Canada is basically a nation of small businesses. Did you know 98.2 per cent of businesses in Canada have fewer than 100 employees? In fact, small and medium-sized enterprises (SMEs) represent 99.9 per cent of all companies and employ more than 60 per cent of private sector workers.
“We say this all the time,” says Michel Bergeron, BDC Senior Vice President, Marketing and Public Affairs, “but small businesses really are the engines of growth for the Canadian economy.”
Fresh from touring the country during BDC Small Business Week™ which celebrates Canadian entrepreneurs and SMEs, Bergeron notes, “As a nation, we still need to reinforce the notion of how critical small businesses are to the Canadian economy. Small Business Week is a celebration of their work, and a time to rally around them and increase awareness of their importance.”
BDC’s 5 Do’s and Don’ts of a Successful Business
It was also an opportunity to raise awareness of a recent BDC study, The 5 Do’s and Don’ts of Successful Businesses. BDC , Canada’s business development bank, provides financing, venture capital and consulting services to smaller businesses and entrepreneurs, in order to grow their businesses domestically.
So what is the number one factor for success for business today? Spoiler alert … Innovation.
“Small businesses today need to be lean and they need to adopt technology. They have to espouse the digital revolution, but this means investing in R&D and often it requires a huge cultural shift because a lot of businesses just aren’t familiar with that channel. This doesn’t happen overnight, but you’d be surprised at how many Canadian businesses have not incorporated ICT adoption into their business model,’ says Bergeron.
In fact, according to the Canadian Internet Registration Authority, only 41 per cent of Canada’s small businesses have a website.
But today, the internet impacts everything; not the least of which is how people buy and consume products.
“Just look at how people used to buy a car, by touring various car lots for days, says Bergeron. ‘But today, something like 57 per cent of all purchasing decisions in North America, are done online. So businesses need to shift their strategies, they need an online component to get more orders. And this actually brings the cost of acquisition down.”
“It’s the high value added services that make the difference today, and there’s lots of room for small, nimble, agile firms. We look for ambitious entrepreneurs, with scalable businesses, that are ready to seize the global stage. Successful entrepreneurs are focused on taking their company to the next level, even when they know there will be challenges along the way. “
Diversification is key
What’s the number one “don’t” for successful business today? A lack of diversification; relying too heavily on one or few customers.
“If the recent financial crisis taught us one lesson, it’s that no customer is too big to fail, says Bergeron. “While it may seem challenging in some sectors to develop a broad customer base, it’s something that all firms should incorporate into their business strategy.”
With the recession largely behind us, now is the time to take advantage of world growth, he adds. But where is the growth going to come from?
“From outside Canada,” says Bergeron. “Growth will happen from trade … pure and simple. And that’s particularly true for smaller niche businesses,” he adds.
Mike Neals, Vice President of Export Development Canada’s (EDC) SME Strategy, agrees. “There’s two ways to look at diversification,” he adds. “With the rebound in the US, we’re seeing new small companies begin their export journey south of the border, and that’s great. But EDC is also focused on helping these same companies expand their exports beyond the US, into high-growth emerging markets, helping them understand the risks and opportunities.”
These markets, also identified by the Government of Canada’s Global Markets Action Plan (GMAP) to help guide Canada’s economic growth moving forward, include India, China, Latin America and Southeast Asia.
For more information see: The 5 Do’s and Don’ts of Successful Businesses
See also: Diversifying into Foreign Markets