Ottawa-Gatineau #9 in Small Business Growth

Ottawa-Gatineau is #9 in small business growth among Canadian CMA’s (Census Metropolitan Areas):

cmagrowth

Some Interesting Statistics

  • Small businesses employed roughly five million people in 2008, comprising nearly half of the private-sector labour force.
  • Between 1998 and 2008, small businesses created more than one-third of all new private sector jobs. In 2008, they created roughly 70,000 jobs, almost 70% of the Canadian total.
  • About 25% of small businesses operate in the goods-producing sector and the remaining 75% are in service industries.
  • 64% of businesses in Canada have 6 or less employees:

bizdistribution

  • Small businesses are highly represented in the following industries:
    • Construction
    • Non-institutional health care
    • Professional services
    • Retail
    • Accommodation & food services
    • Truck transportation
    • Forestry

ref:  Canada’s Small Business Juggernaut, BMO, October 2009

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Canadian Business Barometer October 2009

CFIB’s Business Barometer® Index dropped to 67.0 in October, from 68.7 a month earlier.   Measured on a scale between 0 and 100,  an index level above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance.  According to past results, index levels normally range between 65 and 75 when the economy is growing.

The full October 2009 report is available for download.

ref: Business Barometer: National small business optimism dips slightly in October

Canadian Small Businesses Outlook Improving

Survey results from the Canadian Federation of Independent Business showed some improving outlooks among small business owners polled:

  • 38% considered the condition of their business to be “good”, 18% “bad”, and 44% “satisfactory
  • 18% of businesses were planning to add staff
  • 16% of businesses were planning to reduce staff
  • Top five business cost concerns: tax, regulatory costs; fuel, energy costs, wage costs; bank account and processing fees; and insurance costs.
  • Top three business constraints: insufficient domestic demand; shortage of working capital; and shortage of skilled labor
  • Business Barometer index rose to 60.4% (well below historical norms, but up since last survey)

Small Business Has a BIG Impact on the Canadian Economy

Many people are not aware of the big impact that small business has on the Canadian economy.   Unfortunately, the focus of the news and government is usually on the few large companies – automotive and financial of late.

The Government of Canada publishes a ton of data on small businesses.   Some key metrics from 2007 about small business in Canada include:

  • There are over 1 million small businesses in Canada
  • Small businesses that have fewer than 50 employees –  contribute 26 percent to Canada’s GDP
  • Small businesses employed approximately 5 million individuals – 48 percent of the total labor force in the private sector
  • Small businesses created 100,000 jobs  – accounting for over 40 percent of all jobs created in Canada

Good sources for information on small businesses in Canada, their characteristics and impact on Canada’s economy include the following:

Off-shoring for Small Business – Here to Stay or Passing Fad?

The world is increasingly flat these days.

Off-shoring of jobs and business functions continues to expand in scope and variety.   Today, off-shoring is very common for call centers and programmers for large companies.   However,  off-shoring has now extended to jobs such as  receptionists and administrative assistants and is being aimed at small to medium businesses as well.  Some off-shore service companies are offering staff for as low as $3.36 an hour!

Examples of off-shored services being offered include:

Administrative & Business Services Writing and Editing Services Internet/Web Services Customer Support Services
Word Processing
Data Entry
Forms Processing
Executive Support
Business Plan
Market Research
Planning & Scheduling
Events Management
General Office Operation
Copy Editing
Brochures
Web Content
Copy Editing
Advertising Copy
Proofreading & Editing
Creative & Technical Writing
Newsletter editing
Advertising Copy
Internet Research
Web Site Hosting
Web Site Design
Web Site Consulting
Graphic Illustrations
Affiliate Marketing
Site Submission
Website Advertising and Marketing
Order Processing
Invoicing
Customer Surveys
24 Hour Live Operator Answering
Customer Email Processing
Live Online Customer Support
Faxing
Follow Up Calls
Tech Support
Customer/Contact Management
Desktop Publishing Personal Services Human Resources Sales & Transcription Services
Logos
Graphics
Business Cards
Letterhead
Multimedia Creation
PowerPoint Presentation
Designing Cards, Invitations, Calendars
Resume Writing
Salary Histories
Reference Letters
Paper Writing
College Admission Letters
Complaint Letters
Personal & Family Website
Travel Planning
Reservations
Gifting & Invitations
Applicant Screening
Recruiting
Background Checks
Payroll & Benefits Management
Job Announcements
Interviewing
Training/Employee Manuals
Payroll & Accounts Payable Processing
General Transcription
Digital and audio
Inbound and Outbound Telemarketing
Lead Generation
Internet Sales
Website Marketing

Large companies have been doing off-shoring for years.  However, managing off-shore services is an unknown for many small businesses today.

