Number aiming to expand highest since 2005: PwC survey
In spite of all of the global economic turmoil, 82 per cent of Canadian private companies are planning to expand in the next 12 months, a significant jump from 66 per cent at the same time last year, and the most optimistic level since 2005, according to a seventh annual Business Insights survey from PricewaterhouseCoopers LLP.
That figure, from a poll taken last month, was actually even a percentage point higher than one taken in July, before major volatility hit global markets and the U.S. credit rating was downgraded.
And 61 per cent of respondents kept their target growth rate the same, the survey found. (PwC surveyed 306 companies in June and July, and then went back to 135 of the original participants last month.)
However, the bulk of respondents predicted slight or modest growth rates, and the number predicting aggressive growth rates fell, suggesting that companies have scaled down their expectations in response to the uncertainty, the report found.
As well, nearly three-quarters -- 74 per cent -- of respondents last month said they expected their business to do better in the next 12 months, but that fell from 83 per cent surveyed in June and July.
And how will they achieve growth? Almost two-thirds -- 62 per cent -- said they aim to improve sales and marketing, while 58 per cent hope to gain market share and 51 per cent want to expand operations. Almost half pointed to mergers and acquisitions. More than half said they had no plans to gain additional financing to fund growth.
With all of the global economic upheaval, "a lot of Canadian private companies have been stockpiling cash, bolstering their balance sheets and are well-positioned for opportunistic buys that may come along," said Kristian Knibutat, Canadian deals leader for PwC, in the report.
As well, noted Holly Allen, Canadian debt advisory leader for PwC, "most successful companies want to pay down their debt and tend to rely on their existing balance sheet rather than borrowing."
Having a strong balance sheet, she added, "has always been important to ride out the economic cycles."
Among other findings, the top three issues that will influence their companies in the coming year are competition (for 34 per cent), profitability ( for 29 per cent) and labour shortages (for 26 per cent), a change in order and some priorities from last year, when it was the economy, competition and profitabliity, in that order. In the coming year, 71 per cent of companies plan to use more non-financial rewards to motivate staff
Among priorities for improving competitive performance, 47 per cent pointed to improving processes;, 46 per cent said they wanted to reduce operating costs; 39 per cent wanted to improve staff skills; 37 per cent pointed to better customer targeting; 33 per cent cited staff retention; 30 per cent targeted expansion plans; and 22 per cent cited IT investment.
Companies are looking to technology to help them achieve their growth, with 43 per cent investing in mobile computing and 42 per cent in social media, according to the report.
Buddy, can you spare a thou?
In the wake of the financial crisis and the credit crunch, there is a growing movement in the United States by individuals to invest in local entrepreneurs and small businesses, says a report at BloombergBusinessWeek.
From investment clubs to crowdfunding sites, private-investor financing is on the rise, and is being made easier by a relaxation of rules by the U.S. Securities and Exchange Commission around individuals investing in small, private businesses, the report says. It points to clubs such as No Small Potatoes, part of Slow Money, which is focusd on helping local food businesses, as well as the many crowdfunding sites that have sprung up, which we reported on here.
Top female entrepreneurs
Profit magazine unveiled its ranking of Canada's top 100 female entrepreneurs. As it said in a release, they are a diverse group, spanning industries and size, with their businesses having grown by an average of 156 per cent over the last three years. The top pick, ranked by size, growth rate and profitability: Shannon Rogers, president and general counsel of Vancouver-based Global Relay Communications Inc. For the whole list, click here.
EVENTS AND KEY DATES
Financial planning week
Next week brings not only Small Business Week but also Financial Planning Week. Co-presented by the Financial Planning Standards Council and the Institut québécois de planification financière, the week of Oct. 17 to 23 will feature a variety of events centred on making financial planning a cornerstone of financial management -- not a bad idea for small and medium sized businesses. Personal financial strategies that small business owners might want to consider include how their business should figure into their retirement planning; succession planning; and taxation. For more on the week, click here.
Small business forum
The 11th annual Small Business Forum brought by the Toronto Board of Trade will take place in Toronto on Oct. 18. It's a learning and networking opportunity, bringing together new and existing entrepreneurs, investors, government program providers, marketing and legal experts, trade show exhibitors and others. For more details, click here.
EDITOR'S PICKS FROM REPORT ON SMALL BUSINESS
How to turn down time into productive time
Zone Marketing Group runs a seasonally busy business for half of the year, conducting and analyzing contest data for most of the big car companies at auto shows. This week's Challenge: The company needs to figure out how to make the other half just as busy
FROM THE ROSB ARCHIVES
Five myths about entrepreneurship
Last year at this time, columnist Mark Healey offered up five common myths about entrepreneurship. Click here for another look at those misconceptions.
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