How the current economic climate is affecting small businesses in Canada

Our lives post-pandemic have begun to look quite different, and the same applies to businesses. No longer do businesses solely rely on in-person relations and stores. Rather, we now have more small businesses with wider online capabilities, adopting tech and collaboration tools and pushing for more partnerships among themselves.

The current economic climate, specifically in Canada, has required that small business owners put extra effort into surviving and subsisting. The COVID-19 pandemic has caused Canada to experience a drastic drop in its GDP rate. Currently, the Canadian economy is predominantly made up of small and medium-sized businesses, which implies that these small businesses have a substantial impact on the general economy of Canada.

If you have a small business and are wondering how the current economic state may affect you, here are the major things you should be considering.

Four ways that small businesses have been affected

The current economic climate has had a profound effect on small businesses. Here are four ways that small businesses have been affected

1. An increase in online sales capabilities

Before the pandemic, a number of small businesses existed online simply as an extension of their physical stores. The majority of these businesses barely paid attention to online marketing and building an online presence. However, the pandemic has caused a shift in this regard.

One major reason why small businesses now need online sales capabilities is the reduction in person-to-person relations. Day by day, fewer people are seeing the necessity of going out of their comfort zones to get goods or some specific services.

There are a number of ways that sales can be increased as a result of an online presence. They include the following:

  • Improved company image
  • 24/7 availability of business services
  • Better customer experience and support
  • Lower start-up costs
  • Better payment options
  • Ability to work from anywhere
  • Reduced operational costs
  • Wider market reach
  • Better responsiveness to customers

The current economic climate is quite tough for small businesses, as they have to compete with big businesses that are already well-established online

2. Further adoption of tech and collaboration tools

Another way that the current economic shift is affecting businesses is through the compulsory introduction of technology and collaboration tools. Before now, businesses could run conveniently without the need for specific tech tools. However, not only do these small business owners now need to get these tools, but they also need to learn how to use them effectively.

With more businesses tilting toward the use of online tools for operations, and the transitioning of employees to a teleworking model, there has been an upsurge in adopting several technologies for small businesses.

In this regard, it is important to create a disaster plan before you need it as a small business owner. Five years ago, nobody could have predicted the pandemic hitting the world. However, those who had already established processes to deal with unexpected situations were on the winning side.

Small businesses now understand the need to make contingency plans that would cover business operations in case anything happens in the future.

3. More partnerships between small businesses

Now more than ever, small business owners understand the need for collaboration between their business communities. Most small businesses have experienced a drop in their revenue rate, and one way to come back from this is through strategic partnerships.

First, partnerships between businesses in the same climate will ensure that there’s an increase in the expertise and resources available to create better products and services.

Another way that partnerships are helping businesses is through the enhancement of business image and credibility. Partnerships today ensure that businesses influence each other and build on their strengths.

The business climate today does not require that small businesses work in isolation. As a small business owner, you should look for other businesses that have the same values as yours and find ways that you can collaborate for the benefit of the two businesses involved.

4. Paying more attention to business financials

Lastly, the current economic climate is a reminder for small businesses to pay attention to their overall financials. Irrespective of whether your business is new or has been existing for a while, pay attention to your operational costs, sales, expenses, profits, losses and existing capital.

However, if you’re a new owner of a small business, one major implication of the economic state is that you need to keep your overhead costs as low as possible and then keep investing as the growth comes to reduce your risks.

Thankfully, there are now various types of financial support for businesses, particularly in Canada. One of the best ones is getting a business loan from the bank. As soon as possible, begin to build your credit score to ensure that you qualify for the business loan you need. There are a number of grants that you may be eligible for from the government. One of them is the Canada Small Business Financing Program (CSBFP).

Small business owners should understand that despite being referred to as ‘small’, several important factors need to be put into place to ensure that they’re prepared enough to run a successful business. One of them is getting an appropriate education. Although getting an education is not a prerequisite to starting a business, gaining educational skills is a step in the right direction. You can do this by getting an MBA online to broaden your business knowledge.

Aston University Online offers an MBA program that can help you with the skills you need to start or run a small business. The program covers topics such as finance, marketing and operations so that you can gain a well-rounded understanding of how to run a business. Additionally, the program is flexible, so you can study at your own pace and fit the courses around your busy schedule.

To conclude

By taking the necessary steps today, you’ll be able to ensure that your small business survives the current economic climate.

Christopher Lewis

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