SOURCE: Sage North America

Sage North  America

February 23, 2011 08:29 ET

Sage Survey Reveals Small Businesses Are Cautiously Optimistic About Canada's Economic Recovery

Businesses Cite Reduced Red Tape and Business Taxes as Aids to Growth

RICHMOND, BC--(Marketwire - February 23, 2011) - The Sage Group, a leading provider of business management software and services to 6.3 million small and midsized businesses worldwide including 500,000 in Canada, announced today the results of an international business survey that indicates that, while about half of Canadian small businesses feel the Canadian economy is recovering, only about one-third have increased confidence for their own business prospects. Half of the 574 Canadian respondents said their biggest issue in 2010 was rising costs which they anticipate will be a challenge again in 2011.

The survey, conducted as part of a multi-country research program by Sage seeking the views and recommendations of small businesses in Canada, the United States, France, Germany and the United Kingdom, found that Canadian businesses believe the best aspect of doing business in Canada is its business culture and entrepreneurial spirit, while issues related to government, such as red tape, were among the least attractive aspects. Access to capital and funding was one of the least favorable aspects of doing business in the Canada, cited by 21 percent of Canadian respondents, similar to US respondents at 23 percent, whereas in several other countries this was a greater concern cited by 40 percent in the UK and Germany and 37 percent in France.

As in other countries, Canadian small businesses feel the government could be doing more to help them directly by reducing bureaucracy and business taxes, and by providing more assistance for start-ups. In the meantime, they expect to tighten their belts in 2011 to gain more efficiency.

Almost half the Canadian companies surveyed (43 percent) have been in business for more than 20 years and 56 percent support fewer than five full-time employees.

"At Sage we have about 36,000 contacts with small businesses every day, which helps us stay connected to the pulse of the economy and translate that into better products and services," said Richmond B.C.-based Sage Vice President Jamie Sutherland. "Canadian small businesses are apprehensive about the health of the Canadian economy and are cautiously optimistic about growth in 2011, so it's no surprise that they have an eye on containing expenses and will be actively monitoring their finances to prepare for unexpected issues. This is where financial literacy and good use of software tools can make or break a business."

While 47 percent of Canadian companies who participated in the study believe the government could provide more support and advice to those starting a business, that concern is greater in several other countries (US 53 percent; Germany 54 percent; France 70 percent) but significantly less in the UK (20 percent). Canadian businesses are taking it upon themselves to strengthen and grow:

  • 53 percent of Canadian respondents plan to increase internet and online software services with the majority of those focusing on improvements in marketing, sales, and payments processing. 
  • Among the 39 percent of small businesses surveyed that do not plan on increasing their use of online software, security and online fraud was listed among the top reasons for not doing so.
  • 30 percent expect to incorporate mobile technology into their business.
  • 48 percent are looking to reduce expenditures and 42 percent will be monitoring finances more closely, while 25 percent plan to invest in sales and marketing.
  • 19 percent of Canadian respondents plan on hiring in 2011 with 14 percent planning for reductions. This compares to US respondents, where 13 percent plan to hire and 17 percent anticipate reductions.

Canadian small businesses' entrepreneurial spirit extends to their choice of advisors: 63 percent turn to their accountant, 40 percent to business associations, and 36 percent to colleagues. Banks and government sources were among the least relied upon at 26 percent and 16 percent respectively, even falling below the modern self-help source, an internet search which was preferred by 30 percent.

"Canadian small businesses are telling us they have the appetite and drive to succeed but they are being held back by bureaucracy and legislation," said Sutherland. "The federal government has created a commission that's focused on understanding where the roadblocks exist. We encourage business owners to let policymakers know their concerns by making submissions to the Red Tape Reduction Commission."

The Sage Business Index survey reports are available at www.businessindex.sage.com.

Survey sample
The global survey received 6455 responses from small businesses in Canada, the US, the UK, Germany and France. Of the 580 Canadian respondents, 52 percent of them were either the owner/founder or CEO/General Manager and 37 percent accountant/payroll administrator. Some 87 percent of businesses who replied had an employee base of between 1 and 19. Of the businesses, 10 percent were less than 3 years old, 8 percent between 3 and 5 years old with 43 percent of them having operated for more than 20 years.

A sample size of 580 has a confidence interval estimate of + 4.0 percentage points at the 95 percent confidence level assuming conservative 50/50 response proportions.

About Sage North America
Sage North America is part of The Sage Group plc, a leading global supplier of business management software and services. Sage North America employs 4,000 people and supports 3.2 million small and midsized business customers. The Sage Group plc, formed in 1981, was floated on the London Stock Exchange in 1989 and now employs 13,400 people and supports 6.3 million customers worldwide. For more information, please visit the Web site at www.sagenorthamerica.com. Follow Sage North America on Facebook, http://www.facebook.com/SageNorthAmerica, and Twitter, http://twitter.com/#!/sagenamerica.

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