Research report identifies four winning growth strategies used by successful entrepreneurs
- Four out of 10 SMEs are successfully meeting the challenges associated with growth, while 38% of Canadian small businesses experienced negative numbers or no growth over the past three years.
- The most successful entrepreneurs said their winning growth strategy is to look after customers and employees, innovate and invest in their business.
MONTREAL, Oct. 20, 2015 /CNW Telbec/ - Small and medium-sized enterprises (SMEs), the drivers of Canadian job creation, continue to pursue growth opportunities despite persistent challenges in increasing employee numbers and sales, according to a survey released by the Business Development Bank of Canada (BDC) as part of BDC Small Business WeekTM 2015.
"Revenue, profit and jobs are the three dimensions that determine the degree to which an SME is growing, and the findings are quite sobering, particularly for the smallest businesses," said Pierre Cléroux, BDC Vice President Research and Chief Economist.
While Canada's medium-sized businesses (100–499 employees) are in a better position to maintain a sustained or strong pace of growth, the fact remains that 6 out of 10 SMEs (60%) showed weak or zero growth, or even negative growth, during the last three years. Forty-six percent of the smallest businesses (1 to 4 employees) are showing zero to negative growth.
Business leaders cited rising operating costs (64%) as their top obstacle to growth, followed by difficulties in hiring and retaining qualified personnel (55%) and external competition (48%).
However, there is a silver lining to some of the survey results. Thirty percent of SMEs did experience strong growth and profits. These businesses saw their revenue and profit increase faster than their number of employees, suggesting some level of improvement in productivity.
"Not surprisingly, there are solutions to turning this ship around and one of the most important—and we cannot repeat this often enough—is for Canadian entrepreneurs to invest in technologies to make their operations more efficient," added Cléroux.
Winning strategies to help reverse the trend
The research report identifies four winning growth strategies used by entrepreneurs with successfully growing businesses:
- Be a client-centric business (cited by 99% as "very" or "moderately" important)
- Build your talent pool (cited by 86%)
- Stay on top of your game, innovate (81%)
- Invest to be the best (in production capacity or advanced technologies) (75%)
"Running a business these days clearly is no walk in the park," added Pierre Cléroux. "Successful entrepreneurs show you can improve your chances by doing what amounts to fairly basic things—looking after customers and employees, innovating and investing—that are often overlooked," he added.
"Better planning can also provide a significant boost, with the largest SMEs far more likely to do strategic and growth planning than the smallest ones," Cléroux said. "Strategic and growth planning can pay off in a clearer vision, coordinated action and better results."
Ad Hoc Research conducted the telephone survey of 1,015 SME leaders with 1 to 499 employees between April 14 and May 13, 2015, on behalf of BDC. Results were weighted according to region and business size to ensure representative findings. The sample's margin of error is +/- 3.1%.
For more detailed research results, download the full BDC study.
About BDC Small Business WeekTM
BDC Small Business WeekTM runs from October 18 to 24 under the theme "Knock down barriers. Dare to grow." Now in its 36th year, BDC Small Business WeekTM celebrates entrepreneurship at the local, provincial and national levels during the third week of October each year. BDC's flagship event brings together thousands of business people at hundreds of events across the country to learn, network and socialize.
BDC is the only bank dedicated exclusively to entrepreneurs. With more than 100 business centres and over 32,000 clients across Canada, it offers loans, investments and advisory services. BDC's purpose is to support Canadian entrepreneurship with a focus on small and medium-sized businesses. To learn more, visit www.bdc.ca.
SOURCE Business Development Bank of Canada
For further information: Maria Constantinescu, BDC Public Relations, [email protected], 514-518-1577