As B.C. continues to boast the most robust economy in Canada, a recent survey has revealed that B.C. small business owners are concerned about getting twice bitten: less money coming in and more money going out. A study of 500 B.C. small business owners conducted by First West Credit Union found rising cost of expenses and a slow or declining economy were respondents’ top fears. Forty-six percent of those surveyed said increased expenditures was one of their high three concerns, while 44 percent said a stagnating economy was in their top three.
The fear over the economy appears to fly in the face of at least a few recent economic reports, which are calling for continued robustness for the B.C. economy over the short term.
“Expenses and the economy are always going to be our concern, but imminent challenges are likely tempering business owners’ response to sound economic forecasts,” says Avi Kay, regional manager of business banking at Envision Financial, a division of First West Credit Union. “The marketplace changes rapidly, so small business owners usually have to figure out how to adjust to things like new business regulations, tax or investment rules, or new competitors. These things require constant attention.”
Case in point: small business owners will be tuned in to Ottawa’s proposed changes to small business tax rules, now that parliament is back in. Taxes are part and parcel of a business owner’s concern over expenses.
“If the upward trend in corporate tax rates continues, it will negatively affect our ability to grow,” says Heather McRitchie of Haney Automotive in Maple Ridge. McRitchie, who co-owns the garage with her husband, says their business has grown steadily every year they’ve been in business. “This year will be a great year for us. Maple Ridge is a booming community with people moving in daily—and that’s good not only for our shop but all small businesses in the area.”
For Jas Rai, a minimum wage hike is top of mind when it comes to expenses being a top concern. Rai, whose entrepreneurial venture has enjoyed rapid growth in just a few years, owns three The Chopped Leaf locations in the Fraser Valley, with a fourth slated to open in the fall.
“Sure, I’m wrestling with the impact a $15 minimum wage will have on our growth plans,” she says. “With the strong economy, we’ve enjoyed solid growth over a few short years, so the additional expense will require that we look at things differently and adjust.”
The survey also revealed that small business owners appear divided when it comes to the province’s business climate over the next five years. Thirty-five percent of respondents feel the economic climate will worsen at least a little, while 47 percent think that the business climate will improve at least a few.
Kay says lack of overwhelming optimism about the economy or other concerns could also be attributed to a knowledge gap.
“Small business owners are often stretched thin. They typically perform many roles that would be done by several individuals in larger companies, so they may not have time to keep up with all the latest economic analysis and other constantly changing information.”
Partnering with other experts can help business owners allay their fears and address challenges proactively, Kay says. “Professionals like accountants, lawyers, business banking advisors and marketers all have specialized skills and are immersed in their discipline to a level that a small business owner could never be. They’re indispensable and should be part of a business’ team.”
Many small business owners appear to embrace this truth, as the survey showed that close to half of the small business owners surveyed said that strategic and other business planning advice is one of the top three things their business banker should provide.
Envision Financial is a premier provider of banking, investment and insurance services for residents and businesses throughout the Fraser Valley, Lower Mainland and Kitimat regions. As a division of First West Credit Union, B.C.’s third-largest credit union with 54 branches and 39 insurance offices throughout the province, Envision Financial brings innovative products, an extensive branch network and local decision making to the banking experience. Visit envisionfinancial.ca for more information.