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Alberta Business Beat

Alberta Business Beat. Volume 2, June 2013. INTERNAL with notes. Background and Methodology. Background & Objectives. Background

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Alberta Business Beat

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  1. Alberta Business Beat Volume 2, June 2013 INTERNAL with notes

  2. Background and Methodology

  3. Background & Objectives Background • ATB Financial commissioned NRG Research Group to conduct a survey of 303 randomly selected small- to medium-sized businesses in Alberta each quarter, beginning in Q1-FY2014. • The purpose of the study is to gain an understanding the challenges faced by small- to 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; • Gauge the likelihood of investment plans in a number of different areas, such as investment in technology or expansion into new foreign or domestic markets; • Understand challenges for small- to medium-sized businesses with finding and retaining skilled labour, the competition impacting sales and succession planning; • Determine best advice for a small- to medium-sized business to grow their business; and, • Profile the firmographics as well as respondent demographics for small- to medium-sized businesses in Alberta.

  4. 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 • Field dates: • May 1-15, 2013 • Telephone + online option • Over 3,000 businesses contacts made and 303 completed the survey • Margin of error is +/- 5.8% • Randomly selected Alberta SME’s

  5. Key Insights

  6. Key Insights 1 Alberta business owners’ optimism higher than last quarter 2 Finding skilled labour an issue for two-thirds 3 One-third plan to exit their business in the next 5 years, yet half have no formal plan

  7. Business Confidence

  8. Optimistic about the future “HOW DO YOU THINK …………… WILL BE SIX MONTHS FROM NOW?” Your Company Alberta Economy 89% 77% +1 +2 will be better off or the same will be better off or the same (±) Change from last quarter Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  9. What’s driving the optimism? 77% Better/Same “WHY DO YOU THINK THE ALBERTA ECONOMY WILL BE BETTER SIX MONTHS FROM NOW?” Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  10. Business Growth

  11. OVER THE NEXT 24 MONTHS, DO YOU HAVE ANY PLANS TO…? “% YES” Intentional growth is paying off 73% of SMEs are intentionally trying to grow their business. 52% are seeing growth in their business as a result of their efforts. 12% are experiencing ‘organic’ growth. * New question this quarter Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  12. 3 Tips for Intentionally Growing Your Business 24% of SME owner/operators report advertising or marketing is important 19% Develop customer relationships 19% Hire and retain quality employees “GOOGLE ADVERTISING, ADVERTISING ONLINE. IN OUR BUSINESS, BEING IN FLOWERS PEOPLE WHO WANT TO SEND FLOWERS DO NOT GO TO THE YELLOW PAGES, THEY GO ONTO GOOGLE AND TYPE IN FLORISTS IN CALGARY. ” General Manager, Retail Flower Shop, 17 years in business, $500k -< $1MM in revenue. Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  13. Diving Deeper into Pain Points

  14. Challenges Finding and Hanging on to Experienced Staff

  15. Jobless rate falls in April Unemployment rate dropped to 4.4 per cent Nearly 15,000 new jobs Gains in full-time positions Source: Statistics Canada, CANSIM table 282-0087.

  16. Trouble finding & retaining skilled labour Difficultly finding 13% 67% Difficultly retaining 35% 35% Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  17. Top 5 challenges TOP 5 Challenges with FINDING Skilled Labour TOP 5 Challenges with RETAINING Skilled Labour Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  18. TROUBLE FINDING SKILLED LABOUR “They just aren’t out there. We just aren’t finding the skilled journeymen we need. ” VP, Construction Company, 5 years in operation, $1MM-$3MM in revenue. TROUBLE RETAINING SKILLED LABOUR “I can’t afford to pay what large oilfield companies pay for salaries. ” Owner/ Operator, Construction Company, 20 years in operation, < $250,000 in revenue. Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  19. Succession Planning

  20. 34% of SME owners plan on exiting their business in the next 5 years Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  21. 52% of SMEs expecting to be sold, transferred, or wound down (in the next 5 years) do NOT have a succession plan! Nearly 3 in 10 (27%) mention one of the following reasons as to why they do NOT have a succession plan: “No time to deal with the issue” “Have not thought about it” “Don’t know where to start” “It is too far in the future” “Have not decided what to do with business” Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  22. 48% of SMEs expecting to be sold, transferred, or wound down in the next 5 years (with a succession plan) expect to sell to a third party Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  23. Boomer Businesses are Booming! 29% of SME owner/operators report being 55+ years of age. 55% of Alberta SMEs owners/operators (aged 55+) do not have a succession plan. 35% of Alberta SMEs owners/operators (aged 55+), who do not have a succession plan, report having “no plans to let go of the business”. Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  24. Business Challenges with the Competition

  25. How does “the competition” impact sales & customer acquisition efforts? TOP 5 Challenges with either large or other Small Businesses “YOU’VE GOT WAL-MART AND STAPLES. PRICING OF MY PRODUCT IS A TOUGH SELL. ” Owner, IT & Computer Sales/Service, 15 years in business, < $250k in revenue. Source: ATB Financial, Survey on Alberta SMEs, May 2013, 303 respondents.

  26. Conclusions • Alberta small and mid-sized business owners remain optimistic • Finding and retaining skilled labour remains number one pain point • In the next 5-10 years, we’ll see significant ‘changing of the guard’ regarding ownership

  27. Questions?

  28. APPENDIX: Business Firmographics & Respondent Demographics

  29. Majority of Alberta SMEs earn revenues in excess of $500,000 Annual Revenues 2012 Of the SMEs we surveyed, nearly half report fewer than five employees, over six in ten (64%) report earnings in excess of $500,000 in 2012. Number of Employees Change from last quarter Source: ATB Financial, Survey on Alberta SMEs, May 2013, with 303 respondents.

  30. 73% of SMEs are TRYING to grow their business Business Firmographics Business Life Stage Phase Intentional Growth Change from last quarter Source: ATB Financial, Survey on Alberta SMEs, May 2013, with 303 respondents.

  31. Business Firmographics # of Years in Operation Borrowing Needs $1MM+ 9% MEAN 24 years Change from last quarter Source: ATB Financial, Survey on Alberta SMEs, May 2013, with 303 respondents.

  32. Business Firmographics 9% of SMEs are franchises Industry Change from last quarter Source: ATB Financial, Survey on Alberta SMEs, May 2013, with 303 respondents, responses mentioned by 3% or more are shown.

  33. 49% of SMEs only conduct business in Alberta Business Firmographics Business Location(s) Business Scope Change from last quarter Source: ATB Financial, Survey on Alberta SMEs, May 2013, with 303 respondents.

  34. Respondent Demographics Age Title/ Role 29% 55+ Change from last quarter Source: ATB Financial, Survey on Alberta SMEs, May 2013, with 303 respondents, responses mentioned by 3% or more are shown.

  35. Respondent Demographics Role in Financial Decisions Gender Change from last quarter Source: ATB Financial, Survey on Alberta SMEs, May 2013, with 303 respondents.

  36. ATB Business Beat Businessbeat@atb.com ATB.COM/businessbeat

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