Business leaders of Canadian small and medium-sized companies are optimistic about the future, with 62 per cent expecting to grow in the next six months, according to a new report by Zoho Corp.
More specifically, 38.2 per cent expect growth of one to 10 per cent, 15.4 per cent estimate growth of 10 to 20 per cent and 8.5 per cent forecast growth of above 20 per cent, the Zoho Canada SMB Outlook Report, which surveyed 1,016 Canadian business leaders in March, showed. However, 31.2 per cent are expecting zero growth and only 7.8 per cent are expecting declines.
“Canadian SMBs continue to be confident about business growth, and indicate that employees are key in terms of lessons learned, business challenges, and tech priorities,” Chandrashekar Lalapet Srinivas Prasanna, managing director of Zoho Canada, said in a press release. “The fact that SMB leaders are successfully navigating today’s economic, staffing, cybersecurity, and customer privacy challenges, while still remaining highly optimistic about business growth and profitability, suggests that Canada could fare well during a possible upcoming recession.”
Businesses are also generally holding steady on their staffing needs, with 70 per cent projecting no change in their employee levels, 26 per cent hiring and just four per cent anticipating layoffs.
Two of the key lessons learned over the past 12 months focused on staffing, with 22.1 per cent increasing employee pay and benefits and 20.5 per cent implementing more flexible work models.
Other lessons learned last year included adopting more aggressive pricing (20.6 per cent), implementing cost reductions (19 per cent) and increasing efficiencies (17.8 per cent).
Nearly twice as many respondents (42.3 per cent) said inflation was more of a challenge for businesses than interest rates (21.7 per cent), although its impact is weakening as the consumer price index dropped to its slowest pace since the summer of 2021 in March.
Nearly half of respondents indicated inflation continues to impact their business, but that’s down from almost 65 per cent last year. Fewer also said inflation was impacting hiring offers than a year ago.
As for interest rates, 43.1 per cent of business leaders said they have not impacted their business.
But 36.2 per cent said they have had to adjust their pricing because of interest rates. Some have increased prices (28.2 per cent), delayed capital expenses (18.1 per cent) and even delayed hiring (10.6 per cent).
The two top technology priorities directly affected employees, as 21.1 per cent of businesses facilitated remote work and 20.5 per cent invested in talent and digital skills.
Business leaders seem to be confident in their cybersecurity (50.8 per cent) and how customer privacy is handled (53.8 per cent), but Zoho warned this confidence may be misplaced since a third of respondents don’t know their business’s process.
“Even if the economic context presents challenges for companies today, as technology continues to evolve, it becomes more accessible and a strategic ally,” Maria-Cecilia Arango, administrative assistant at Richporter Lightning, said in the release. “I am optimistic about the growing number of users who will be empowered to shape a brighter future this year and beyond.”