Poll reveals new Canadian businesses most eager to expand, while established businesses more cautious
TORONTO, Sept. 12, 2012 /CNW/ - A new CIBC (TSX: CM) (NYSE: CM) poll conducted by Leger Marketing reveals 85 per cent of Canadian small business owners feel optimistic about the future success of their business, and many plan to expand in the next three years.
The poll also shows new businesses are more eager to invest in an expansion than businesses that are established.
Highlights of the poll include:
- 85 per cent of Canadian small business owners surveyed said they are optimistic about the future success of their company
- 43 per cent of small business owners surveyed said they plan to expand their business within the next three years - including 59 per cent of small business owners in the start-up phase, while only 34 per cent of more established business owners are planning to expand
- Businesses in Alberta (46 per cent) and in Manitoba/Saskatchewan (47 per cent) were among the most likely to want to expand, while businesses in Ontario (40 per cent) were less likely to be planning an expansion
- While economic uncertainty topped the list of obstacles that business owners said they needed to overcome, having access to adequate capital/financing and managing fluctuations in cash flow also ranked among the most significant obstacles to growth
"It's encouraging to see so many Canadian small business owners sharing a high-level of optimism about the future success of their enterprise," said Jon Hountalas, CIBC's Executive Vice President of Business Banking. "With small and medium size businesses playing such an important role in Canada's overall economic future, this optimism bodes well for Canada's future growth."
The poll also reveals that among small business owners who have gone through an expansion phase in the past, having access to adequate capital/financing and fluctuations in cash flow ranked among their greatest obstacles to making their expansion succeed.
"While it's positive to see that start-ups are eager to expand, the poll indicates that there are lessons to be learned from experienced businesses who have undergone expansion phases in the past," continued Mr. Hountalas. "And that's why it's so important for a business owner to seek advice as their business evolves. A Business Banking Relationship Manager, for example, can ensure your expansion plans are strategically aligned and include components of financing and cash flow that work to meet the goals of your business."
The poll also reveals that most businesses with an eye on expansion are focused on growing their business by investing in their existing operations domestically, while only a quarter of small businesses said they planned to expand their business outside of Canada.
Among Canadian small business owners planning to expand their business within the next three years, the following were ranked as the top ways they planned to expand:
- 46 per cent said they are planning to increase capacity/production
- 41 per cent said they are planning to increase marketing initiatives
- 39 per cent said they are planning to expand into new markets within Canada
- 30 per cent said they are planning to introduce a new product
- 25 per cent said they are planning to expand their business outside of Canada
- 21 per cent said they are planning to make a strategic acquisition
Additional Advice for Small Businesses Looking to Expand
Having worked with thousands of expanding businesses, CIBC relationships managers are experienced in helping growing companies get what they need to succeed and offer the following tips:
- Have a business plan: business plans are critical for new business and should be reviewed and updated annually, and especially when you are contemplating a major change to your business. Having an up-to-date plan demonstrates that you have fully thought through your expansion strategy and its implications to the business.
- Consult with your relationship managers: getting a point of view from external partners and advisors gives you some arm's length perspective that can add clarity and provide new insights. External consultants also provide invaluable advice to protect your business from external factors and unforeseen events.
- Develop a realistic financial plan: ensure that you have a financial strategy that supports and complements your expansion strategy. Consider the implications of expansion on your cash flow and make sure that your company will not find itself short of funds during this critical time.
More information for business owners is available online at https://www.cibc.com/ca/small-business.html.
CIBC is a leading Canadian-based global financial institution. Through our Retail and Business Banking, Wealth Management and Wholesale Banking businesses, CIBC provides a full range of financial products and services to 11 million individual, small business, commercial, corporate and institutional clients in Canada 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.
KEY POLL FINDINGS
|Percentage of Canadian small business owners who say they are optimistic about the future success of their business:|
|Percentage of Canadian small business owners who say they are optimistic about the future success of their business, by region|
|Percentage of Canadian small business owners who say they have plans to expand their business within the next three years, by business age:|
|2-5 years (start-ups)||59%|
|20 years +||34%|
|Percentage of Canadian small business owners who say they have plans to expand their business within the next three years, by region:|
|Among Canadian small business owners who say they plan to expand within the next three years, type of expansion they are planning for:|
|Increasing marketing initiatives||41%|
|Expanding into new markets in Canada||39%|
|Introducing a new product||30%|
|Expanding business outside of Canada||25%|
|Making strategic acquisitions||21%|
This Léger Marketing poll was conducted online in every province of Canada with a representative sample of 801 decision-makers in Canadian companies between July 3 and July 12, 2012. Final data were weighted by business size in order to obtain a representative sample of Canadian businesses. A probabilistic sample of 801 businesses would yield a margin of error of +/- 3.46%, 19 times out of 20.
For further information:
Sean Hamilton, Communications and Public Affairs CIBC: (416) 304-8456 or [email protected]