Solid planning and good advice key to small business success: Scotiabank study



    TORONTO, Oct. 2 /CNW/ - While issues of growth, increasing income and
reducing costs top the business goals of Canadian small businesses, less than
half have mapped out their plans for success by developing a formal business
plan. A study conducted by TNS Canadian Facts for Scotiabank also found that
while many small business owners think it is important to get advice in key
areas, not as many are actually seeking that advice.
    "Whether a small business is just getting started, growing and maturing,
or winding down - whatever the owner's goals are - the key to success lies in
having solid fundamentals," said Kyle McNamara, Head of Small Business at
Scotiabank. "A sound business plan and the right team of advisers such as a
banker, accountant and lawyer can help an owner achieve their goals and
navigate any challenges they may face. These fundamentals are particularly
important in managing through periods of economic and financial market
uncertainty, such as the rise of the dollar and recent market volatility."
    Small business owners most often cited growth-related issues such as
generating double-digit growth and expanding products and services (88 per
cent), increasing income or profit margin (89 per cent) and reducing costs (60
per cent) as their top goals. In terms of what keeps them up at night, the
challenges they cited most often include financial concerns at 30 per cent
(includes expenses, capital and cash flow) staffing issues at 22 per cent and
competition at 20 per cent. Yet, only 42 per cent of small business owners
have a formal business plan.
    "Creating a well thought out business plan helps identify practical
strategies to overcome business challenges and take advantage of
opportunities. It's really a roadmap to success. We realize numerous demands
on a small business owner leave little time to invest in developing a
comprehensive business plan, so we've done something to help," said McNamara.
"Scotiabank has recently launched a free online writing tool, the Scotia Plan
Writer for business(TM), available to all entrepreneurs in an easy-to-use
format to help them arrange their business goals into a comprehensive plan."
    Small business owners note that advice in key areas is important to
success. Entrepreneurs cited taxation advice as the most important (85 per
cent), followed by advice on growing their business (80 per cent) and cash
flow management (78 per cent). Surprisingly, despite the high degree of
importance placed on these matters only 51 per cent of small businesses seek
taxation advice from a professional advisor, while only 16 per cent seek
business growth advice, and 14 per cent seek cash flow management advice.
    "Once a small business owner's vision is put into a formal plan, a team
of advisers such as a business banker, accountant or lawyer, can add support
to give you more time to manage your business," continues McNamara. "We invite
Canadian entrepreneurs and small business owners to talk to us. Our expert
team of small business bankers can help identify strategies and solutions to
address day-to-day financial needs, as well as provide advice, information and
banking services that can be tailored to individual business objectives."
    The Scotiabank Small Business Study is an online survey of Canadian small
business owners. For the purposes of this research, a 'small business' was
defined as a company with less than $5 million in annual revenue. A total of
1,190 businesses participated in the survey.
    The sample for the survey came from two sources. Small business owners
were identified from TNS Canadian Facts' online panel. This was augmented by a
sample of small businesses selected from D&B listings. This latter group was
recruited by telephone to participate in the online survey hosted on the TNS
survey website. Interviews were weighted to be representative of all small
businesses in terms of revenue and region. The online survey took place
between July 16th and August 6th, 2007.

    Scotiabank is one of North America's premier financial institutions and
Canada's most international bank. With almost 60,000 employees, Scotiabank
Group and its affiliates serve approximately 12 million customers in some 50
countries around the world. Scotiabank offers a diverse range of products and
services including personal, commercial, corporate and investment banking.
With $408 billion in assets (as at July 31, 2007), Scotiabank trades on the
Toronto (BNS) and New York Exchanges (BNS). For more information please visit
www.scotiabank.com.

    See: Small Business Study(*) conducted by TNS Canadian Facts for Scotiabank
Backgrounder, October 2, 2007

    Small Business Study(*) conducted by TNS Canadian Facts for Scotiabank
    Backgrounder, October 2, 2007


    
                       National and Regional Highlights
                       --------------------------------


    National Highlights
    -------------------

    While issues such as growth, increasing income and reducing costs top the
business goals of Canadian small businesses, less than half have mapped out
their plans for success by developing a formal business plan.

    With a high degree of importance placed on taxation advice (85%), business
growth advice (80%) and cash flow management advice (78%), it's surprising
that only 51% of small businesses seek taxation advice, only 16% seek business
growth advice, and 14% seek cash flow management advice.

    Top Business Goals
    1.  Increasing operating income or profit margin    89%
    2.  Growth-related issues(2)                        88%
    3.  Reducing costs                                  60%

    Key Challenges
    1.  Financial concerns(1)                           30%
    2.  Labour/staffing issues                          22%
    3.  Competition                                     20%

    Have Financial Plan                                 42%

    Most Important Business Advice
    1.  Taxation                                        85%
    2.  Growing the business                            80%
    3.  Cash flow management                            78%

    Most Business Advice Sought
    1.  Taxation                                        51%
    2.  Growing the business                            16%
    3.  Cash flow management                            14%


    Regional Highlights
    -------------------

    B.C.
    ----

    After the Prairies, small businesses based in B.C. are more likely to have
a financial plan (49%) than companies elsewhere in the country.

