The first trend identified is that small businesses in Alberta are growing. According to the survey, over two-thirds (68%) of small businesses have increased their company’s revenue over the past five years. Only one-fifth saw any kind of decrease, and 13% saw no change. This is extremely positive, especially considering what market conditions were like over the past five years. Between 2006 and 2011, the global economy has been knocked around pretty hard. And even Alberta’s economy experienced a severe recession in 2009. The fact that most small businesses continued to grow their revenue over the past five years speaks to their energy and vitality.
Another interesting finding is that small businesses tend to be... well, small. VERY small, in fact. Nearly 65% of the participating businesses have five or fewer employees, and about 30% have total annual revenue of less than $100k. Many of these would be self-employed proprietors. Alberta is known for its entrepreneurial spirit, and in every downturn (such as in 2009) the number of self-employed individuals soars. Layoffs from big corporations don’t keep Albertans down for long; rather than sitting around with nothing to do, they strike out on their own, often setting up professional consultancies or starting their own business with the skills and knowledge they’ve acquired. It’s a testament to the business energy pulsing through the province’s veins.
Small businesses also appear to like what they’re doing. Forty-two percent report that the thing they enjoy most about owning a business is the pride that they can take in providing their service to the community. Independence is also important, with 20% of respondents claiming that being their own boss is what they enjoy most.
But it hasn’t been all rainbows and sunshine for small businesses either. The survey reveals some serious concerns and constraints on growth, including lack of time. Small businesses are ambitious, but 60% of them reported they have insufficient time to get everything done. Half of them reported not enough time to spend on “the Big Picture” of strategy and business planning.
As well, a third of small businesses are reporting shortages of skilled labour—a ghost of pre-recession Alberta which appears to be coming back to haunt businesses as the economy is picking up. Over 40% report problems in retaining key employees. And about one-third of small businesses are experiencing a shortage of access to financial credit—26% report having only some of the business credit they require, and 14% report no access to business credit at all.
Yet looking ahead, Alberta’s small businesses tend to be optimistic about their prospects. Over half of survey respondents (52%) plan on hiring new employees within the next six months. Nearly 29% report experiencing “considerable growth” and another 35% report “business is stable and maintaining market position.” Only 2% expect to wind down or reduce the size of operation.
And the #1 area in which companies are expecting to invest over the next year? Marketing, with over 56% of small businesses planning to increase their efforts. Investment in people ranks a close second. That speaks to optimism, ambition, and confidence in the product or service the business is offering.
Small businesses in Alberta are the lifeblood for many towns and communities across the province, and even in the large cities they provide employment and growth opportunities for thousands of individuals. Their flexibility to changing conditions and ability to feel the pulse of their immediate community makes them indispensible contributors to Alberta’s dynamic economy.