5
SMALL BUSINESS MONTH - Supplement to The WInnipeg Free Press - Wednesday, October 23, 2013
Pace of change remains slow for Canada’s small businesses
The same survey showed heightened optimism in Atlantic Canada, while regions such as Ontario still need to regain some of their footing. “There’s definitely a huge focus on helping get small business on their feet and a lot more investment in local industry. With lower interest rates, they have the ability to improve efficiencies on the operational level.” While businesses may not be facing a clear run at growth, there could be some momentum in higher growth sectors such as technology in 2014. According to John Muffolini, technology media telecommunications leader for Deloitte in Toronto, “A lot of technology companies are seeing some optimism. It’s showing fast growth versus static sectors such as manufacturing, consumer goods and distribution.” Technology is also attracting more attention from investors. Those who were sitting on the sidelines are now putting funds back into the sector, and the startup community is getting a big boost from a growing number of incubators and accelerators. Other SME sectors with more promising prospects include health and fitness, specialty food stores, employment services, computer consulting, and business management and support, says Ted Mallett, vice-president and chief economist with Canadian Federation of Independent Business in Toronto. “Manufacturers dealing with niche products or processes that can’t be easily copied are also optimistic about the outlook.” He agrees the economy has settled down into “a bit of an underperforming phase. Everybody was hoping for the U.S. and European Union economies to show a way out of the recession, but it has taken longer than expected. Whether we’re in or out of the yo-yo is hard to say.” One bright note is that financing is less of a hurdle for SMEs than in previous years, says Pierre Cleroux, chief economist and vice-president of research for BDC in Montreal. He reports that the approval rates for financing were 90 per cent in 2011, versus 80 per cent in 2009. “Having said that, knowledge-based younger
Denise Deveau Postmedia News W hen it comes to Canada’s small business landscape, the prospects may not be bright but they’re no worse than they have been in recent months. Small and medium enterprises (SMEs) as a whole continue to struggle with a sluggish economy and increased competitive forces with marginal results to show for their efforts. “To be brutally honest, not that much really has changed,” said Doug Porter, chief economist for BMO Capital Markets in Toronto. “From a macroeconomic standpoint, the economy is still grinding ahead at modest (1.5 per cent) growth rates, currency is still close to parity and interest rates remain low.” This comes as no surprise, he adds. “We weren’t expecting a whole lot out of Canada’s economy this year. It’s lacklustre at best. And we’re not getting much help from our biggest trading partner.” While there have been some subtle changes, indications are that the coming months will bring more of the same. Interest rates are not expected to rise dramatically over the near term, and the dollar will hold relatively steady in the months to come. Manufacturing continues to be one of the weakest sectors, although construction turned out to be more resilient than anticipated. Regional economies for the most part performed as expected, with the western provinces continuing on a growth curve led by Alberta. Newfoundland and Labrador has also shown above-average results. This bodes well for small businesses servicing the major industries in those regions. Sim Mehanger, commercial banking area manager, Bank of Montreal in Vancouver, says its research shows British Columbia’s SME community is showing above-average levels of optimism. “We’re definitely seeing food service, technology, natural resource and trades setting up independent businesses here. A lot of existing owners are also investing in their businesses in order to get themselves ahead of the game.”
BMO has newly minted Doug Porter as their chief economist. Peter J. Thompson/National Post
companies less than two years in business with younger owners have a bit more of a challenge in that area.” He identifies three key areas of opportunity worth considering. First, an aging population means a growing number of older people with more money to spend than previous generations. “That’s
creating a new market for a lot of SMEs.” Another is the escalation in online activity.
“Fifty per cent of Canadians are buying online, but only 17 per cent of SMEs are selling online. There are a lot of opportunities related to online activities, whether it’s to sell or simply communicate your products and services.” The third opportunity is emerging economies. “Growth is not happening in North America or Europe or Japan right now,” Cleroux said. “Small organizations have to rethink the way they do business because most of the opportunities are going to come from emerging countries with a growing middle class that has more money to spend.” The most important thing to remember is that despite the slow growth, small business success is essential to the future of the Canadian economy, Mallett says. “Big firms don’t just pop up by themselves. They start from a small base. The process of turning one small firm into a behemoth is what drives economic growth in this country.”
Making leap from groceries to junk
JustJunk.com owner/ operator David Hayes, left, and employee Pat Middleton in Windsor, Ont.
Entrepreneur knows he’s taking away people’s memories
BDC SMALL BUSINESS WEEK TM October 20–26, 2013
Dave Hall Postmedia News
WINDSOR — After 25 years in the grocery business, Dave Hayes decided he wanted more autonomy and jumped feet-first into the junk business. The former manager for Loblaws and Shoppers Drug Mart left the security of a full-time job six months ago and launched a Windsor, Ont., franchise of Just Junk, a company which specializes in picking up large residential loads of appliances, furniture, household goods and other bits and pieces of junk. “I’d been looking casually at a variety of options and I was originally looking for something I could do on the side while still working at Zehrs,” said Hayes, who was managing a Superstore in Sarnia until he started his own business. “I was looking for a manager-type role in a franchise operation rather than something I’d have to do full-time. “But after doing some online research and talking to a group of Just Junk franchisees, it seemed to be a good fit,” said Hayes. “It’s essentially a service job, and that’s what I’m used to, but it’s still different enough to be fresh and challenging.” Hayes even went to Hamilton and worked on a Just Junk truck for a day to get a first-hand inside look at the company’s daily operations. “Management has been incredibly supportive and helpful in making sure the launch went smoothly,” said Hayes. A rival company no longer operates in the Windsor market, according to its website, and Hayes said the main competition now comes from fill-it-yourself bins. “They have their place, especially if you’re doing a day-long reno job, but for one-off pickups, we’re competitively priced,” said Hayes. Hayes said he and his employees also handle deck demolitions and hot tub removals, among other projects. “A lot of what we do involves estate situations where someone has died, so we’re sensitive to those situations as well,” he said. “We’re removing memories so you have to be delicate because those memories get more important as you get older.” Hayes said his one-truck operation picks up between 15 and 20 tons of junk a month and about one-quarter is recycled and never sees a landfill. “We work with Habitat for Humanity and donate whatever they can use and we try to recycle as much as possible because that’s what our customers expect,” he said. “A lot of people do care where their junk is going and if we can recycle, why wouldn’t we?” Bookings are largely made online through JustJunk.com and a potential job starts with a free quote. A pickup is usually scheduled on the same day. Hayes said Just Junk charges by volume rather than weight with one-16th of a truck costing $50, a half-truck load costing about $300 and a full load of 400 cubic feet up to $450. “If we fill a full truck after emptying out a basement, attic or crawl space, it will likely be the full amount, but if the junk is stacked in a garage or a driveway for easy loading, that’s taken into account with a reduced price,” said Hayes. Hayes currently has three employees, one full-time and two part-time with plans to add more as business builds. Just Junk was launched in St. Catharines and now has locations across Ontario, Nova Scotia, British Columbia, Alberta, South Carolina and North Carolina.
SUCCESS AHEAD! MAPYOUR FUTURE GROWTH Learn, network, celebrate!
@bdc_news #sbw2013 BDC Entrepreneur bdc.ca/sbw FOLLOWUS
MARION WITZ Elizabeth Grant International
Powered by FlippingBook