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Canadian small business owners go it alone


June 16, 2011
By Amanda Ryder

June 16, 2011 – According to the
quarterly American Express Small Business Monitor, entrepreneurs
recognize planning, hiring, and marketing as key business functions but
admit to spending a big part of their day on tasks such as office
administration, cleaning and repairs.

June 16, 2011 – Canadian small business owners say
they are spending a lot of time sweating the small stuff when they
could be focusing on the big picture of how to grow. According to the
quarterly American Express Small Business Monitor, entrepreneurs
recognize planning, hiring, and marketing as key business functions but
admit to spending a big part of their day on tasks such as office
administration, cleaning and repairs. It would appear a big part of
Canada's business backbone is caught between planning for success and
maintaining the status quo.

More than half (59%) of respondents to the latest survey, conducted by
Angus Reid Public Opinion, say their business would be in a much better
position if they could spend more time doing what they're good at.
Specifically, small business owners say more than a quarter (26%) of
every day is focused on activities they don't consider core to their
business. Almost half (48%) report that they can't concentrate on
growing their business because they are spending too much time running
it, and many remain reluctant to hire outside help to share the
workload.

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"We know small business owners put their heart and soul into everything
they do, so a reluctance to rely on others is only natural," said Eric
Nielsen
, Vice President & General Manager, Small Business Services
Canada, American Express Canada. "But looking for outside help for even
a few tasks can allow owners to focus on the work they love and the
reason for starting their own business in the first place."

Exactly what non-core tasks are small business owners taking on
themselves? Findings show owners are spending valuable time on such
tasks as secretarial work (49%), technical support (48%),
office/property repairs and cleaning (40%), and doing their own website
construction (30%), rather than hiring outside help. Control is a key
consideration for them: 56 per cent don't want to give up control over
any aspect of their business, even if it means doing everything
themselves.

It's not that small business owners don't recognize the dilemma: 38 per
cent of respondents say they waste a lot of time doing things that
other people would be more qualified to do. Nevertheless, they are
reluctant to outsource for a number of reasons, including a desire to
maintain quality (38%), and the time it takes to hire and manage
outsourced contractors (24%). The single greatest factor, though, is
that outsourcing is seen by more than half (52%) as too expensive.

Hiring outside help not uncommon, but focused on highly specialized
skills

Certainly, controlling costs is a paramount concern, particularly as
small business owners are starting out. But while cash may be the most
precious resource for start-ups, time may become more of a factor as a
business matures.

"There's a sweet spot for outsourcing between the time when you are too
busy to do everything yourself and when it makes sense to hire someone
fulltime," Nielsen said. "And the nature of outsourcing makes it easy
to bring that function back in-house when the time is right to hire."

Almost three-in-five (59%) have actually hired help for at least one
task in the last six months, according to the survey results. The tasks
most frequently outsourced were only those that required very
specialized knowledge:

  • Business taxes (37%)
  • Website construction/maintenance (35%)
  • Technical support (32%)

Of those who have embraced outsourcing, the main reason cited is the
recognition that other people are more qualified to do the work (34%),
compared with 22 per cent who say their time is best spent focusing on
things they do best.

"We may see owners become more willing to outsource some tasks as they
move towards a goal of business expansion rather than maintaining the
status quo," Nielsen said. "Hiring a third-party is not only low risk
but can fill a temporary need for business-critical skills."

More owners making growth main priority, willing to take bigger risks

Small business owners are indeed working harder to find more time and
the funds to get outside help, which may be in preparation for
ambitious plans to come. The American Express Small Business Index
shows that more small business owners identified growth as their main
priority over the next six months than in the previous quarter (up
three points since last quarter to 31 per cent). Additionally,
respondents said they are more willing to take risks: those willing to
take significant or above average risks in the next six months climbed
to 22 per cent, up six points.

Those small moves may reflect a confidence that the economy is leveling
out, if not yet improving overall.

A third (33%) of respondents are seeing an improvement in their
business, while 38 per cent are still experiencing a downturn. Both
figures are little changed. Those respondents who are hopeful that
business will get better also remains unchanged this quarter from
January at 47 per cent, with another 28 per cent not expecting any
change to their businesses' financial position.

Small, cumulative changes have pushed the Index up a single point from
January 2011 to 66 per cent or "C", matching the levels seen one year
ago.

"We saw in previous quarters, small business owners were awaiting signs
of recovery before making any moves, Nielsen added. "We're now seeing
them test the waters with a greater appetite for risk and in some
instances, gearing up for growth plans with outside help. If the trend
continues, we should see some interesting activities during the rest of
the year." 


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