Successful off-shoring requires solid internal business processes and a well-defined outsourced job task.  Successful execution requires effort on the part of the small business to provide direction and oversight — and associated comfort, skills and understanding of how to manage remote staff (that you will never see and who live in a different culture!).  Related concerns include non-US/Canada access to business information, internal systems security, outwards facing business image and the churn-rate (and associated retraining required) of the off-shore staff.

Some examples of small-business oriented off-shore services include:  Tasks EverydaySupport Resort, Velan, and SupportSave.

A start-up company called oDesk is interesting because it provides tools and methods to research, vet and manage service providers which may be off-shore.  oDesk service providers span a wide range of services, from development to writing.

These are early days for off-shoring for small businesses.   It’s not clear yet if this likely to be a long-term trend.  It is also not clear yet how effectively a small business can leverage off-shore services or what business processes and job tasks can practically be off-shored.

oDesk may also be the first of many start-ups to focus on ways to make off-shore labor and virtual teams part of the normal fabric of small businesses.   oDesk changes the cost to find, and manage off-shore talent – moving it from big company to small company domain.   Process engineering with supporting tools that change the delivery model economics and allow small business customers (or individuals) to take advantage of previously “high end” or “high cost” services may represent a large opportunity for entrepreneurs.  oDesk and RiseSmart may be the vanguard of a new wave of start-ups that rise out of the recession.

Have you used any off-shored services for your small business?  If you have – what service provider are you using and how is it working out for you?

What Industries or Businesses Do Well During Recession?

There is a scene in Monty Python’s “The Meaning of Life” where several guys are tied to crucifixes, and suddenly Eric Idle launches into the song, “Always look on the bright side of life.”   This is  my favorite part of the song:

If life seems jolly rotten
There’s something you’ve forgotten
And that’s to laugh and smile and dance and sing.
When you’re feeling in the dumps
Don’t be silly chumps
Just purse your lips and whistle – that’s the thing.

And…always look on the bright side of life…
Always look on the light side of life…

For those looking to see the bright side of the recession and create their own job, the question that comes up in the current environment is “What products and services are people going to continue to buy during a recession?”

The following is a list of industries and businesses that are generally expected to see continued (if not increased) sales during a recession:

  • Funeral homes
  • Accountants (tax preparation, bankruptcy)
  • Health care (clinics, doctors)
  • Dry cleaning
  • Car insurance
  • Loan modification, loss mitigation and credit counseling
  • Rental real estate vs purchase real estate
  • Liquidators
  • Pawn shops
  • Flea markets, traders, classifieds
  • Discount retailers
  • Do It Yourself (DIY) industry for hardware, supplies and instruction for keeping up maintenance rather than replacing
  • Debt collection agencies
  • Education and training, as layoffs create need to prepare for alternative employment
  • Temporary staffing and contract employment services
  • Outplacement services
  • Rental and leasing firms, as companies have less cash for purchasing equipment
  • Resellers of just about anything used or refurbished
  • Equipment repair
  • Home maintenance
  • Auto repair and maintenance , as people will tend to put off purchasing a new car
  • Automotive parts suppliers
  • Lottery, alcohol and tobacco
  • Grocery stores, as people will tend to eat out less

From a statistical perspective, Sageworks, a company that specializes in financial analysis of private companies has published data for 2008 which listed the sales growth for the top 30 privately held businesses, which provides another perspective on what companies may do well in a recession:

Top Performing Industries by Sales Growth

They also published data on a subset of retail industries to highlight sales trends:
Sales Declines in 5 Small Retail Industries - 2008
Sales Declines in 5 Small Retail Industries – 2008

And they also published data on the top 10 most profitable industries as measured by net profit margin:

Top 10 Most Profitable Small Businesses - 2008
Top 10 Most Profitable Small Businesses - 2008

“Following the money” is more important now then ever before.   To that point, a Silicon Valley start-up  called RiseSmart recently raised $3 million in first-round funding in a bid to outwit the traditional outplacement industry.  RiseSmart is focused on providing what have traditionally been “high end” outplacement services (for job seekers looking for $100K+ jobs) to a wider market by using technology to streamline the service delivery costs and market price.

If you are looking to create your own opportunities in the challenging economic environment, you might want to take a look at the work on Business Ecosystems.

If you have an established business and are wondering what actions you can take to survive and prosper, please take a look at this blog entry.