Transcript Alberta Business Beat

Alberta Business Beat
Volume 5, April 2014
1
Background and Methodology
2
Background & Objectives
Background
• ATB Financial commissioned NRG Research Group to conduct a survey of 300 randomly
selected small- to medium-sized businesses in Alberta each quarter, beginning in Q1
2013.
• The purpose of these studies is to gain an understanding the challenges faced by smallto medium-sized businesses in Alberta, and to track confidence in the business climate in
Alberta.
Research Objectives
» Measure business owners and managers’ perceptions of the current business
climate compared with six months ago, as well as their assessments of what the
business climate will be like six months from now;
» Understand the need of cash flow management and the habits and tools business
owners use to maintain an understanding of their company’s financial management.
» Explore gender differences when it comes to managing their business, cash flow
management and future investment plans; and,
» Profile the firmographics as well as respondent demographics for small- to mediumsized businesses in Alberta.
Business & Agriculture
3
Methodology
Qualifying
Businesses
< 500 employees
<$20 million
annual revenues
Must be financial
decision makers or
influencers
•Excluded agriculture,
government, financial
institutions, media,
market research, PR,
advertising and
communications
sectors
• Alberta SME’s
Field dates:
Mar 19 - Apr 1, 2014
• Telephone
• Over 3,000 businesses
contacts made and 300
completed the survey
• An oversample of 100
female entrepreneurs
were added for all
gender comparisons
• Margin of error is +/5.8%
Business & Agriculture
4
Key Insights
1
ATB – Business Optimism Index grew again this
quarter to reach a new record!
2
Majority of small businesses do not prepare cash
flow projections, but are impacted by seasonal
cash flows.
Female entrepreneurs generally approach
business in similar ways to their male
counterparts; although there are some subtle
differences.
3
Business & Agriculture
5
Business Confidence
6
A very optimistic future
“How do you think… will be six months from now?”
46%
better/
somewhat
better
88% MALE
Alberta
Economy
Your Company
89%
95%
+5
will be better off or the
same
will be better off or the
same
96% MALE
94% FEMALE
91% FEMALE
65%
better/
somewhat
better
50%
better/
somewhat
better
Business & Agriculture
+2
54%
better/
somewhat
better
(±) Change from last quarter
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014, 300 respondents.
7
Cash Flow Management
8
What are the main issues SMEs
face with their cash flow
management?
Accounts Receivables being paid on time
24%
Access/ availability of cash flow
19%
Increasing sales/ client acquisition
12%
Timely & organized financial
administration
7%
Government bureaucracy (ex, taxes)
7%
Seasonal nature of the business
6%
Rising overhead costs
6%
Banking (securing credit/loans)
“TIMING FOR THE
RECEIVABLES AND
PAYABLES. CUSTOMERS ARE
TAKING 45-50 DAYS TO PAY.
SO IT IS HARD TO PAY THE
PAYABLES, WHEN THE
RECEIVABLES ARE NOT
COMING IN QUICK ENOUGH.
Vice President,
Retail Trade,
38 years in business,
20-50 employees,
$3M to $5M in revenues.
”
5%
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among those who report having a main issue
with their business’ cash flow management (n= 216; DKs removed); responses mentioned by 5% or more are
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HOW DO YOU MANAGE
THROUGH IT?
Seasonality impacting cash flow
Budget during busy season to
manage low season
63% of SMEs report
seasonality affects
their cash flows.
Industries that appear most
impacted by seasonality include:
• Retail Trade,
• Construction,
• Automotive &
• Arts/Entertainment &
Recreation.
52%
Use savings/ cash reserves
15%
Layoffs/ cut staffing
11%
Keep overhead costs low
10%
Offer more promotions/
incentives/ advertising
6%
Line of credit
4%
Use slow period to plan ahead
for busy season
3%
Nothing
6%
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among those who report
seasonality affects their cash flows (n= 190 ); responses mentioned by 3% or more are shown.
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Less than half of all SMEs prepare cash
flow projections.
“OVER WHAT TIME PERIOD DO YOU FORECAST
YOUR CASH FLOWS?”
