A majority – almost 60% — of Canadian small and medium-sized enterprises (SMEs) say they intend to invest in their businesses within the next 12 months, according to a survey on investment intentions released today by the Business Development Bank of Canada (BDC). Entrepreneurs say they plan to invest in Machinery & Equipment, Human Resources, working capital for marketing, and Information Technologies to increase their productivity. They also invest to create new products, develop new markets and increase production capacity.
“There is no better time to invest than now,” said Jean-René Halde, President and CEO, BDC. “Success will belong to business savvy entrepreneurs who plan and invest in their businesses to make them more productive, innovative and growth-oriented. More Canadian businesses need to take the initiative and invest in their growth.”
BDC announced the survey results for the launch of BDC Small Business Week™, which runs from October 14 to 20 under the theme “Aim High! Invest in your future.”
“Although these are encouraging results, we would like to see these good intentions translate into actual investments,” says Pierre Cléroux, Chief Economist, BDC. “The business environment is changing and entrepreneurs need to invest to stay ahead of the competition.”
Half of Canadian entrepreneurs polled who said they would not invest in the next year say it is not by choice. The main obstacles cited for not moving forward with their investment plans include insufficient working capital (50%), access to credit (30%) and an uncertain national economy (29%).
“We see that it’s the very small businesses that are struggling the most to get much needed access to credit,” adds Mr. Cléroux.
BDC’s study also found:
- Out of the 56% who said they would invest in the next twelve months, half (28%) stated they will “definitely” invest and 27% said that they “probably” would invest.
- Respondents from Western Canada felt less strongly that the lack of working capital is an impediment to further investment.
- Economic uncertainty was viewed as a deterrent to further investment by respondents across all regions.
- Almost three out of five entrepreneurs (56%) said that they intended to invest in Machinery and Equipment and Human Resources; more than half (54%) want to invest in working capital for marketing, while almost half (46%) in Information Technology and Communication projects. Notably, less than one out of three entrepreneurs intend to invest in land or property.
The BDC Research and Market Intelligence group conducted an online survey with the BDC View Points panel, which is comprised of business owners and professionals from across Canada with 1 to 500 employees. BDC sent out 2,629 invitations to panelists who were asked to complete the survey, which ran online from August 14- 26, 2012. 513 respondents, or 19.5% of SME panelists, completed the survey. Results were weighted according to region and number of employees.