Research shows a majority of business owners under 35 are planning to expand in the next 3 years, while Boomers say they're holding the line and eyeing retirement
TORONTO, Oct. 18, 2013 /CNW/ - A new CIBC (TSX: CM) (NYSE: CM) poll by Leger shows that business owners under 35 years of age are twice as likely to be planning a business expansion when compared to owners 55 and over. While this trend suggests that younger owners will play a key role in driving future economic growth, it also highlights the need for these owners to have a strong business strategy and access to additional capital to make these plans a reality.
Key findings of the poll include:
- In total, 39 per cent of Canadian business owners say they plan to expand in the next three years
- Within these findings, 60 per cent of business owners 35 and under plan to expand, while only 33 per cent of those 55 and over said the same
- When asked why they were not interested in expanding their business, the most common answer among business owners 55 and over was that they are planning to wind down the business to retire (54 per cent)
- Regionally, businesses in BC (30 per cent) were the least likely to be expanding.
"There's a clear split in the market, with a new generation of small business owners looking to fuel growth and expansion, while some experienced owners are thinking about transitioning out of business and into retirement," said Jon Hountalas, Executive Vice-President of Business Banking, CIBC.
Younger Owners Looking to Grow but May Need Advice, Support
With the majority of business owners 35 and under in the survey planning to expand in the next three years, Mr. Hountalas noted that it is important to have the capital to invest in the expansion, and the cash flow to support the business after it grows.
"While it's encouraging to see a new generation of business owners with plans to drive growth in the next few years, it's important to enter any growth phase with a plan for both your business and your finances," said Mr. Hountalas. "Growth can sometimes take longer than planned, or can happen faster than you expect, and you need to ensure you have built in the financial flexibility to deal with either outcome."
Expansion Dollars Going Towards Brand Building, Increased Capacity
When asked where they plan to invest in expanding their business, the top three responses from Canadian business owners are:
- Investing in marketing initiatives (46 per cent)
- Increasing capacity/production (44 per cent)
- Expanding into new markets within Canada (41 per cent)
"Our poll shows that small businesses with expansion plans are looking to build their brand, their capacity, and their reach within their industry," added Mr. Hountalas. "These can be excellent long-term investments and owners need to understand the time it may take before these investments start to pay for themselves. This is why having an up front conversation with an advisor about how to fund this type of expansion is critical to long term success."
More information for business owners is available online at: https://www.cibc.com/ca/small-business.html.
KEY POLL FINDINGS
Percentage of Canadian small business owners planning to expand their business over the next three years, by region:
Percentage of Canadian small business owners planning to expand their business over the next three years, by age:
|Less than 35||60%|
Results are based on a CIBC poll conducted online by Leger, which surveyed 801 decision-makers in Canadian businesses. The associated margin of error for a probabilistic sample of the same size is +/-3.46%, 19 times out of 20. Polling was conducted between June 3 and 10, 2013.
CIBC is a leading North American financial institution with nearly 11 million personal banking and business clients. CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, and has offices in the United States and around the world. You can find other news releases and information about CIBC in our Press Centre on our corporate website at www.cibc.com.
For further information:
Kevin Dove, Head of External Communications, CIBC, 416-980-8835, [email protected]