MONTREAL, May 27, 2015 /CNW Telbec/ - A new study released by the Business Development Bank of Canada (BDC) finds that high-impact firms punch above their weight by contributing disproportionately to the economy and have an opportunity to play an important role in helping to improve Canada's competitiveness. High-impact firms are defined as being mostly mid-sized (100 to 500 employees), although smaller firms with particularly high growth are also included in this category. They are found across all sectors and reflect the composition of the Canadian economy.
"The reality is that the world is getting increasingly smaller, and Canadian entrepreneurs face heightened competition from global competitors," stated Jean-René Halde, President and CEO, BDC. "Our economy needs healthy, performant SMEs with an appetite for risk in order to improve long-term competitiveness. – and Canada has many of the right ingredients."
The report, High-Impact Firms: Accelerating Canadian Competitiveness, looks at these particular firms that represent roughly 5% of all SMEs (or 50,000 SMEs) across the country, and examines the challenges they face in their efforts to become more competitive and to grow. It also proposes key actions on how to better support their growth so they can continue to positively impact Canada's economy.
The four challenges highlighted are as follows:
- Management capabilities: entrepreneurs are keenly aware that they must strengthen their managerial skills if they are to grow their businesses (i.e. lack of financial management skills, optimizing operations, developing and executing sales plans, strategic planning, ensuring human resources capacity for growth).
- New markets: the Canadian market is small. Increasingly small businesses are under pressure to expand abroad earlier and to a greater extent than their U.S. counterparts.
- Financing: many have difficulty obtaining higher risk financing, such as obtaining capital on flexible terms for new projects or markets.
- Labour: labour remains an important issue for high-impact firms. The Canadian labour force is not increasing quickly and will, in fact, remain flat in the next decade due to an aging population.
The importance of non-financial services on business success
"We've always known entrepreneurs need more than just money to succeed, which is why BDC has been offering consulting services in one form or another for more than 30 years. High-impact firms have similar, yet more complex needs and there is no silver bullet solution that will solve all of their challenges," added Mr. Halde. "However, we do know now that their challenges relate mainly to capability or management skills so we need to think carefully about how we craft solutions tailored to address these shortfalls. As Canada's development bank, we are uniquely positioned to be a catalyst in helping high-impact firms grow to the next level."
With this in mind, as committed in Economic Action Plan 2015, BDC will take steps that are, at their core, based on providing non-financial services for these firms.
- First, BDC will move its existing consulting services into a newly created business unit called BDC Advantage, which will offer a range of non-financial services for all entrepreneurs.
- Second, we will create a small team of highly experienced individuals within BDC Advantage that will focus on increasing the competitiveness of high-impact firms. They will do so by helping these firms assess their needs and find solutions to their challenges. The team will work in collaboration with third parties to facilitate access to other services that exist in the entrepreneurial ecosystem.
- Lastly, we will continue to offer and develop financial solutions adapted for high-impact firms and their less traditional financing needs.
For more detailed research results, download the full BDC study.
About the Report
The BDC Research and Economic Analysis Group conducted the research presented in the report, which consisted of two surveys of nearly 1,000 Canadian SMEs. For the first, BDC asked Leger Marketing to conduct a phone survey of 866 small and medium-sized business across Canada that focused on their challenges and solutions. The survey targeted business owners, CEOs and presidents (over 60% of the sample) as well as other key decision–makers, including general managers and other executives. The second survey was of 200 American small and medium-sized businesses to compare their key challenges, mindsets and reactions to solutions (including their potential impact), with those of Canadian companies surveyed.
Canada's business development bank, BDC, puts entrepreneurs first. With almost 2,000 employees and more than 100 business centres across the country, BDC offers loans, consulting services, growth and business transition capital, securitization, as well as venture capital to more than 30,000 small and medium-sized companies. Their success is vital to Canada's economic prosperity. www.bdc.ca
SOURCE Business Development Bank of Canada