The pursuit of growth: Strategies for overcoming obstacles
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Regardless of whether a business is seeking to make it past the start-up phase, satisfy a major increase in demand for its products and services, or strengthen its competitive position, growth is a vital step in the development of a small or medium-sized enterprise (SME). This presentation looks at how Canada’s SMEs meet the challenges of growth and identifies four winning strategies that leading SMEs are using to achieve sustained growth.
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The pursuit of growth: Strategies for overcoming obstacles
- 1. THE PURSUIT OF GROWTH: Strategies for overcoming obstacles Pierre Cléroux, Vice-president Research and Chief Economist Calgary Chamber of Commerce, October 20, 2015
- 2. 2 | IS GROWTH POSSIBLE FOR CANADIAN BUSINESSES?
- 3. WHY FOCUS ON THE GROWTH OF SMES? Despite a weakened Canadian economy, SMEs still generated of Canadian jobs 71%
- 4. 4 | Very important Not at all important 10 0 1 2 3 4 5 6 7 8 9 SME average GROWTH IS A PRIORITY FOR CANADIAN SMES 7.1 Source: SMEs and Growth: Challenges and Winning Strategies, 2015, www.bdc.ca Degree of importance that leaders attach to growth
- 5. 5 | Very important Not at all important 10 0 1 2 3 4 5 6 7 8 9 SME average Strong Sustained Other MOTIVATION IS A KEY FACTOR FOR GROWTH 7.1 7.9 7.7 6.6 Source: SMEs and Growth: Challenges and Winning Strategies, 2015, www.bdc.ca Degree of importance that leaders attach to the growth of their business
- 6. 6 | 58 72 77 80 84 85 91 % * Total of “very important” and “moderately important” responses Source: Ad Hoc Research, Survey on the growth of Canadian SMEs, June 2015, n = 434 (respondents experiencing strong or sustained growth). WHY GROW? GROWTH BENEFITS LEADERS, EMPLOYEES AND THE COMMUNITY Improve the financial situation of leaders and their families Make work more interesting and provide opportunities for advancement Make the business more competitive Secure sounder financial footing to ensure survival Produce a bigger impact on the community Undertake larger, more interesting projects Increase shareholder satisfaction
- 7. 7 | 12 29 59 0 10 20 30 40 50 60 70 Strong Growth Sustained Growth Modest Growth Revenue growth over the last 3 years 41% 41% OF CANADIAN SMES OUTPERFORMED THE ECONOMY Source: Ad Hoc Research, Survey on the growth of Canadian SMEs, June 2015, n=1,015. Canada : Revenue growth over the last 3 years
- 9. 9 |SOURCES: Bank of Canada, Statistics Canada and Industry Canada. KEYS TO GROWTH: WINNING STRATEGIES FOR SMES Build your talent pool Be client-centric InvestInnovate 1 2 3 4
- 10. 10 | What are their values? Who are they? BE A CLIENT CENTRIC BUSINESS Where are they? Get to know your clients well 1
- 11. 11 | What will it look like in 5 years? BE A CLIENT CENTRIC BUSINESS What will it look like in 2 years? Recognize what’s happening in your market 1
- 12. 12 | Don’t ignore what’s happening in your market What will your market look like in 2, in 5 years? BUILD YOUR TALENT POOL2 85%OF BUSINESSES INVEST IN WORKFORCE TRAINING
- 13. AGEING RAPIDLY THE CANADIAN POPULATION IS Median age of the Canadian population (Estimations for 1994, 2004 and 2014 and projections for 2024 and 2034) 34 38 40 41 42 1994 2004 2014 2024p 2034p Source: Statistics Canada
- 14. DECLINEIN THE COMING YEARS LABOUR FORCE GROWTH IS EXPECTED TO Source: Statistics Canada 1.2% 1.0% 0.2% 0.3% 1994-2004 2004-2014 2014-2024 2024-2034
- 15. 15 | 55% OF GROWING BUSINESSES HAVE DIFFICULTIES HIRING AND RETAINING QUALIFIED PEOPLE
- 16. 16 | STAY ON TOP OF YOUR GAME, INNOVATE Offer new products and services more often Adopt new technology more quickly Improve their processes and enhance efficiency The most successful businesses… 3
- 17. 17 | INVEST4 Source : Statistique Canada et Bureau of Economic Analysis (États-Unis), 2015 100 110 120 130 140 150 160 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Index (2010Q1 = 100) Investissement dans les TIC par travailleur The gap is widening between U.S. and Canadian business investment in M&E ICT investment per worker US Canada
