The CFIB (Canadian Federation of Independent Business) published their report in March 2021 outlining the effects of pandemic restrictions and measures on Canadian businesses over the past year. They have outlined seven (7) takeaways on how the world has changed for small businesses in Canada based on real-time data.
The economic impact was based on three core metrics:
- Fully open (62%)
- Fully staffed (44%)
- Normal sales (31%)
Since mid-March 2020, 28% of small businesses surveyed saw their sales drop by half or more with 22% permanently dismissing employees that had job security prior. Additionally, only 11% of those surveyed felt their provincial government has handled the lockdowns and business restrictions well.
After reviewing the data collected, the CFIB has a few takeaways:
- The Rules Have Changed for Small Business.
- Small business owners have to rethink how they do business
- Small Businesses are Pivoting.
- Business models are changing – what/how they sell differs, as
- 152,000 small businesses adopted eCommerce within the past year and/or have employees working more remotely than before.
- Sales and Profits Falling; Debt Soaring.
- Nationally, 73% of small businesses took on debt due to the pandemic (an average of $170,000 per business).
- The largest sector affected was hospitality (91% took on debt) while Agriculture & Natural Resources had the highest average debt ($329,000).
- 4 in 10 businesses say it will be at least another year before they expect to see normal profits while 1 in 6 Canadian businesses are at risk of permanent closure.
- Government Support Remains Critical
- 71% of those surveyed believe the Government programs (like CEWS, CERS, CEBA, etc) are crucial for their business’ survival. This differs significantly from 2018 when only 25% sought grants to help their business grow.
- Entrepreneurs are Stressed Out and Tired
- 2020’s dominant words were stressful, uncertain, and challenging. Business owners remain hopeful for 2021 amidst the stress,
- 45% of business owners had to work significantly longer hours with 48% mentioning overwhelming stress as their top concern,
- 49% were impacted by psychological health issues and the same percentage said physical health impacts on their staff (and themselves) was a top worry
- A Much Shorter Business Outlook
- 3-month and 12-month outlooks have been reduced to more of a 3-month focus on keeping the doors open
- Retirement Plans are Being Redrawn
- 7 in 10 business owners have changed their thinking about their retirement/exit-plan. 42% say they will retire later while 5% plan on retiring sooner than planned.
- The majority (57%) feel the value of their business has declined
Take a look at the Resources the CFIB offers small businesses, specific to your province.
With 44% of small businesses fully staffed as of 2021-03-09, we can only trust that hiring will be in the plans as the restrictions ease. Check out: https://smarthire.ca/hiring-pain-point-for-employers/
CFIB and SmartHire, there to set you up for success!