Recession? Entrepreneurs barely noticed

You may have noticed that your small business-owner clients have remained upbeat during the recession — and you probably weren’t alone. It turns out that less than half of small businesses felt a negative impact from the downturn, according to a poll by RBC.

Only 36% of entrepreneurs said the recession had a negative impact on business. Among that group, 72% said sales revenue declined, while 54% said there were fewer business opportunities.

Meanwhile 56% said the recession had either no impact or a positive impact on their business.

And while 58% said the economy is not out of the woods yet, the majority of entrepreneurs (72%) are optimistic about their company’s prospects for the coming year. In fact 23% said they will be adding staff in 2011.

“Small business owners feel as though they have weathered the storm well, but are still prudently approaching the future by reviewing their business plans and assessing their financing options,” says Mike Michell, national director, small business with RBC.

“Accessing sound financial advice can help in setting realistic goals and ensuring the right financial support is in place during an economic downturn,” he adds.

For advisors prospecting for more entrepreneur clients, there are some trends to keep an eye on.

Entrepreneurship is rising among women, who now make up 52% of this market segment, up from 48% in 2005. The highest concentrations of women business owners were in British Columbia and the Prairies, where women accounted for 58% of entrepreneurs.

One negative trend suggests there are fewer young people starting businesses, as people aged 18 to 34 make up just 7% of entrepreneurs, down from 15% in 2005. Most entrepreneurs (53%) are over the age of 55, compared to 39% in 2005.

When asked what they would do differently if they were starting their business today, the most common responses were:

• do more networking (73%); • solicit clients more aggressively (67%); • seek more advice (66%); • start their business at a younger age (60%); • develop a better business plan (54%).

An increasing percentage started their businesses after prior professional experience, with professionals now making up 26% of business owners, compared to 18% in 2007.

Ontario was home to the largest percentage of business owner professionals, at 32%.

(10/14/10)