions, and business financing.

To learn more about Global Commercial Payments, please visit business.americanexpress.com/ca.

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 charge and credit cards, with outstanding products like The SimplyCash™ Card from American Express ©, The American Express® Gold Rewards Card, and the American Express® AeroplanPlus® Gold Card. American Express opened its first offices in Toronto and Hamilton in 1853. For more information, visit AmericanExpress.ca or connect with us at Facebook.com/AmericanExpressCanada and YouTube.com/AmericanExpressCAD.

References
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1 An SME is classified as a business having between 10 and 250 employees and revenues of up to $30 million.
2 A representative sampling of senior executives and decision-makers from SMEs with revenues of up to $30 million across 15 countries, carried out in October and November 2016, by Oxford Economics.

SOURCE American Express Canada

For further information: Nicola McGroarty on behalf of American Express Canada, nicola.mcgroarty@northstrategic.com


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