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News and Views New and noteworthy information you can use by Robert Colman Ontario and Alberta lead SME growth CIBC is predicting that Ontario and Alberta will lead the country in small business activity over the next five years, according to a comprehensive study on small business called Canadian Small Business: A Growing Force. “A combination of factors have propelled Ontario and Alberta to the top of the pack, namely above-average economic growth, favourable demographics and a higher concentration of industries that are conducive to small business growth,” said Benjamin Tal, senior economist for CIBC World Markets. The CIBC report examines regional differences in the predicted growth patterns across the country. Ontario is given top marks in the report for its above average economic growth, the small-business-friendly nature of its fast-growing business service and retail sectors, a high number of new immigrants (who have a higher tendency to become self-employed), and relatively high levels of outsourcing activity. Alberta is closely behind Ontario in growth predictions, primarily because of positive spin-offs from the energy sector. A projected strong increase in the ranks of workers in the 35 to 55 age group is expected to spur entrepreneurial activity, because this group has a higher propensity to become self-employed. Quebec is also well-positioned for growth, given its expanding service industry, its heavy reliance on manufacturing activity and a relatively high level of co-operation between large and small businesses. For more information on predictions for other regions and provinces visit research.cibcwm.com/res/Eco/EcoCASBE.html. Effective supply chain management boosts profits Deloitte recently released a report from its global manufacturing benchmarking initiative, called Mastering Complexity in Global Manufacturing: Powering Profits and Growth Through Value Chain Synchronization. The study reveals that only 7% of companies surveyed are effectively managing their supply chain. These companies’ profit margins are 73% greater than other manufacturers with poor supply chain performance and less complex environments. In contrast, 84% of manufacturers with more than US$200 million in revenue rated themselves with average-to-poor supply chain performance and are struggling to effectively manage their complex supply chain, with more than half of the largest global manufacturers not meeting their cost of capital. The results of the study, which included responses from nearly 600 companies in 22 countries around the world, clearly indicate that effectively managing a complex, global supply chain has a positive impact on a company’s financial performance. Deloitte found that it’s not simply supply chain initiatives that manufacturers deploy that make the difference, but that the key to generating financial performance is synchronizing the supply chain and managing it from a holistic, rather than fragmented, view. The study attempted to determine some best practices for the industry and came up with three factors that differentiate top performers from the rest of the pack:
As Scott Akman, global supply chain leader for Deloitte’s manufacturing practice, explains, these companies “have developed an overall process view of their supply chain, rather than a functional view. This end-to-end approach enables them to optimize the supply chain process across the entire organization and generate significant profit and returns.” For more information visit www.deloitte.com. Insurance premiums hurt Canadian small businesses A recent CIBC telephone poll conducted by Decima Research found that 55% of Canadian small businesses were negatively affected by the rising cost of insurance premiums. In comparison, 33% of entrepreneurs reported that domestic events, such as SARS, mad cow disease and the August blackout had a negative effect on revenues. A similar number, 28% reported that international events, including the war in Iraq, hurt revenues. The strength of the Canadian dollar had a net negative impact on revenues for 15% of Canadian entrepreneurs. “Clearly insurance challenges impact Canadian small business more than any other domestic or international economic or political event,” said Rob Paterson, CIBC’s senior vice-president of small business banking. “Anything that impacts the profitability of Canadian entrepreneurs ultimately impacts Canadian competitiveness, and the economic prosperity of us all.” Despite the shocks that hit small businesses over the past year, the vast majority (83%) of those experiencing negative impacts on revenues don’t call into question their decision to be entrepreneurs. Surprisingly, only 11% of Canadian entrepreneurs have any specific new plans to help their business minimize future disruptions due to negative business, political or environmental events — either domestic or international. Among those who had created a business disruption plan, the preventive actions were generally identified as follows:
Although Paterson sees the bullishness on the part of entrepreneurs as positive, he stressed the importance of planning for future business hardships. “It helps smooth out the inevitable peaks and valleys of entrepreneurial life,” he noted. The poll also found that more than one in five (22%) Canadian small businesses were formed as a result of a negative change or downturn in the entrepreneur’s employment situation. While more than one in five Canadian small businesses were formed as a result of a negative change or downturn in the entrepreneur’s employment situation, many of these businesses are now thriving. 46% of the small business owners polled indicated their organization is now more successful than a year ago. Almost half (48%) of small businesses receive outsourced or contract work from other companies. Fully one in ten Canadian small businesses were created as a result of an outsourcing opportunity, providing further evidence of the downsizing/outsourcing link. Nine per cent of downsized entrepreneurs count their former employers as current business clients. The poll was based on a randomly selected sample of 1,351 Canadian small business owners (defined as including 1-15 employees including the owner and having revenues under $5 million for the year 2002). For more information visit www.cibc.com/smallbusiness. Ontario software piracy down The Canadian Alliance Against Software Theft (CAAST), an industry alliance of software publishers, released a study that places Ontario’s software piracy rate at 35.5%, the lowest rate the province has had in four years. The province’s piracy rate is almost four points below the national average of 39.4%, ranking it as the second lowest in the country after Alberta. The independent study, conducted for CAAST and the Business Software Alliance (BSA) by International Planning and Research Corp. (IPR), indicates that in 2002, Ontario lost $210 million in retail sales of business software applications due to software piracy as well as $1 billion in wage and salary losses and 13,000 jobs. “While Ontario is showing excellent progress in its fight against software piracy, the impact that software piracy continues to have on the local economy cannot be ignored,” said Jacquie Famulak, president of CAAST. “Despite having one of the lowest piracy rates in Canada, Ontario accounts for 51% of the impact of dollar losses due to piracy. As a province with a significant software industry, Ontario must continue to be diligent in preventing software piracy from becoming an even greater economic burden.” CAAST encourages businesses and consumers to be aware of the impact of such piracy and take steps to avoid the consequences, including doing the following:
For more information visit www.caast.org. High tech Scans for the road warrior Portable scanners are a remarkable thing, as I found out when I tested the TravelScan 464, a USB 2.0 compliant, 600 x 120 dpi optical resolution scanner. The whole unit, wires and all, slides easily into any briefcase or laptop carrier bag, and it comes with its own carrying case for extra protection. At 12 ounces, with no battery or power adapter required, it’s convenient and can scan documents, photos and business cards without any fuss. It comes equipped for optical character recognition as well. On a test model, the colour resolution of a scanned photo was surprisingly good, and the scanning speed was reasonably good as well — three pages per minute for black and white and one page per minute for colour scans. This may seem slow for those who use faster flatbed models, but the portability of this is what makes it attractive for road warriors. And as it’s large enough to scan an A4 size page, it’s comparatively versatile — ready to use for documents in Windows 98, ME, 2000 and XP. For more information on the product visit the Canadian distributor’s Web site at http://www.onthegodepot.com/products/details.php?i=9 or the parent company Web site at http://www.syscaninc.com/.
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