They say government grants will help them succeed in 2022
Small and mid-sized businesses (SMBs) in Canada are optimistic that they’ll do well in the next 12 months, but admitted that COVID-19 still raises a concern amongst them. The latest report from Sage found that 67% of SMBs are confident that their companies will be successful 12 months from now, with their confidence attributed to the following:
- Quality of their staff (35%)
- Increased consumer spending (27%)
- Increased customer base (45%)
- Efficiencies adopted during the pandemic (25%)
"The challenges of the pandemic have illuminated the need for businesses to be on the path towards digital adoption, removing unnecessary friction and delivering insights that help them run their business more smoothly," said Daniel Oh, Country Manager (interim), Sage Canada.
Companies that don’t feel confident, however, attribute their lack of optimism to reduced consumer spending (41%), inefficiencies exacerbated by the pandemic (39%), and expected lack of government aid and support (20%).
Risks
Despite the optimism from companies, SMBs still admitted that they’re concerned about factors outside of their control that could have an impact on their operations. These factors include the following:
- Business interruptions due to COVID-19. This includes future lockdowns, travel restrictions, and employees contracting the virus.
- Increases in costs. This includes inflation, wage increases, and rent increase.
- Disruptions in the supply chain.
The study also unveiled that Canadian SMBs see cashflow/liquidity and limited access to financing as major risks to their business over the next 12 months. The latter was one of the biggest challenges faced by businesses amid the pandemic, with 60% of SMBs reporting that they had to look for alternative options for it.
They said that to have an alternative source of financial support, 19% of them used a line of credit or credit cards, 18% of them used government grants, while 14% admitted they used bank loans. Some nine percent also revealed that they went to their family or friends to financially support their businesses during the volatility of the previous year due to the emergence of COVID-19 variants.
Read more: Trudeau extends wage subsidy scheme to aid employment rebound
Is government support enough?
Over the past year, the government has extended various forms of aid to businesses to ensure that they remain afloat amid the pandemic. Sage’s report showed that these initiatives were regarded as essential by SMBs.
But is it enough? The report revealed that 44% agreed that support from the federal government cushioned the impact of the pandemic to businesses, compared to the 39% at the provincial level. Despite this, SMBs still see government support as a major contributor to their success as a business in the coming year, with 25% of them saying that increased government support, including financial aid and targeted support schemes, will be essential in their growth.