42% of SMEs
prepare cash flow
projections.
1 month or less
22%
3 months (1 quarter)
SMEs in the Start-up (100%) or
Expansion Phases (56%) are the
most likely to be forecasting their
cash flows.
6 months
19%
8%
12 months
Other
49%
40%
11%
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among those whose businesses prepare cash flow projections
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How often are cash flow projections
revised?
Weekly/ bi-monthly (2x
per month)
9%
Monthly
25%
Quarterly/ semi-annually
(2x per year)
31%
Annually
Other
22%
13%
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among those whose businesses prepare cash flow projections
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What tool(s) are being used for cash flow
management?
Basic accounting software
(eg, QuickBooks/ Simply
Accounting)
48%
Excel spreadsheets
25%
Custom in-house software
Other
19%
8%
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among those whose businesses prepare cash flow projections
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Who is responsible for developing the cash
flow projections?
41%
Owner/ Operator
91% of the cash flow
forecasts are being done
in-house (versus 9%
who use outside help).
Chief Executive Officer (CEO) or
President
13%
General Manager (GM) or Office
Manager
12%
Accountant
12%
Controller
10%
Chief Financial Officer (CFO)
5%
Managing Director, Senior Director or
Director
4%
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among those whose businesses prepare
cash flow projections (n=126); responses mentioned by 4% or more are shown.
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Who is responsible for the day-to-day
management of your cash flow or position?
40%
Owner/ Operator
General Manager (GM) or Office
Manager
Chief Executive Officer (CEO) or
President
19%
10%
Chief Financial Officer (CFO)
8%
Controller
8%
Accountant
7%
Senior Manager or Manager
6%
Administrator
4%
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among those whose businesses prepare
cash flow projections (n=126); responses mentioned by 4% or more are shown.
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How often is the cash balance or position
being monitored?
Daily/ several times per week
42%
Weekly/ several times per
month
29%
Monthly
Quarterly or less frequently
23%
6%
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among those whose businesses prepare cash flow projections
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Female vs Male Entrepreneurs
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Just how different are women and men
entrepreneurs? (Summary)
MALE
“THEY ARE
MORE LIKELY
TO…”
FEMALE
Own/operate a small business with 5 to 49
employees (50% vs. 34% females).
Own/operate a micro-business with 0 to 4
employees (57% vs. 43% males).
Spend most of their time managing their
business’ operations (33% vs. 21% females).
Be more optimistic about their company’s future
(65% ‘much/somewhat better off’ vs. 54%
males).
Consider the most important aspect of running
their business to be operations (18% vs. 8%
females).
Spend most of their time with strategy/future
planning (10% vs. 4% males), accounting (10%
vs. 4% males) and administration (8% vs. 2%
males).
Have the most difficulty with human resources & Consider the most important aspect of running
labour (34% vs. 23% females) and sales &
their business to be the strategy/future planning
customer acquisition (16% vs. 9%).
(17% vs. 9% males).
Have plans for purchasing new equipment or
Have the most difficulty with financing & cash
machinery (63% vs. 53% females) or purchase
flow (13% vs. 6% males) and marketing,
or build
new&commercial
advertising & PR (13% vs. 7% males).
Business
Agriculture real estate (20% vs.
13% females).
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among female (n=219) and male (n=181)
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Just how different are women and men
entrepreneurs? (Summary) (cont’d)
MALE
“THEY ARE
MORE LIKELY
TO…”
FEMALE
Plan to spend a greater portion of their capital
investment in Alberta (95% vs. 88% females).
Have plans for investing in IT (46% vs. 36%
males) or commercialize new products/services
(38% vs. 28% males).
Have an older business (mean 25 years in
operation vs. 19 years females).
Plan to spend a greater portion of their capital
investment in other parts of Canada (8% vs. 3%
males)
Have a business in the mature phase (22% vs.
8% females).
Have a business in the start-up (8% vs. 1%
males) or initial growth phases (13% vs. 5%
males).
Be in the energy or oil & gas (19% vs. 9%
females) or construction (13% vs. 6% females)
industries.