- 18. 18 | 30 40 50 60 70 80 90 100 110 1987 1991 1995 1999 2003 2007 2011 % ICT Investment per worker SOURCE: Centre for Study of Living Standards Database, table S1. Total ICT investment per worker in the business sector Canada relative to the U.S. INVEST4 ICT investment per worker US Canada
- 19. Source: ? 75%OF GROWING CANADIAN BUSINESSES INVEST IN FACILITIES, EQUIPMENT AND ADVANCED TECHNOLOGIES INVEST4
- 20. Source: ? 30% OF SMES EXPERIENCING STRONG GROWTH HAVE KEPT THE NUMBER OF EMPLOYEES AT THE SAME LEVEL INVEST4
- 21. 21 | IS GROWTH POSSIBLE FOR CANADIAN BUSINESSES?
- 22. 22 | Follow us: BDC BDC_News @pierrecleroux THANK YOU BDC Entrepreneur bdc.ca/economist
Editor's Notes
- Today I want to talk about growth, about business growth Our business environment is changing more rapidly than ever before, Its becoming more complex, more competitive, and more uncertain. More complex because consumer behaviour are changing rapidly More complex also because technology is evolving disrupting processes, production and even sectors. It is also very competitive. In all our research, and each time I talk to entrepreneurs, the first challenge they mention is how the market is competitive. There are more players, more businesses competing with us. As a result we are facing more competition here on the Canadian market and outside the country. Finally, our business environment seems to be more uncertain. The oil price drop by 60 percent, China economic growth is questioned and I could on and on. In this complex, more competitive, and more uncertain environment, is it possible to still grow a business? Over the last three years, 41% of Canadian businesses have outperformed the economy. 41% have experiences strong or sustained growth. We are going to look at why these entrepreneurs have the motivation to grow their business and how they did.
- First, why growth is important
- If you ask policy makers and economists, they will tell you that business growth is very important In Canada, 71% of the jobs created in the private sector over the last 10 years were crated by small and medium businesses Consequently, it comes at no surprise that governments seek to support the development of SMEs But is growth important for business owners?
- Our research is showing that growth is important of Canadian business owners. How important is it? On a scale of 1 to10, the average score is 7.1 . Regardless of their sectors, regions or the size of their business, business owners want to grow their business 38% of the respondents gave a 10 38% of Canadian business owners gave a 10 Canadian businesses are motivated
- And motivation matters! There is also a correlation between motivation and growth In our research, businesses experiencing the strongest growth have also express the highest motivation for growth This result is consistent with other studies The main foundation for business growth is its leader will and commitment
- Why growth is important for business owners?
- And many Canadian businesses are growing. Despite our complex, competitive, and uncertain business environment, 41% of Canadian businesses have experienced strong or sustained growth over the last three years Can we do better?
- Is it possible to grow? Even in this complex environment it is possible to grow Our study that for 41% of candian business is answer is yes The four strategies are not I hope I gave an idea how growth is possible and I gave you a road map to get there
- And on that note, I’d just like to mention that at BDC, we have a very experienced team of consultants who can help you with every part of e-commerce and Internet Marketing. We’re in the business of helping Canadian entrepreneurs to succeed so you can be confident that we’re on your side and our advice is objective. Please don’t hesitate to contact us. If you want to learn more about e-commerce, I encourage you to download our free eBook. This presentation was partly based on the book and it really is a great resource. You can find it by searching our website at BDC.ca for “e-commerce eBook.” And with that, I’ll open the call to any questions you might have. Please don’t be shy.