Impediments to SMB Growth

Business Outlook from Bank of Canada

Innovation, Science, and Economic Development Canada released a detailed analysis on the profile of the recipients of the Canada Emergency Business Account.

The report presents a business profile of small and medium-sized enterprises that received loans from the Canada Emergency Business Account in 2020, a component of the federal government’s COVID-19 Economic Response Plan.   It provided partially forgivable interest-free loans to small businesses and not-for-profits to help finance their non-deferrable expenses.

The breadth of the database is statistically similar to the SMB community at large – giving us a unique insight into the sector. Key insights are helpful for us in managing our own businesses:

  • 38% of SMB’s reported zero or negative sales growth from 2019-2020, while 55% reported growth from 1%-20%.
  • In 2020, 33% implemented at least one new technology, and 31% implemented at least one new innovation.

The top 3 reported obstacles to growth in 2020 were:

  • Rising costs
  • Recruiting/shortage of labour
  • Retaining skilled employees

Strategic workarounds, as we see it:

  • Rising costs – diversify suppliers, optimize processes
  • Recruiting/shortage of labour – outsource to minimize labour costs
  • Retaining skilled employees – outsource to minimize labour costs



Downtown can be Turned-Around

Revitalizing Communities

We see it in almost every town: blight.

It starts innocently enough, when the first payday lender opens up on the fast food strip on the outskirts of town.  Then, it picks up momentum, when the second shop opens across the street.

Then downtown.  Then across the street from that location.  Then a rent-to-own furniture shop takes over the large former department store space. Then a pawn shop moves in.

Boom. Your downtown is now infested with predatory lenders.

They are making good money, providing loans to the poor, new immigrants, the folks with low financial literacy, and the desperate.

It’s sad to see, on a number of levels.

Because these predatory lenders are so very visible, they tend to brand a neighbourhood, effectively discouraging high customer-lifetime-value buyers (of any product or service) from visiting the area.

The next time you see a cluster of predatory lenders in an area, imagine replacing one of those storefronts with a trendy bistro, a nice clothing store, or even a Starbucks.  There’s no doubt that the image improves immensely, motivated and qualified buyers come back to the area, and commerce gets a much-needed kick start.

Can this happen?

Of course it can, but it takes determination.

Our process starts with a compassionate understanding of the folks who live in the area, who are currently the customers of the predatory lenders.  We ask:

  • Why are they using these services?
  • Do they know that alternatives exist?
  • Do they know the real cost of their decision?
  • What local services are available to increase financial literacy for the folks who use these services?
  • What kind of employment supports can we bring to bear, to either increase the number of jobs, or the number of hours worked?
  • Are there additional shelter services available?
  • Who would be interested and able to provide financial literacy training sessions?
  • Is there a local financial services provider who’d be interested in providing starter-bank accounts, so that we can help these folks enter the mainstream banking system?

There are more issues to resolve, but certainly, helping the folks who are stuck in the cycle of low income/high expense financing is a logical (and compassionate) place to start.

The next step is actually moving those predatory businesses out.

While that’s a difficult climb, it can be done, largely through a combination of helping the folks who are struggling, and by providing a sensible alternative that changes the market dynamics for the sector: ie, make the market less attractive do business in.


We provide a web-based marketplace of personal loan providers to areas that are committed to renewal, and to creating a solution.  By presenting this powerful multi-lender marketplace to the residents in the area, a few things happen:

  1. Financial literacy improves: people realize that they can save money when lenders compete for their business.
  2. They realize that they just don’t have to go to the same lenders that’ve been using in the past.
  3. Those lenders begin to lose share, and eventually move out, hopefully to be replaced by a vibrant business that attracts high customer lifetime value to the area.

Read more here.

Let’s talk:


5 Practical Steps to Manage Inflation

managing inflation

Inflation is a reality for businesses of all sizes and in all industries.

Impacts include increases in costs of raw materials, labour, transportation, and more.  Businesses of every size need to adapt and optimize their operations to stay competitive during inflationary times.

