TORONTO, Oct. 7, 2020 /CNW/ - Canadian small business owners impacted by the COVID-19 pandemic remain cautiously optimistic about their future, according to Scotiabank's recent New Path to Impact Report. Two-thirds of businesses report being in a worse situation now, compared to before the COVID-19 pandemic. Despite the strong headwinds businesses are facing during the pandemic, the report revealed 40% of small business owners are 'very' or 'extremely' optimistic about the future of their business.
While the future effects of COVID-19 are uncertain, the report uncovered that most businesses are feeling more prepared, with 69% stating their business is better equipped to survive a second wave of the pandemic.
"The resiliency of Canadian business owners throughout the pandemic has been commendable. Whether they've pivoted to rely more on digital channels, taken advantage of relief programs or adjusted their business model to serve today's market, they've had to get creative to find ways to survive," says Jason Charlebois, Senior Vice President, Small Business, Scotiabank. "While we cannot predict how the next six months will unfold, now is the time to start focusing on the future, with cautious optimism. Charting a new path forward has to start with a plan, so seek advice early, use the resources available, and be ready to pivot – it's the greatest chance of survival in a post-pandemic world."
The Scotiabank New Path to Impact Report also found:
- The number one priority for small business owners is to increase sales through additional channels over the next three months.
- 3 in 10 small businesses anticipate continued financial difficulties in the short term including reduced revenue, less work, reduced consumer spending, and slow overall growth.
- 63% of small business owners say they do not foresee the need for additional financing to continue their operation, with smaller firms being less likely to require more financing.
- Majority of small businesses (60%) experienced decreased sales and revenue since the pandemic first began, with two-thirds having taken advantage of relief programs to help sustain their business.
- Most industries state they're better equipped to survive a second wave of the pandemic – however, this sentiment is lower in the Construction industry, where 55% of business owners are prepared versus 69% on average (all industries).
"Support for small businesses during COVID-19 has been integral to keeping the economy and the country strong, and Scotiabank applauds the federal government for extending a hand up to small businesses across Canada with essential programs," said Dan Rees, Group Head of Canadian Banking, Scotiabank. "The Canada Emergency Business Account (CEBA), especially, has given many business owners that peace of mind to be able to keep their operations going or prepare for what's to come, and we strongly encourage the government to continue investing in businesses of all sizes as they face more challenges ahead."
Path to Recovery: Top Tips for Small Businesses
- Stay Resilient: Focus on ways to sustain your business and stimulate sales. While economic recovery and consumer spending are trending in the right direction now, we are still far from a full recovery. That means staying the course and remaining resilient. Continue to manage expenses, explore new revenue streams, and use digital channels to reach new and existing customers. Be prepared to scale up when the time is right.
- Use Available Resources: If you anticipate continued financial difficulties in the short term, such as reduced revenue and consumer spending, and/or slow overall growth, explore the support programs available to see if you qualify. These include government programs such as the Canada Emergency Wage Subsidy, the new Black Entrepreneurship Program, Bank programs like The Scotiabank Women Initiative, or connecting with business associations like the Canadian Federation of Independent Business. There are options for every size and stage of business growth.
- Build Up Your A-Team: Having a strong relationship with your financial advisor is important for any small business, but especially when navigating the ongoing impact of the pandemic. A good advisor can look at your entire portfolio to see where you might be able to free up capital or better manage cash flow. Set up quarterly meetings and empower them to focus on your finances, so you can focus on running your business. Explore a wide range of advice options by visiting the new ScotiaAdvice+Centre.
- Double Down on Digital: The top priority for most small business owners in the coming months will be to increase sales through additional channels. Allowing customers to access products and/or services online can help small businesses attract a broad audience while providing a more convenient shopping experience.
- Be Ready to Pivot: With the change this year has brought, it's important to review your business model. Ask yourself: Does it still work in this environment? Where can I pivot to alternate channels like online or curbside pickup? Finding alternative opportunities can save a business. That extends beyond just reviewing the business model to include items like evaluating cash flow, balancing operating costs against sales or revenue declines, and stocking up on PPE essentials early.
Scotiabank is committed to supporting businesses of all sizes. Through a team of dedicated advisors, Scotiabank provides personal and business banking solutions, personalized advice, and dedicated programs that cater to a business owner's unique needs and future goals. Visit the Scotiabank Advice+ Centre for Business for more details: https://www.scotiabank.com/ca/en/small-business/advice-centre.html
As part of the Bank's commitment to empowering women in business, The Scotiabank Women Initiative™ is helping to advance women-owned and women-led businesses across Canada through three key pillars: Access to Capital, Mentorship, and Education and in 2019, committed to deploy three billion dollars in capital to women-led businesses in its first three years. For more information on The Scotiabank Women Initiative, visit scotiabankwomeninitiative.com.
Read the full Scotiabank New Path to Impact Report online here.
Research conducted by Maru/Blue on behalf of Scotiabank from August 28-September 3, 2020. A total of 500 completed surveys were collected from a random sample of small business owners across Canada.
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 $1.2 trillion (as at July 31, 2020), Scotiabank trades on the Toronto Stock Exchange (TSX: BNS) and New York Stock Exchange (NYSE: BNS). For more information, please visit our website and follow us on Twitter @ScotiabankViews.