Be in the health care & social assistance (13%
vs. 2% males) or education (6% vs. 2% males)
sectors.
Be located/ have locations in a rural area (23%
vs. 15% females).
Be located/ have locations in an urban area
(55% vs. 45% males).
Business
Agriculture
Have
a store& front
(57% vs. 47% female).
Not have a store front (53% vs. 43% males).
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among female (n=219) and male (n=181)
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Just how different are women and men
entrepreneurs? (Summary) (cont’d)
MALE
“THEY ARE
MORE LIKELY
TO…”
FEMALE
Have annual revenues less than $1M (65% vs.
45% males).
Be younger (45% ‘18 to 44’ vs. 25% males).
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among female (n=219) and male (n=181)
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Just how different are women and men
DEMOGRAPHICS
entrepreneurs?
MALE
FEMALE
Age
18 to 34 (9%)
35 to 44 (16%)
45 to 54 (31%)
55 to 64 (31%)
65 or older (13%)
18 to 34 (14%)
35 to 44 (30%)
45 to 54 (34%)
55 to 64 (17%)
65 or older (5%)
Decision maker
Sole decision-maker (48%)
Shared responsibility
(45%)
Influencer (7%)
Sole decision-maker (39%)
Shared responsibility
(46%)
Influencer (15%)
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among female (n=219) and male (n=181)
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Just how different are women and men
FIRMOGRAPHICS
entrepreneurs? (cont’d)
MALE
FEMALE
Number of employees
0 to 4 (43%)
5 to 49 (50%)
50-499 (7%)
0 to 4 (39%)
5 to 49 (46%)
50-499 (15%)
Number o f years in operation in Alberta
25 years (mean)
19 years (mean)
Intentionally trying to grow their
business
75%
81%
Business life stage
Start-up (1%)
Initial growth (5%)
Established (44%)
Expansion (17%)
Mature (22%)
Winding down (11%)
Start-up (8%)
Initial growth (13%)
Established (44%)
Expansion (22%)
Mature (8%)
Winding down (5%)
Have a store front
Yes (57%)
No (43%)
Yes (47%)
No (53%)
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among female (n=219) and male (n=181)
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Just how different are women and men
FIRMOGRAPHICS
entrepreneurs? (cont’d)
MALE
FEMALE
Main industry (4% or greater)
Retail Trade (20%)
Energy or Oil & Gas (19%)
Construction (13%)
Manufacturing (7%)
Prof, Scientific, Tech (6%)
Automotive (4%)
Transport & Warehouse
(4%)
Retail Trade (14%)
Health Care & Soc Asst
(13%)
Energy or Oil & Gas (9%)
Prof, Scientific, Tech (8%)
Construction (6%)
Education (6%)
Manufacturing (6%)
Arts, Entertain & Rec (5%)
Transport & Warehouse
(5%)
Hospitality/ Restaurant
(4%)
Wholesale Trade (4%)
Business locations
Urban area (45%)
Rural area (23%)
Both (32%)
Urban area (56%)
Rural area (15%)
Both (29%)
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among female (n=219) and male (n=181)
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Just how different are women and men
FIRMOGRAPHICS
entrepreneurs? (cont’d)
MALE
FEMALE
Markets serviced
Within Alberta (99%)
Other Canada (48%)
US (22%)
International (12%)
Within Alberta (99%)
Other Canada (55%)
US (25%)
International (17%)
Revenues
<$250k (11%)
$250k-<$500k (16%)
$500k-<$1M (19%)
$1M-<$3M (25%)
$3M-<$10M (21%)
$10M+ (10%)
<$250k (37%)
$250k-<$500k (13%)
$500k-<$1M (15%)
$1M-<$3M (15%)
$3M-<$10M (12%)
$10M+ (8%)
Typical Borrowing Needs
None (51%)
Less than $1M (40%)
$1M+ (9%)
None (57%)
Less than $1M (37%)
$1M+ (6%)
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014; among female (n=219) and male (n=181)
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APPENDIX: Firmographics & Respondent
Demographics
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Half of Alberta SMEs earn revenues in
excess of $1,000,000 Annual Revenues 2013
10%
18%
< $250k
Number of Employees
19%
8%
45%
$250-500k
13%
$500k-<$1MM
0 to 4 'Micro'
$1-<$3MM
5 to 49 'Small'
$3-<$10MM
22%
50 to 499 'Med'
19%
$10MM+
46%
89% of revenues comes from within Alberta;
7% from other parts of Canada;
2% from the US; and
2% Internationally (outside Canada/US).
