With the renegotiation of the North American Free Trade Agreement, a major federal review of how corporations are taxed, and proposed minimum-wage hikes in several provinces, you can’t blame Canadian small businesses for feeling apprehensive about the future.
The state of small business in Canada
A look at how Canadian small-business owners are evolving – and thriving
This post was first shared on the Rogers Business Forum. To read the original blog, click here.
But entrepreneurs across the country have become adept at responding to changing policies and global market forces. “More and more entrepreneurs have become politically engaged in caring about the issues that are most important to them,” says Victoria Lennox, co-founder and CEO of Startup Canada.
Above and beyond the response to government policy, several other key trends define the current state of Canadian small business.
Over the past year, Startup Canada has seen more people over the age of 55 launching new businesses – you can call them “encore careers.” Although these Boomer entrepreneurs bring strong networks and a lifetime of experience to their endeavours, they often aren’t well-supported by programs and organizations that nurture startup culture, says Lennox. She’s calling for such initiatives to be more inclusive.
Millennials are known for their entrepreneurial mindset, but often have different priorities than their elders, says Dan Kelly, president of the Canadian Federation of Independent Business (CFIB). While Boomer entrepreneurs tend to focus on the craft and the market, Millennials tend to put their efforts into the finer points of building their business operations – particularly structure, branding and online presence. Both generations have something to learn from each other.
Doubling down on technology
Canadian small businesses are increasing relying on digital tools, not just to serve customers online, but also to offload tasks to on-demand services. “We’re seeing more businesses using cloud-based accounting systems, for example, to get things done with handheld devices,” says Troy Wright, a former Scotiabank executive, who founded financial-services company Lendified and the online forum SmallBusinessTalk.ca. “Ordering products from suppliers, including accessing capital, is moving to the digital space, where it can be done outside regular business hours,” says Wright.
Small businesses are also embracing self-serve options, especially in the restaurant and grocery sectors, in order to increase efficiencies and reduce labour costs, says Kelly.
While Toronto, Montreal, Edmonton and Vancouver remain dominant as locations for tech startups, these cities don’t have a monopoly on innovation.
“I think Winnipeg is one of Canada’s best-kept secrets,” says Lennox, “and Kamloops is becoming a hotspot for entrepreneurs who are choosing not to live in Vancouver – people who are looking for an enhanced quality of life while they grow a globally competitive company.”
Kelly says CFIB members in Atlantic Canada and Quebec are optimistic these days, with many new businesses setting up shop. Quebec, in particular, has been eliminating a lot of red tape for small business. In Ontario, Kelly suggests that high energy costs have been prompting manufacturers to look elsewhere.
Out west, Wright predicts that Canada’s strong overall economy will stabilize some of the recent weaknesses in oil-driven economies such as Alberta and Saskatchewan.
In terms of which types of small businesses are making their mark in Canada these days, Wright has seen growth among new businesses catering to consumers who are fussy about their food: home delivery, upscale ready-to-prepare products and services, and companies focused on specialized diets (e.g., vegan and gluten-free).
App-based services focused on wellness and quality of life are also part of a broader trend to leverage available smartphone technology, and Artificial Intelligence (AI) is also booming.
The embrace of digital technologies will continue to be a major factor for small businesses seeking to scale up and take advantage of global markets. “That’s particularly important in rural and remote communities where there may not be a large enough local market to be able to scale a meaningful company,” says Lennox. With so much of the policy landscape on the verge of dramatic change, Canadian entrepreneurs will need to think big and be bold to be ready for the future.
By Paul Gallant