Mastering the financials of running a business is a key priority for two thirds of SBOs, reveals American Express Small Business Monitor
MARKHAM, ON, Sept. 30, 2014 /CNW/ - Running a successful business depends heavily on managing your business finances, which is why small business owners (SBOs) often decide to take it on themselves. The quarterly American Express Small Business Monitor reveals over three quarters (78%) of SBOs consider themselves responsible for their business' finances. However, 49 per cent of SBOs actually wish they had known more about financial management when they decided to start their own business.
While this is top priority for business owners, it isn't their preferred responsibility. Over two thirds (68%) of SBOs say they would rather focus on building their business than doing their own finances. Additionally, nearly half (41%) believe the financial side of running a business bogs down efforts to build it. While SBOs may struggle with balancing their must-do responsibilities and preferred tasks, they aren't letting their desired roles take precedent and are keeping business finances top of their list.
SBOs go with the cash flow
Whether or not SBOs consider themselves financially savvy, there's one thing that's definite: SBOs recognize the importance of cash flow management. In fact, almost half (40%) of business owners believe cash-flow management is the most important factor of business finance. Yet almost 20 per cent of SBOs also believe it is the most challenging part.
Despite the importance of cash flow management, the Monitor found a decline in the frequency of evaluating cash flow projections. Almost one third (30%) say forecasting and budgeting is a waste of time because it's usually unpredictable, and 11 per cent of SBOs only develop/revise cash flow projections every one to two weeks, down 12 points from 2012 (23%).
"Investing more into forecasting and developing cash flow projections is an area that requires more attention from SBOs," said Athena Varmazis, Vice President and General Manager, Small Business Services, American Express Canada. "Re-establishing regular routines of evaluating cash flow projections will continue to lead SBOs down a successful path."
The economic downturn enabled SBOs to make necessary changes
The stability of the economy has enabled SBOs to place a higher emphasis and take a more active role in managing the finances of their business. Nearly two thirds (63%) of all SBOs say the recession prompted them to put safety nets in place to ensure the long term survival of their companies. With the economic challenges behind them, they have made significant changes to improve their business models.
Taking key learnings from the last economic downturn, over three quarters (76%) of all SBOs believe they are well prepared should another economic downturn occur. Additionally, 39 per cent of SBOs report they have a savings fund in place as a safety net in case of an economic downturn.
SBOs display upbeat attitude towards their business outlook
The significant increase in optimism levels from this time last year signals happier days for Canadian SBOs. In fact, almost two-thirds (63%) of SBOs remain hopeful about their future financial position, up 19 points since August 2013 (44%). With notable improvements across the board, business owners not only demonstrate a sense of stability but eagerness to further build their businesses.
"The increase in optimism over the past year reveals business owners are looking at the glass half full," said Varmazis. "They continue to invest in the economy and their individual businesses to forge ahead."
Over half (52%) of SBOs report their business' current financial position has improved, up 16 points since August 2013 (36%).More than one quarter (26%) of SBOs are willing to take above average or significant risks for their business in the next 6 months, up 8 points since August 2013 (18%).
About the American Express Small Business Monitor
From Aug 7 and Aug 20, 2014 Rogers Custom Research and Media Insights conducted an online survey on behalf of American Express Small Business Services with a sample of 727 Canadian small business owners each employing between 2 and 100 people. The margin of error for the total sample is +/- 3.6%, 19 times out of 20. In order to ensure the results are representative of the entire population of small business owners in Canada, the data have been statistically weighted for small business by region according to Statistics Canada. Respondents were located across Canada and came from a variety of industries, including health, social services, education, tech, sales and skilled trades. Due to rounding, some results may add to over 100 per cent.
About American Express Small Business Services
American Express Small Business Services (SBS) is dedicated exclusively to the success of small business owners and their companies. SBS supports business owners with exceptional service. We offer tailored products and services that deliver purchasing power, flexibility, cash flow management and rewards to help customers run their business. Specifically, business owners can leverage an enhanced set of products, tools, services and savings, including charge and credit cards, robust online account management capabilities and savings on business services from an expanded line-up of partners. To obtain more information about SBS, visit www.amexforbusiness.ca or www.facebook.com/AmefforBusiness.
SOURCE: American Express
For further information: or a full copy of the report, please contact: Christina Peck, (416) 644-2295, [email protected]