Small business owners remain optimistic

Staff hiring and retention became more challenging this year.

Despite the long hours, cash flow worries and HR challenges, Canada’s small business owners are an optimistic group. According to the 2011 TD Canada Trust Small Business Survey, 50% of business owners think 2012 will be a good year for their business and a further 13% believe that 2012 might be their best year yet.

These optimistic findings from the annual survey, which examined the attitudes and behaviours of small business owners in Toronto, Montreal, Vancouver and Calgary, are supported by owners’ grading of their own company’s performance over the current or most recent fiscal year. Two-in-ten small business owners gave their company’s performance an A+ (5%) or A (16%), 44% graded their business a B, 22% gave their businesses a C, and 11% gave their company a D.

“It’s very encouraging to see the majority of small business owners are so optimistic about their business prospects in 2012,” said Alec Morley, senior vice president, small business banking, TD Canada Trust. “It’s evident that many entrepreneurs are experiencing success despite the barriers in their way and this is due, in part, to good business planning, hiring talented teams and innovating.”

According to the survey, those business owners who gave their companies’ performance A or A+ grades stated they succeeded because they made smart business decisions that allowed them to exceed projections (95%), hired great talent and retained the right people (87%), forecasted well (86%) and innovated with the right products and services at the right time (84%).

Barriers to small business success 

Operating a small business does have its challenges. In 2011, recruiting and engaging quality staff moved up on the agenda for small businesses. According to the survey, small business owners identified attracting staff (76% versus 66% in 2010) and retaining staff (72% versus 64% in 2010) as two of the top barriers to success facing small business owners today. Perhaps not surprisingly, those business owners who say they work more than 60 hours a week are more likely to cite retaining staff as one of their most significant barriers to success (77%).

Although human resource issues were identified as greater challenges in 2011 than 2010, cash flow management continues to top the list as the most significant barrier to small business success. Seventy-eight percent of small business owners identified cash flow management as a significant barrier to the success of their business, with 41% saying it is very significant.

“Whether you need funding for innovation or are simply managing the time gap between payroll and getting paid by customers, access to sufficient cash and credit is integral to running a successful small business,” said Morley.

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