Oct 14, 2014
But only one-third planning to expand over next 3 years
TORONTO (CP) — A majority of Canadian business owners recently polled say they are optimistic about the future, but have no plans on growing their businesses.
The CIBC survey of 800 owners and managers found that 84 per cent have a positive outlook for their businesses, while about 44 per cent say their financial standing is better today than it was a year ago.
Despite the optimism, only about one-third (37 per cent) are counting on expanding their businesses in the next three years.
A majority (79 per cent) of those polled also say they are sitting on cash reserves, with 40 per cent saying they’re not earning any interest on this cash.
But of those that do plan on expansion, 60 per cent say they won’t be using cash reserves. Instead, they’ll use credit cards, loans or money out of their own pocket to fund their company’s growth.
Shelley Swanlund, vice-president of business banking and the head of small business at CIBC, says business owners should not see their cash reserves as a “rainy day” fund to be used for emergencies but, instead, a fund to help expand their businesses.
The poll was conducted by Leger online from Sept. 15 to 19. The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error as they are not a random sample and therefore are not necessarily representative of the whole population.
“While many businesses do have cash on hand, most tend to see it as a rainy day fund they can access in the event they have a slower month with their cash flow or have an unforeseen emergency,” said Swanlund.
“But this effectively leaves these funds on the sidelines rather than supporting the business. As a result, many business owners turn to their personal finances to fund expansion plans, which may limit the capital they have available.”