October 26, 2023
Earlier this week, Abacus Data completed a national survey of Canadian small business entrepreneurs as part of the Business Development Bank of Canada’s Small Business Week.
The survey interviewed a representative sample of small business owners and leaders from October 11 to 16, 2023. The objectives of this study was to see how small business owners are feeling about their business and the broader economic environment, to explore generational differences in perceptions, and to understand the persistent perceptual gap in the thinking of small businesses that sees business leaders feeling good about how their business is doing even when they feel bearish about the Canadian economy.
Here is a summary of what Abacus Data found.
Bullish about their business; Bearish about the Canadian economy
Eight in ten small business entrepreneurs in Canada describe their business as doing very well or pretty well today. At the same time, 64% of these same business owners feel the Canadian economy is doing poorly. Despite pessimism about the country’s economy, the proportion of business leaders (80%) who think their business is doing well today think it will be doing well 12 months from now.
Moreover, when asked about profitability, demand, and sales, most think those aspects of their business will improve or stay about the same. In other words, despite most entrepreneurs believing that the economy is poor and will remain poor over the next 12 months, most think their business won’t be impacted that much.
So, the expected perceptual gap exists. 44% of business leadership who report their own business doing well also feel that the Canadian economy is doing poorly. Among those who think their business is doing pretty well, 64% believe the Canadian economy is doing poorly.
In contrast, fewer are likely to think their business is doing poorly but also think the Canadian economy is doing well.
Overall, almost half of Canadian small business entrepreneurs (44%) think their business is doing well despite believing that the Canadian economy is doing poorly.
What might explain this perceptual gap?
One place to look is the confidence that small business leaders have in their skills and the competitive position of their businesses.
Most Canadian small business leaders give themselves positive ratings when it comes to running their business. Between 50% to 70% believe they are doing an excellent or good job prioritizing and managing their time efficiently, leading people from different generations, protecting their business data, responding effectively to changing market and economic conditions, and balancing work in life. In short, entrepreneurs are pretty bullish on their own business abilities.