Here are a five strategies that businesses can use to optimize their operations during inflation:

  1. Diversify your revenue streams:
    • Diversifying your revenue streams can help to reduce your dependence on a single product or service and increase your resilience during inflationary times. This can include diversifying your product line, expanding into new markets, or developing new revenue streams through licensing or franchising.
  2. Increase prices:
    • Straightforward, it’s the first line of defense against rising costs.  The downside is that this approach can also lead to a decrease in demand for your products or services. It’s important to do market research to understand your customer’s willingness to pay and make sure that your prices are still competitive.
  3. Streamline operations:
    • Hunt-down and reduce waste, increase efficiency, and consider the benefit of automating expensive processes. Reducing costs will free-up internal cash, and ultimately make your business more nimble.
  4. Look for alternative suppliers:
    • Rising input prices can have a significant impact on your bottom line. To mitigate this impact is to look for alternative suppliers that can offer the same quality materials at a lower cost. This can also help to reduce your dependence on a single supplier and reduce your risk of supply chain disruptions.
  5. Invest in technology:
    • Investing in technology can help to increase efficiency, reduce costs, and improve productivity. High impact areas can include investing in automation, data analytics, and digital marketing.


Bank of Canada Business Outlook Survey – Q4 2022

Business Outlook from Bank of Canada

The Bank of Canada recently released its Q4 2022 business outlook survey, the results of which show a pretty pragmatic view of the Canadian economy, and what to expect in the months and year ahead.


  • Most businesses surveyed expect a mild recession in at least the first half of the year
  • About 30% expect sales to decline this year/70% expect sales to be about the same
  • Reasons for slowing demand correlate with the consumer survey, namely pessimism around interest rates, uneasiness about employment stability, and concern about inflation
Based on this information, what should an SMB do this year?
  • Clearly, it’s going to be a challenging year – it’s always a good time to find waste and cut it out of your operation.
  • If sales are going to be static, it might be a good time to find/develop new products/services to lock in your customers for longer commitments, and at slightly higher average spends (always focusing on providing new value)
  • If you’re one of those businesses expecting a decline in sales, now is a good time to reach out to new geographies (which might be as simple as a neighbouring town), improve your digital-service capability, and reach new prospects digitally

You may also be interested in reading:

We’ve got ideas for you that’ll make a difference for you –  set up a call, and let’s talk your situation through:

Bank of Canada Survey of Consumer Expectations – Q4 2022

Business Outlook from Bank of Canada

The BOC just released its benchmark Consumer Expectations survey from Q4, and, while the results aren’t necessarily surprising to anyone in the SMB community, they do present some opportunities.

First, the highlights:

  • Consumers have reduced purchases of discretionary items
  • Access to consumer credit has worsened, and real wage growth has declined, further pressuring households
  • Consumers are expecting a mild to moderate recession in the next year
  • While actual inflation has steadied, consumers are bracing for more to come
  • Spending on most items is reducing, largely because of inflation and general malaise in the economy

Read the whole report here.

Next: what should an SMB do about this?

  • Understand that your employees are very likely feeling this uneasiness, and respond accordingly
  • If you sell to consumers – or sell to businesses that sell to consumers – you can likely expect a hit to your sales.
  • If you are forecasting a sales decline, start thinking about sourcing new markets (we can help you here).  Think about augmented services to help you drive new revenue, selling in new territories, expanding your ecommerce capability, and trimming dead-wood products
  • Remember: consumers are cutting back, not cutting off, so stay positive, and keep an opportunity-forward perspective.

If you’d like to chat about opportunities for your business – send us a note below, and we’d be happy to talk:

There’s Always Room to Be Better

No matter how many years you’ve been in business, how many customers love you, what your financials and KPI’s indicate: you can be better.

If you disagree, I’ll invite you to visit your local Apple Store.  There, you’ll see best in class:

  • retail customer service
  • floor management processes
  • payment and receipting processes
  • upsell programs
  • staff training
  • customer loyalty

Understanding how Apple got there, and how you might adapt these inspirations will undoubtedly take you to a new level.

If you’re stuck or looking for a solution: spend half an hour with the best in class.

A New Model to Boost Productivity

workplace - scandinavian model worksheet

Spain recently announced a brave new national strategy to improve worker productivity.

The model was introduced during the pandemic, and is referred-to as the ‘Scandinavian Model’ – at its core is a belief that productivity will rise if working hours are reduced.

It’s only for full time employees, and Spain intends to – at least initially – finance the costs that companies incur related to program introduction, training, and other measures to improve productivity (presumably investments in technology as well).

