Two out of three plan to make investments in their business over next
TORONTO, Sept. 19, 2011 /CNW/ - Despite ongoing economic uncertainty,
two out of three (66 per cent) Canadian business owners are planning on
investing in the their company over the next two years, according to
the 2011 RBC Small Business Survey, conducted by Ipsos Reid. This
investment will be in areas such as new equipment (37 per cent), new
technology (29 per cent), new products and services (28 per cent), new
employees (11 per cent) and new processes (10 per cent).
"Most small business owners are investing in their companies, even in an
unsettled economy," said Mike Michell, national director, Small
Business, RBC. "Low interest rates are a driving factor, as well as
increased business owner awareness that future growth and
competitiveness depend on investments today. In fact, seven-in-ten
business owners (69 per cent) are confident that the equity they are
building in their company will help them meet their future goals."
One-in-three small business owners (34 per cent) did not invest over the
past two years in the areas of technology, new equipment, new
products/services and human resources. Their main reasons for not doing
economic uncertainty (37 per cent),
no need to invest in these areas (32 per cent), and
a lack of capital funding (11 per cent).
"For entrepreneurs unsure about investing in their company because of
economic conditions or other circumstances, speaking with their
business advisor can help them weigh their options," adds Michell. "A
small business advisor can provide advice to help entrepreneurs build
the right financial strategies and take on the challenges of today's
changing business environment."
Highlights from across Canada
In almost every province, nearly two-in-three (66 per cent) small
business owners plan to invest in their own companies. The exception is
Atlantic Canada, where nearly three-in-four (72 per cent) small
business owners plan to do so. There are some notable differences,
particularly in the different areas of investment.
On par with the national average, two out of three (66 per cent)
business owners in British Columbia plan on investing in their company
over the next two years.
B.C. entrepreneurs will focus their investments on new equipment (39 per
cent), new products and services (28 per cent), new technology (23 per
cent), new processes (12 per cent) and new employees (10 per cent).
Two out of three (64 per cent) business owners in Alberta are planning
on investing in their company over the next two years.
New equipment will be the main area of investment for Alberta
entrepreneurs (40 per cent). Additional investments will be in new
products and services (27 per cent), new technology (21 per cent), new
processes (11 per cent) and new employees (seven per cent).
Manitoba and Saskatchewan
Small business owners in Manitoba and Saskatchewan are least likely to
invest in their company over the next two years (63 per cent),
Prairie entrepreneurs lead the country when it comes to investing in new
equipment (41 per cent), but have the lowest percentage (six per cent)
of entrepreneurs with plans for new employees. Other investments
include: new technology (31 per cent), new products and services (28
per cent), new processes (nine per cent).
Two out of three (67 per cent) business owners in Ontario are planning
on investing in their company over the next two years.
Investment will be in areas such as new equipment (33 per cent), new
technology (34 per cent), new products and services (28 per cent), new
processes (11 per cent) and new employees (nine per cent).
Two out of three (67 per cent) business owners in Quebec are planning on
investing in their company over the next two years.
The focus for Quebec's entrepreneurs will be mostly on new equipment (40
per cent), but other areas of investments include new products and
services (29 per cent), new technology (20 per cent), new employees (18
per cent) and new processes (eight per cent).
Atlantic Canadian entrepreneurs lead the country when it comes to plans
for investing, as nearly three-in-four (72 per cent) plan on investing
in their company over the next two years.
They also have the highest percentage of entrepreneurs planning to
invest in new technology (38 per cent) and new products and services
(30 per cent). Other areas include new equipment (35 per cent), new
employees (17 per cent) and new processes (12 per cent).
Top Three Tips for Investing in Your Business:
Invest in yourself - and ask others to do so as well - Use your own savings and investments, find potential investors
(including family) to buy share of your business or reinvest the
profits back into your company. This is not only the least expensive
option to build equity, but making a strong personal investment in your
business can make it easier to secure future financing from a bank or
Secure short-term financing - An operating line is ideal for those starting a business, or for
seasonal businesses with a fluctuating cash flow. Typically, it takes
one year to pay back, so it's useful for immediate needs, like
supplies, inventory and payroll.
Arrange long-term financing - A term loan or leasing is ideal for big-ticket items, like vehicles,
or office renovations, and has a longer repayment term - usually of one
to five years.
These are some of the findings of an RBC /Ipsos Reid survey conducted
from July 29 to August 8. This online survey of 1,400 entrepreneurs,
who were either self-employed or owned their own small business, was
conducted via the Ipsos I-Say Online Panel, Ipsos Reid's national
online panel. The results are based on a sample where quota sampling
and weighting are employed to balance demographics and ensure that the
sample's composition reflects that of the actual Canadian population
according to Census data. Quota samples with weighting from the Ipsos
online panel provide results that are intended to approximate a
probability sample. An unweighted, probability sample of this size,
with 100 per cent response rate would have an estimated margin of error
of ±3 per cent, 19 times out of 20.
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employees who serve close to 15 million personal, business, public
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and 55 other countries. For more information, please visit rbc.com.
For further information:
Margie McNeil, RBC Corporate Communications, 905 606-1425
Angela Gordon, RBC Corporate Communications, 905 816-5650