A global study conducted by Sage, called Small Business, Big Opportunity?, found a surprising sense of optimism among thousands of businesses from around the world.Kennett Mohrman/Supplied
As the nation emerges from the challenges and uncertainty of the pandemic and the associated restrictions, Canada’s small businesses are a critical engine to empower a post-pandemic economy. A first-of-its-kind global study by Sage, called Small Business, Big Opportunity?, sheds light on the current state of mind of small business owners and the obstacles they face.
“Small businesses are the backbone of our nation’s economy,” says Steve Ryujin, vice-president, small business segment, at Sage. “This study gives a voice to their stories and experiences over the past year. It offers important insight into how we can help small businesses knock down barriers and support them so they can thrive.” According to Statistics Canada, businesses with 100 employees or less represent slightly more than 98 per cent of all employer businesses in Canada and employ 10.3 million people, or two-thirds of the total workforce. More than 1,000 of those businesses joined the voices of 12,000 others around the world as part of the Sage study – the largest of its kind.
What emerged is a surprising sense of optimism shared by thousands of small businesses in 11 regions that were surveyed: Canada, the United Kingdom, United States, France, Spain, Germany, Australia, South Africa, Portugal, Malaysia and Singapore.
“What we learned from this research is that two-thirds of Canadian small businesses surveyed continue to have strong confidence in the future,” Ryujin says. “We call these Adaptors. They represent about 27 per cent of small businesses we spoke with [globally], and they appear to have emerged out of the pandemic even stronger.”
The study also revealed another interesting segment of entrepreneurs dubbed Generation COVID, representing about 14 per cent of the respondents. Launched during the pandemic, these businesses continue to face significant barriers but report feeling more confident about overcoming them.
“It was exciting to learn these two groups of small businesses utilized technology to make fundamental shifts in how they conducted their business during COVID-19, leading to increased productivity and efficiency. The study tells us that this has played an important role in their ability to survive and thrive,” Ryujin says.
Another silver lining of COVID-19, aside from being a catalyst for digital adoption, is an emerging interest among a new generation of entrepreneurs who want to embed sustainable development in their business models and promote it in their communities.
On the flip side of that optimism and desire for innovation and growth is a pervasive concern about potential business interruptions due to COVID-19, cost increases due to inflation, rises in wages and rents, as well as disruptions to the supply chain. Globally, 18 per cent of those surveyed said they were hard-hit by the pandemic and are cautious about their business’s future. This group of entrepreneurs, categorized as Resilient, indicated that rather than trying to grow, they are still focused on overcoming the challenges they have faced in the last year.
A fourth segment, the Left Behind, represents just nine per cent of the study’s participants. “Sadly, they’re the ones that are struggling to keep their heads above water and may have to close in 2022,” Ryujin says. Participants shared that increased costs, lost customers, and cash flow and liquidity problems have plagued them to the point of no return.
Tammy Hoy infographic
Small businesses say they need support from government
As Canadian small businesses look ahead, adequate funding and support clearly weighs heavily on them with 44 per cent saying they need federal government support to survive and 39 per cent indicating a need for help at the provincial government level.
This call for help isn’t unique to Canada. According to the study, small businesses globally said government support was the most important single resource that could contribute to their growth in the next 12 months.
While 60 per cent of Canadian small businesses benefitted from government grants designed to alleviate pressures brought on by the pandemic, Ryujin says the Sage study is a call to action for federal and provincial governments to rethink how they support the sector going forward. The many barriers created by the pandemic have disproportionately impacted small businesses locally and globally.
“Small businesses realize that cash flow, access to financing and continued support from government are all critical as they plan their recovery,” Ryujin says.
Sage has been a longstanding champion for the nation’s vast network of small businesses and entrepreneurs. In 1981, Sage founder David Goldman wanted to create quotes quickly for his printing business and keep track of his accounts. He turned to technology for the answer and today more than 11,000 Sage colleagues support millions of businesses across more than 20 countries worldwide with accounting, financial, HR and payroll technology solutions.
“Technology continues to be an important factor for business success and there are definitely pockets of small businesses that are adopting more technology to improve their efficiencies,” Ryujin says. “Our goal is to help small businesses spend their money where they will see the biggest lifts and that means getting a clear understanding of their costs. We know that digital tools and strategies can improve their reporting methods, help them develop a firm grasp of what is going on in their company, and increase productivity with a remote workforce that is here to stay.”
“While the road of an entrepreneur can be a lonely one, it’s vital that we rally behind them so they can lead the way out of the pandemic,” Ryujin says. “Sage really does want to be the trusted network for SMBs, so they don’t feel like they’re out there by themselves.”
For more information about Sage and its Small Business, Big Opportunity? global study, visit www.sage.com/en-gb/small-biz-big-opp/.
Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.