Companies opting-into the program must assure a gender-representative cohort of their workplace.  Companies as small as 21 full time employees will qualify for the program (and up to 249 employees).

Apparently Spanish telecom provider Telefonica is taking the lead, and has offered its employees the opportunity to work a four-day week, extending a pilot programme that initially involved about 150 workers, but in exchange for a 12 per cent pay cut.

We think this is a great idea, and congratulate our progressive Spanish peers on developing this program.

The question is – could this work for your business? 

For more on this topic, please visit this article on EuroNews.

The Value of Mystery Shoppers

the value of mystery shoppers

Mystery shopping – the act of having someone pose as a customer, with the intent of gathering non-biased insight into the customer journey with your business – is a valuable undertaking.

The value of engaging a mystery shopper is directly related to two things:

  1. Your potential customer lifetime value (the higher the PCLV, the greater the need)
  2. The likelihood and social engagement of your customers (the higher the social engagement, the greater the need)

If you operate a business with a high PCLV, you should probably consider – at least occasionally – engaging a mystery shopper to give you insight.

If you operate a coffee shop – the chance of having highly socially engaged customers is likely high – pointing to the value of a mystery shopper even for a business with a low CLV.

If you manage a business with a high PCLV and customers with high social engagement…there’s no doubt about the value.

Here’s a real life case study:

I brought my car to a new dealer the other day for routine service, which included some diagnostic work (there was a noise in the dashboard that was increasingly concerning). Here’s how the day played-out:

  • The car was brought into service at 8:30am
  • By 11:30, I still had not heard from the shop about the level or type of repairs required – so I called, and left a message with the service receptionist
  • By 2:30, still no callback, and I began wondering: is there enough time left to complete whatever repairs are required? What exactly IS required? Why aren’t they calling back? What’s going on there? Did I make a mistake bringing the car to these guys?
  • By 4:30, I arrived, clearly annoyed at the lack of communication, but relieved that the bill wasn’t what I was expecting

In the end, I’d characterize the service delivery as a failure, and I suspect that the dealership would too.

For the owner of the dealership, the service management equation (at least for this customer) is:

  • = High PCLV (car repairs + periodic replacement car purchases) x socially engaged customer

Most people would agree that not returning telephone calls is a blatant service-quality misfire, but the question arises: ‘how often does this happen?’

A mystery shopper solves two things:

  1. It shines a light on service-improvement opportunities – big or small
  2. It keeps management and staff ‘on their toes’, and aware that the organization takes service delivery seriously, and links service delivery with business sustainability.


Canada Small Business Financing Program

Canadian Small Business Loan Program

From the CRA site:

The Canada Small Business Financing Program makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders.

Term loans can be used to finance the following costs:

  • purchase or improvement of land or buildings used for commercial purposes
  • purchase or improvement of new or used equipment
  • purchase of new or existing leasehold improvements, that is, renovations to a leased property by a tenant
  • intangible assets and working capital costs

Lines of credit can be used to pay for working capital costs, that is, day-to-day operating expenses of the business.

The maximum loan amount for any one borrower is $1.15 million.”

As an SMB owner, this sounds terrific, doesn’t it? …not so fast.

There’s a link on that page, entitled Toolbox for Lenders, that specifies qualification criteria.

Net: if you can’t qualify for a bank loan on your own, this program is unlikely to help you.

Talk to us: we can help provide the interim financing you need.

Bank Loan Loss Provisions Up

loan loss provisions

In this morning’s Globe and Mail, James Bradshaw reports ‘Scotiabank’s fourth-quarter profit slips on higher costs, increased loan-loss provisions.’

In his report, Bradshaw notes that “Provisions for credit losses spiked from ultralow levels last year”.  He goes on to note that “Scotiabank continued to face pressure on its profit margin on loans, with its net interest margin down four basis points”.

So what does this mean for SMB’s access to capital going ahead (even if you don’t bank with Scotia)?  We see at least the following key issues:

  1. Your rates will likely be going up on your next renewal
  2. It may be tougher to qualify for a loan
  3. If you don’t have your ‘ducks in a row’, you can expect to pay even more (see how we can help you)

Let’s talk about your financing requirements, and how we can help: