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A Glance at Canadian Small Business

There's no shortage of news about big companies facing major upheavals as they deal with the fallout of the global financial crisis, but small businesses make up an enormous portion of the Canadian economy and they're also coming to grips with their own set of challenges.

Industry Canada defines a small business as a company with fewer than 100 employees, and Statistics Canada says there were just over 1 million companies across the country fitting that description in July 2008 (and that tally does not include self-employed entrepreneurs).

Put another way, 98 per cent of firms in Canada fall into the small business category, and about 139,000 new ones are created each year.

About a quarter of those businesses produce goods, with the remainder providing services. They employ more than five million people (about 48 per cent of the private-sector labour force), spend a higher percentage of their revenue on research and development than large companies do, and generate roughly a quarter of Canada's gross domestic product.

Small businesses don't have it easy. According to StatsCan figures, three out of every 10 new small businesses fails in the first year, half make it to three years, and only 25 per cent are still in business after nine years. And that was before the financial crisis hammered the economy and tightened access to the credit and loans that grease the operations of many small businesses, whether they're buying new equipment, meeting payrolls or buying raw materials and inventory.

In a poll of more than 400 small business owners across the country conducted between Sept. 29 and Oct. 6 by Ipsos Reid for American Express Canada, 41 per cent of respondents said they are already feeling a negative impact from the current economic environment. Another 25 per cent said they expect the problems in the global economy will hurt their business in the coming months.

In the same poll, one in six respondents was worried about the short term viability of their business, and one quarter of those polled acknowledged that their company will have serious problems in the near future if sources of credit dry up.

Small Business Week runs from Oct. 20 to 24, saluting Canadian entrepreneurs even as they face increasingly daunting economic times. CBC News has assembled an array of features about some of the issues facing small firms in Canada, as well as resources for entrepreneurs launching and nurturing small business ventures. Check this page throughout the week for new additions.

To see the complete special report at CBC-Small Business Week.





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