Yahoo Finance Most small businesses optimistic about future despite economic uncertainty: survey
Still, the top priority for most businesses is to cut costs wherever possible
Despite economic uncertainty and concerns about high inflation and interest rates, small business owners in Canada are feeling optimistic about the future, a new report has found.
According to a Scotiabank survey of nearly 1,700 Canadian small businesses with revenue between $50,000 and $5 million, two thirds (66 per cent) say they are very or extremely optimistic about the future of their business. The positive sentiment is even higher in Atlantic provinces (83 per cent) and in Saskatchewan and Manitoba (82 per cent).
“It is a bit surprising to see that optimism,” Jascha Jabes, Scotiabank’s vice-president of small business banking, said in an interview with Yahoo Finance Canada. The survey also found that most business owners (76 per cent) say their business is doing better or the same as two years ago, when the COVID-19 pandemic had yet to subside.
“There may be a survivorship bias, because these are small businesses that made it through the pandemic. Not everyone did, and I think those that did are showing incredible resilience.”
However, Jabes also notes that the positive sentiment may be more of a “cautious optimism” as many small business owners remain concerned about various challenges in the economy, including inflationary pressures and rising interest rates.
More than half of those polled (55 per cent) say they are still facing increased material costs due to inflation, more than last year, when just under half (48 per cent) reported feeling pressure from increased input costs. About one-quarter (24 per cent) say they are still facing supply shortages, while 23 per cent say keeping up with demand is a challenge and another 23 per cent say hiring remains difficult.
As they brace for more economic uncertainty, the top priority for most businesses is to cut costs wherever possible. Cutting costs was the top priority among the smallest businesses (with annual revenue between $50,000 and $500,000) as well as larger ones (with annual revenue between $1 million and $5 million). The top priority for businesses with annual revenue between $500,000 and $1 million is increasing sales through additional channels.
“Canadian businesses’ financial priorities involve managing costs and identifying efficiencies, but they are also being resourceful in terms of finding new markets, accessing customers and making it easier for customers to deal with them,” Jabes said, adding that speaking to advisors can help businesses manage through economic uncertainty.
“Ensuring that small businesses are positioned for uncertainty of future challenges… I think that’s going to be very important.”
The survey of 1,691 small business owners with annual revenue between $50,000 and $1 million was. conducted by Maru Public Opinion between June 26 and Aug. 11.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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