The rising cost of doing business in Canada is above the global average, a new report by accounting, enterprise planning, and payroll software provider Sage found, but pivoting to new technology has boosted the confidence of many Canadian small to medium-sized businesses (SMBs).
For this second annual report, titled ‘Small Business, Big Opportunity’, the British multinational gathered data from nearly 12,000 business leaders globally, including 1,200 in Canada.
These Canadian SMBs say they have been impacted by rising costs, notably by the increase in salaries, and office expenses as well as marketing and advertising costs.
Canada trails behind its global counterparts in closing the talent gap, with only 27 per cent of Canadian SMBs saying they are doing well at hiring new talent – compared with 33 per cent globally and 43 per cent in the U.S..
Canadian SMBs are also less satisfied with their current staffing levels compared to global counterparts. In fact, provincially, only 17 per cent of SMBs in Ontario and 19 per cent in Quebec say they are very satisfied with their staffing levels.
With all these challenges, Canadian SMBs are looking to cut costs and operate more efficiently, and adoption of new technology has been the key for many. Nearly half of SMBs in Canada say they will increase their investment in technology over the next 12 months, with emerging technologies such as 5G (29 per cent), AI (24 per cent) and the metaverse (16 per cent) being the most likely to be adopted by them.
Investment in new technology, SMBs say, helps them save time on key processes, streamline their tech stack with more collaborative solutions, cut costs, and increase productivity.
But the report also shows that Canadian SMBs see value in having a good quality staff, with nearly 42 per cent saying they plan to hire more people in 2023.
Nonetheless, the report reads, “while these measures are important and good business discipline, SMBs are demanding governments to help support the creation and growth of small businesses.” Accordingly, 36 per cent of Canadian SMBs identified “tax relief” as a solution to cut costs.
“Collectively, business leaders and the government share a responsibility to support SMBs that have an ambition to invest back in their business, ” said Mark Hickman, managing director of Sage in Canada. “That includes finding solutions and incentives to enable them to secure the right people and the right technologies to drive productivity and achieve sustainable growth.”
But Hickman also notes that Canadian SMBs are bouncing back from the pandemic.
As a matter of fact, the report shows that over 70 per cent of Canadians are confident about the future, up from 63 per cent last year. Increase in revenue, along with hopes to adopt new technology and hire more people are contributing to this positive outlook. Fifty per cent of SMBs have seen an increase in revenue in 2023, with nearly a quarter experiencing more than 10 per cent growth.
“Globally, these business owners and managers see many of the problems of 2022, such as rising costs, cash flow issues, and reduced customer demand, as transitory, and feel bullish about what 2023 has to offer,” said Sage’s chief executive officer Steve Hare, adding that the pandemic changed SMBs for good.
Download the full report here.