Business & Agriculture
Change from last quarter
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014, with 300
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72% of SMEs are
TRYING to grow
their business
Business Firmographics
Business Life Stage
Phase
Start-up
Initial Growth
1%
Intentional Growth
53%
6%
48%
Established
Expansion
18%
Mature
18%
Winding Down
Intentional
Growth
10%
Organic Growth
No Growth, but
Trying
No Growth, NOT
Trying
14%
20%
13%
Change from last quarter
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Dec 2013, with 300
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Business Firmographics
# of Years in Operation
Borrowing Needs
No borrowing
needs
54%
Less than $1MM
$1 to < $3MM
$3 to < $10MM
$10MM+
Don't
know/Refused
Business & Agriculture
34%
Less than 5 years
6 to 10 years
MEAN
8%
26 years
13%
6%
1%
1%
4%
$1MM
+
11 to 15 years
8%
16 to 20 years
Over 20 years
17%
14%
48%
Change from last quarter
Source: ATB Financial, Survey on Alberta SMEs, Jan 2014, with 300
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Business Firmographics
11% of SMEs
are franchises
Industry
Energy/ Oil & Gas
17%
Retail Trade
17%
Retail
9
Food Services
6
Automotive
4
7%
Health
2
7%
Travel, Leisure &
Accommodation
2
Energy/ Oil & Gas Services
1
Construction
Manufacturing
Health Care & Social…
Prof, Sci & Tech
Franchise Industry (n=32)
11%
6%
Transp/ Warehouse
4%
Financial Services/ Insurance
1
Automotive
4%
Advertising & Printing
1
Arts, Entertain & Rec
4%
Non-profit
1
Other
5
Business & Agriculture
Change from last quarter
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Source: ATB Financial, Survey on Alberta SMEs, Mar 2014, with 300 respondents, responses mentioned by 4% or more are shown.
51% of SMEs
only conduct
business in
Alberta
Business Firmographics
Business
Location(s)
Business Scope
21%
Within Alberta
46%
99%
In other parts of
Canada
47%
33%
In the US
21%
Urban area(s) only
Both urban and rural areas
Rural area(s) only
Business & Agriculture
In international markets
outside of Canada or
the US
12%
Change from last quarter
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014, with 300 respondents.
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Business Firmographics
Does your business have a store front?
Yes
56%
No
Business & Agriculture
44%
Change from last quarter
Source: ATB Financial, Survey on Alberta SMEs, Dec 2013, with 300 respondents.
31
Respondent Demographics
38%
Age
Title/ Role
56%
Owner/ Operator
General Manager (GM) or
Office Manager
Chief Executive Officer
(CEO) or President
Senior Manager or Manager
Managing Director, Senior
Director or Director
18-34
55+
10%
19%
13%
8%
35 to 44
18%
45 to 54
34%
6%
Chief Financial Officer
(CFO)
4%
Controller
3%
Accountant
3%
55 to 64
65+
27%
11%
Change from last quarter
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014, with 300 respondents, responses mentioned by 3% or more are shown.
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Respondent Demographics
Role in Financial
Decisions
Gender
11%
37%
Female
40%
Male
60%
52%
Sole decision-maker
Shares responsibility
Influences decisions
Change from last quarter
Business & Agriculture
Source: ATB Financial, Survey on Alberta SMEs, Mar 2014, with 300 respondents.
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Judy Duncan
Director Marketing,
B&Ag
(403) 974-6884
[email protected]
Cody Tousignant
Senior Research Manager
Customer Insights
(403) 731-3507
[email protected]
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