Executive Pulse seeks input from Canadian leaders on vital issues that affect our economy and business climate.
Canada is a country of small to medium-sized businesses: 98.2 per cent of companies have fewer than 100 employees, and they contribute more than half of Canada's gross domestic product, according to the Business Development Bank of Canada.
Charles MacQuarrie, who holds an MBA from the University of Western Ontario's Ivey Business School, is the president of the MacQuarries Pharmasave drug-store chain, based in Truro, N.S. Mr. MacQuarrie, who is also a director at the Dalhousie Medical Research Foundation, weighs in on the advantages and disadvantages of starting and running a small business in Canada.
In your experience, what qualities are vital to building a successful small or medium-sized business in this country?
It is a combination of a leader doing something they really enjoy, that makes a difference in an existing market or creates a new market, plus a very talented team of employees; if you start with those two things the rest of the pieces should fall into place.
Is Canada a fertile environment for starting up a new SMB these days?
If you've got the desire to do it and you either create or find an opportunity in the market, I would suggest that any time is a good time to start a business. The interest rates are low right now, so from that perspective, it's a particularly good time.
What are the biggest hurdles for growth?
Sometimes the first hurdle is getting into a business you think you will like and then realizing that you don't possess any of the other skills necessary to make it work. In certain markets in Canada, population may be a factor and we may be limited by the availability of talented employees. Having governments provide a business friendly environment (necessary infrastructure, lower taxes, appropriate regulations, etc.) reduces the hurdles.
Given the size and diversity of this country, what advantages may local, regionalized SMBs have over the large, nationwide companies?
For retail, being closer to and knowing your customers is best, but it really depends on the nature of your business. If you're a Web-based business, you can be anywhere in the world because geography is less of a factor. In the tangible world of retail and bricks-and-mortar, Canada has lots of land with few people. As companies like Target found out, it's not the same as a smaller geography with 10 times the population.
Does the size of the market in Canada and the level of competition here make it easier or harder to thrive than in countries such as the United States?
In some respects, if you're good at what you do and you have 10 times the population at your doorstep, that makes it significantly easier to make a difference and get the volumes and economies of scale and so forth. But on the other hand, you've got 10 times the population, which can be 10 times the competition; so maybe those things even out.
How important are SMBs to Canada's overall economic health?
Huge. Generally speaking, every large business started as a smaller business. The small to medium-sized businesses create the majority of the employment in Canada. Many of those enterprises are family run and I feel they're more committed to their home communities. Maybe that's the difference – the small or medium-sized enterprises are simply closer and more invested in the communities in which they do business.
Do you feel that Canada takes full advantage of small-business opportunities?
It depends on where in the country you are. There are certain pockets of entrepreneurship and other areas that are not so entrepreneurial. It seems a lot of the time that when it comes to government involvement with business, they focus on the large companies first. But the larger number of small-medium sized enterprises have a more significant impact overall. In some ways maybe all of those small to medium-sized companies are paying the taxes that are contributing to subsidy assistance for the larger enterprises.
Responses have been edited.