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Top challenges facing small business owners


October 15, 2010
By Amanda Ryder

Oct. 15, 2010 – What comes between Canada's small businesses and
success? TD Canada Trust's recent Small Business Survey has pinpointed
the three biggest challenges.

Oct. 15, 2010 – What comes between Canada's small businesses and
success? Cash flow. Managing clients. Government red tape. These top
the list of the barriers faced by small business owners. But, despite
the hurdles, 97 per cent of Canada's small business owners report that
owning a small business gives them a sense of pride and accomplishment,
according to the TD Canada Trust Small Business Survey.

"Without question, small business owners are a resilient group,
continually working to overcome barriers that get in the way of their
success," says Alec Morley, Senior Vice President, TD Canada Trust.
"However, with 87 per cent of small business owners saying they are
happier being their own boss, clearly there are strong advantages to
business ownership, despite the challenges."

The challenges of small business ownership

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As rewarding as it is to manage a business, there is no question that
small business ownership has its difficulties. In addition to those
barriers to success, small business owners cited several other
challenges – the top three being managing, recruiting and training
staff (24 per cent), coping with stress and risk (23 per cent), and
financing and cash flow (22 per cent).

Overcoming challenges

To help meet financial challenges, Morley offers these three essentials strategies for small business owners:
 
    1.  Keep a close eye on the key metrics that are essential to your
        business' success

 
        "It is impossible to analyze every part of your business everyday.
        Instead, ask yourself, what are those essential measures that
        determine the health of your company? Whether it is speed of
        inventory turnover, utilization rates or total cash in the bank,
        ensure you have a system in place that provides an easy way to check
        those numbers in real time."
 
    2.  Understand how to read an income statement and balance sheet
 
        "Put yourself in the shoes of your investors, the bank where you
        would like a loan, or a potential buyer down the road and make sure
        you're at ease with how to read – and explain – your financial
        statements. TD Canada Trust has small business experts available in
        branches across Canada to help customers better understand their
        business' finances and develop tailored solutions to overcome
        specific challenges."
 
    3.  Forget the static five year plan
 
        "Given the speed of business today and the impact of ever-changing
        technology, a static business plan that lasts five years may be
        unrealistic. Your business plan should be a living document, updated
        at least annually with a rolling three-year forecast to make sure
        your business stays on track. And it's essential to have both a long-
        term vision for your company and a series of short-term goals. A good
        small business advisor can help you to map out the financial
        resources needed to take your business to the next level."
 
Small business and life balance

Despite their strong sense of pride and accomplishment, 59 per cent of
small business owners say that they find it difficult to separate their
business life from their personal life. Fifty-five per cent say they
spend too much time managing their day-to-day issues and cannot focus
on long-term growth and 54 per cent believe that owning their own
business is more stressful than working for someone else.

Barriers to small business success

Seventy-seven per cent of small business owners surveyed say that cash
flow management tops the list of barriers to success followed by
managing clients (72 per cent) and dealing with government bureaucracy
or red tape (70 per cent).



About TD Canada Trust Small Business Survey

The TD Small Business Survey examined the attitudes and behaviours of
711 small business owners in Canada. Small businesses were defined as
those companies having 5 to 50 employees. The research was conducted by
Environics Research between May 13 and June 15, 2010.


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