TORONTO, Oct. 20, 2022 /CNW/ - Having gone through the worst of the pandemic, the majority of Canadian small businesses surveyed say they are now doing the same or better than they were two years ago, according to Scotiabank's third annual Path to Impact Report. They also say they feel better equipped to survive another wave of the pandemic or a recession, and two-thirds are optimistic about the future state of their business. However, despite the optimistic sentiment, many small businesses are worried about inflation, rising interest rates, supply chain issues, and a labour market shortage.

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Two-thirds of owners, especially those of larger businesses, foresee needing more financing. Additionally, nearly a third say their number one priority over the next three months will be finding places to cut costs. As a result, more small businesses are turning to someone for advice, and half of those who have sought out qualified advice from a financial advisor say their business is doing better.

"As we see reinvigorated consumer demand, businesses are reporting positive sales and revenue numbers, and less cash flow concerns. While it's encouraging to see more optimism, the road ahead will pose new challenges," says Jason Charlebois, Senior Vice President, Small Business, Scotiabank. "Small businesses are facing serious economic headwinds from inflation, rising interest rates, and labour market shortages. Small business owners should continue to be proactive in seeking qualified advice, leveraging all available financing options and tools."

The Scotiabank Path to Impact survey found:
  • 75% of Canadian small businesses surveyed say they're doing the same or better than they were two years ago. This is up from 54% in last year's survey.
  • 34% of small businesses say they are being impacted by inflation, with 37% of those businesses saying it is having a significant impact, and 4% having a critical impact
  • 24% of small businesses say they are impacted by rising interest rates, with 42% of those businesses saying it is having a significant impact, and 5% a critical impact
  • 25% of small businesses say they are currently being challenged by the labour market shortage and/or are having trouble sourcing materials
  • 83% say they are better equipped today to survive another wave of the pandemic 81% of small business owners said they are equipped to handle a possible recession
  • 65% foresee needing financial support in the future, and those with higher revenues above $500K foresee needing more than those with revenues under $500k
  • 90% of business owners have turned to someone for advice or support over the past two years, with 49% of those who turned to a financial advisor saying their business is doing better
  • 11% reduction in businesses reporting cash flow concerns over the past two years

With inflationary pressures, volatile interest rates and a labour market shortage likely to persist, Scotiabank has several tips for small business owners as we look ahead to 2023:

  1. Proactively explore financing options
    If you feel your business needs additional financing to withstand future economic headwinds, it's best practice to be proactive, and start those conversations with your small business advisor sooner than later. Whether it be increasing your line of credit, exploring additional loan programs, or finding support with identifying and applying for government-based assistance programs, your Small Business Advisor can help you plot a course of action to make sure your business is best placed for continued success.
  2. Don't let wasteful practices curtail your bottom line
    With increasing inflationary pressures, and a myriad of other contemporary economic challenges, it's never been more important to make sure your business is as streamlined as possible. With 29% of small businesses ranking cutting costs wherever possible as their number one immediate priority, talk to your small business advisor today about where you can find efficiencies in your organization's operations to make sure you are maximizing your revenue.
  3. Stay ahead of the curve on trends, and always have a contingency plan
    As a business owner, it's vital to plan ahead and anticipate any changes to the business environment, whether in your marketplace/sector, in your local community, or in your personal life. More than 80% of small businesses surveyed said they received some form of financial relief from the government during the pandemic. Some of those relief loans are set to come due next year so it's important to work on a repayment strategy now.  With the possibility of a recession, continued interest rate volatility, increase in freight costs, and continued supply chain disruptions likely to remain, a contingency plan is one of the best lines of defence. 
  4. Keep digital top of mind
    The global economy and advances in technology have created a huge world market, with an array of opportunities for commerce, sourcing labour talent and marketing your business to new customers. What's more, not all businesses need a storefront. A strong digital presence can mean a lot of the overall operations can be conducted from your own home, and remote and hybrid work options have demonstrated they are here to stay. Scotiabank can also help you navigate the evolving world of digital capabilities now available.  
  5. Spot new opportunities
    Evolving and learning from past successes and failures is a great way to grow as well as provide a renewed spark and excitement in your business. Revisit your existing products and services and explore if there is a place to add something new. Paying attention to trends in your industry and staying on top of current news can be great sources of inspiration. Be open to uncovering new opportunities and seek out the advice of a Small Business Advisor, who can help you plan your next big idea.

Visit the Scotiabank Advice+ Centre for Business for more details:
https://www.scotiabank.com/ca/en/small-business/advice-centre.html    

Click here to read the full Path to Impact Report.

Methodology:

Scotiabank's annual Path to Impact Report was conducted on behalf of Scotiabank by Maru Public Opinion and its sample and data collection experts at Maru/Blue. A total of 806 financial decision makers at Canadian businesses with annual revenue between $50,000 and $5 million responded to the survey between August 26 and September 1, 2022. The survey was conducted in both English and French.

About Scotiabank:

Scotiabank is a leading bank in the Americas. Guided by our purpose: "for every future", we help our customers, their families and their communities achieve success through a broad range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. With a team of over 90,000 employees and assets of approximately $1.3 trillion (as of July 31, 2022), Scotiabank trades on the Toronto Stock Exchange (TSX: BNS) and New York Stock Exchange (NYSE: BNS). For more information, please visit http://www.scotiabank.com and follow us on Twitter @Scotiabank.

SOURCE Scotiabank

Copyright 2022 Canada NewsWire

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