Even though most Canadian small businesses are suffering declines because of the recession, owners are investing in their businesses rather than simply waiting out the downturn, according to a new American Express survey.
About 55% of respondents said they're investing in improving product designs and developing new offerings instead of simply preserving cash in the recession. Entrepreneurs are using the recession as an opportunity to stay ahead of their competition by maintaining or increasing their competitive advantage: 61% said they've earmarked a portion of their company's revenue for improving their business.
About 20% are using credit cards or bank loans; a third said they were dipping into their personal savings to improve their business.
Some of the key reasons for their investments included improving profitability, attracting new customers and improving their product offerings.
Small business owners in Western Canada have been hit the hardest by the recession, the survey found, with 62% in Alberta and B.C. reporting a downturn in their business. A drop in business was reported by 58% of Quebec small businesses and 55% of those in Ontario. Businesses in the Prairies and Atlantic Canada have fared the best with only 40% of businesses in both regions reporting a downturn.
Despite B.C. businesses witnessing the hardest downturn, the province's business owners were the most optimistic in Canada: 77% said they felt confident about their business prospects in the next six months; 74% in Ontario said they felt the same way.