    Top Business Goals
    1.  Increasing operating income or profit margin    89%
    2.  Growth-related issues(2)                        86%
    3.  Reducing costs                                  60%

    Key Challenges
    1.  Financial concerns(1)                           33%
    2.  Labour/staffing issues                          25%
    3.  Competition                                     13%

    Have Financial Plan                                 49%

    Most Important Business Advice
    1.  Taxation                                        84%
    2.  Cash flow management                            75%
    3.  Growing the business                            73%

    Most Business Advice Sought
    1.  Taxation                                        62%
    2.  Growing the business                            16%
    3.  Business succession planning                    11%

    Prairies
    --------

    Small businesses in the Prairies are the most likely to have a formal
financial plan (51%).

    Given the high levels of economic growth witnessed in Alberta over the
past few years, it is not surprising to see that Prairie businesses are more
likely than their counterparts elsewhere in the country to cite labour and
staffing issues as a key challenge (38%).

    Top Business Goals
    1.  Increasing operating income or profit margin    92%
    2.  Growth-related issues(2)                        86%
    3.  Reducing costs                                  64%

    Key Challenges
    1.  Labour/staffing issues                          38%
    2.  Financial concerns1                             23%
    3.  Competition                                     15%

    Have Financial Plan                                 51%

    Most Important Business Advice
    1.  Taxation                                        90%
    2.  Cash flow management                            86%
    3.  Growing the business                            76%
      Reducing costs                                    76%

    Most Business Advice Sought
    1.  Taxation                                        55%
    2.  Cash flow management                            17%
    3.  Growing the business                            16%
      Improving administrative practices                16%

    Ontario
    -------

    While almost all (91%) of Ontario small businesses identify advice on
taxation issues as being important, only 60% actually seek advice on this
issue.
    Less than half (42%) of small businesses in Ontario have a financial plan
(compared to 51% in the Prairies).

    Top Business Goals
    1.  Growth-related issues(2)                        90%
    2.  Increasing operating income or profit margin    89%
    3.  Reducing costs                                  61%

    Key Challenges
    1.  Financial concerns(1)                           34%
    2.  Labour/staffing issues                          16%
    3.  Competition                                     15%

    Have Financial Plan                                 42%

    Most Important Business Advice
    1.  Taxation                                        91%
    2.  Growing the business                            80%
    3.  Cash flow management                            77%

    Most Business Advice Sought
    1.  Taxation                                        60%
    2.  Cash flow management                            15%
    3.  Growing the business                            14%

    Quebec
    ------

    Issues related to a competitive business environment have more resonance
among small business owners in Quebec than in any other region (35%). Quebec
small businesses are well below average in their tendency to seek professional
advice.  In particular, comparatively few look for help in taxation matters
(22%).

    Top Business Goals
    1.  Growth-related issues(2)                        90%
    2.  Increasing operating income or profit margin    86%
    3.  Improving administrative practices              60%

    Key Challenges
    1.  Competition                                     35%
    2.  Financial concerns1                             27%
    3.  Keeping/finding customers                       16%

    Have Financial Plan                                 32%

    Most Important Business Advice
    1.  Growing the business                            85%
    2.  Improving administrative practices              73%
    3.  Cash flow management                            72%

    Most Business Advice Sought
    1.  Taxation                                        22%
    2.  Growing the business                            21%
    3.  Improving administrative practices              16%

    Atlantic
    --------
    Small businesses in Atlantic Canada place a high importance on taxation
advice (92%) and more likely to actually seek this advice (65%) than small
businesses elsewhere in the country.

    Top Business Goals
    1.  Increasing operating income or profit margin    89%
    2.  Growth-related issues(2)                        88%
    3.  Cash flow management                            75%

    Key Challenges
    1.  Financial concerns1                             37%
    2.  Labour/staffing issues                          21%
    3.  Competition                                     20%

    Have Financial Plan                                 40%

    Most Important Business Advice
    1.  Taxation                                        92%
    2.  Cash flow management                            85%
    3.  Growing the business                            82%

    Most Business Advice Sought
    1.  Taxation                                        65%
    2.  Improving administrative practices              20%
    3.  Reducing costs                                  18%
      Business succession planning                      18%


    (1) Includes expenses, capital and cash flow.
    (2) Includes generating double-digit growth, expanding products and
        service, expanding number of employees, expanding to new geographic
        markets, acquire necessary capital to expand, and expanding business
        premises.

    (*) The Scotiabank Small Business Study is an online survey of Canadian
        small business owners. For the purposes of this research, a 'small
        business' was defined as a company with less than $5 million in
        annual revenue. A total of 1,190 businesses participated in the
        survey.
    

    The sample for the survey came from two sources. Small business owners
were identified from TNS Canadian Facts' online panel. This was augmented by a
sample of small businesses selected from D&B listings. This latter group was
recruited by telephone to participate in the online survey hosted on the TNS
survey website. Interviews were weighted to be representative of all small
businesses in terms of revenue and region. The online survey took place
between July 16th and August 6th, 2007.





For further information:

For further information: Patty Stathokostas, Scotiabank Public Affairs,
(416) 866-3625, patty_stathokostas@scotiacapital.com


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