Despite facing economic uncertainty, including concerns about high inflation and rising interest rates, a recent report reveals that small business owners in Canada maintain a strong sense of optimism about their prospects. According to a Scotiabank survey, which involved nearly 1,700 Canadian small businesses with annual revenues ranging from $50,000 to $5 million, approximately two-thirds (66%) of respondents expressed very positive sentiments about the future of their businesses.
Key findings from the survey include:
- The optimism is particularly high in the Atlantic provinces (83%) and in Saskatchewan and Manitoba (82%).
- Approximately 76% of business owners stated that their business is currently performing better or at the same level as it was two years ago when the COVID-19 pandemic had yet to subside.
While there remains a cautious sense of optimism, small business owners are still grappling with various economic challenges. More than half (55%) of respondents indicated that they are still contending with increased material costs due to inflation. Additionally, approximately 24% mentioned ongoing supply shortages, while 23% reported challenges in keeping up with demand, and another 23% noted difficulties in hiring.
In light of these economic uncertainties, many businesses are prioritizing cost-cutting measures, which were identified as the top priority among both small businesses with annual revenue between $50,000 and $500,000, as well as larger ones with annual revenue between $1 million and $5 million. Businesses with annual revenue between $500,000 and $1 million are focusing on increasing sales through additional channels.
Jascha Jabes, Scotiabank’s Vice President of Small Business Banking, emphasized that small businesses are being resourceful in finding new markets, accessing customers, and improving customer service. He also highlighted the importance of businesses speaking with advisors to navigate economic challenges effectively and ensure they are positioned to address future uncertainties.