“WHAT’S YOUR BANK DOING FOR CANADA’S SMEs?”
Enterprise Magazine wanted to know what our banks are doing to help Canada’s SMEs during these tough economic times. So we posed the above question to our top five banks—four responded. The following outlines some of their products/services designed to provide assistance.
BMO Financial Group
LOOK TO YOUR BANK TO HELP YOUR SMALL BUSINESS THRIVE
Of the nearly 140,000 new small businesses opening each year, about 30 per cent will collapse within 12 months and only half will survive more than three years, according to Statistics Canada. Soaring energy prices, higher transportation and shipping costs, and rising commodity prices are adding fuel to the fire creating new challenges for small business owners.
As gloomy as this picture is, most business owners are optimistic by nature. In fact, a recent Harris/Decima report commissioned by BMO Bank of Montreal showed that 92 per cent of small business owners believe they can withstand financial difficulties and almost two-thirds are so confident, they have no contingency plan in place in the event of an economic downturn.
A complete and detailed contingency plan should be of paramount importance, particularly in times of economic volatility. These plans can include specific strategies to deal with critical situations or sudden changes, such as new industry legislation, market downturn, new industry players, currency fluctuation, and commodity price changes.
Small business owners should seek advice on how to develop a contingency plan that is best suited to their business needs. A good plan should consider a number of scenarios and include a strategy on how to put the plan into action quickly and efficiently.
A good place to start is with a commercial banker who can tap into the vast resources and expertise of the bank, while bringing insight and awareness of local issues that may impact your business. They are uniquely positioned to understand the specific challenges facing small businesses and can become a valuable partner by responding immediately to your needs. With the best interest of you and your business in mind, they can provide informed advice to small business owners, even those just starting up.
Your banker can also be the source of valuable business expertise whether you are starting out or looking for advice on how to expand your business. They can coach you on how to better manage cash flow and provide tips on how to reduce the time it takes to obtain receivables and control business expenses.
In addition, BMO has made it easy for time-pressed small business owners to access information with the launch of the Business Coach Podcast series. This series of audio information segments aims to provide advice to Canada’s entrepreneurs. The podcasts offer up experts in a variety of fields who provide credible information to help small businesses run better. The ongoing series has explored many topics including working with advisory boards, economic forecasts, government funding, and secrets of Canada’s most successful entrepreneurs, to name a few. The podcasts are free and easily accessible at www.bmo.com.
Many simple, and flexible financing solutions have been developed with the unique borrowing needs of small businesses in mind including lines of credit, instalment loans and home equity products, such as BMO’s Small Business Homeowners ReadiLine, which rolls your mortgage and line of credit into one. For example, this product offers the benefit of flexibility and choice by allowing you to apply the equity in your home to your day-to-day operating needs, as well as your long-term financing needs. Moreover, you have the option to lock down any portion of your mortgage at a fixed or variable rate keeping you in control of the cost.
Small business owners should also look for banking plans with special features exclusively for entrepreneurial ventures, such as start-up packages for new businesses that waive costs like plan fees.
With the economy in a state of fluctuation, the most important thing you can do is plan ahead. Being prepared is the best way to ensure your small business stays afloat during challenging times.
Don Wither is National Director in the department of Strategic Business Solutions at BMO Bank of Montreal, based in Toronto.
RBC
FINDING SMALL BUSINESS SUCCESS
As any small business owner can tell you, certain aspects of running a business hold true, no matter what is happening in the marketplace.
One constant is that, as a small business owner, you cannot expect to grow or even maintain the business opportunities you have now, if you are not continuously assessing what you are offering to your customers to see if you are meeting their needs. You always have to give consumers a reason to come through your doorway—whether that doorway leads into a home office, a warehouse, an office building, or a website.
When you are working within a more challenging economic environment, there is even more reason to take a good, hard look at your business and what makes you different from your competitors.
Gaining Strengths From Weaknesses, Opportunities From Threats
With paper and pen (or computer and keyboard), you can readily assess your business’ strengths, weaknesses, opportunities, and threats (SWOT) by doing your own SWOT analysis. This is designed to help you uncover the factors that can help or hinder you in achieving a specific business objective. A SWOT is fast, inexpensive, and helps you focus on your vision and objectives.
Perhaps not all of the key elements included in the chart below relate to your specific business—you can simply select the ones that do apply to you.
Next, write down your business objectives for the next
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Strengths What do you do especially well? What resources do you have, or services and products do you offer, that other businesses do not have? Do you have any other competitive advantages? |
Weaknesses What do you not do very well? What activities take away from what you do best? Where do you think you can improve? |
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Opportunities What opportunities currently exist in your business? What trends are influencing your business, your industry? are you going to be affected by any changes that may be occurring in your industry’s regulatory environment? What changes are occurring in technology related to your industry? are there demographic changes occurring that you should consider? |
Threats What obstacles do you face? What are your competitors doing and how might it affect you? are there any planned regulatory changes? Do you have the cash available to meet present needs? can you maintain service levels or will you need to increase staff? |
year. Use your SWOT findings from the chart above to determine how you can use your strengths, avoid your weaknesses, exploit each opportunity, and defend against each threat.
SWOT analysis works best if you do it as an ongoing exercise. Review your business regularly, track your progress, and make any adjustments you need along the way.
Check Out Easily-Accessible Online Resources
Small business owners often start up businesses based on a deep personal passion for their work. They bring their own special talents to the products and services they offer to consumers—talents that often lie in directions far removed from taking care of the many “paperwork” details that often take up so much of a working day.
Small business owners can make a big difference in “filling in the gaps” of their own skills, by having ready access to relevant resources. That’s where the expertise of larger organizations comes into play.
RBC has posted a wealth of useful information and resource materials on its small business website, and even has a website totally dedicated to providing advice on key aspects of starting up and growing a business, no matter what the economic climate: www.rbc.com/tips.
Some of the topics covered on the site include:
- What it takes to be your own boss
- Calculating your business start-up costs
- Matching financing to your needs
- Making sense of taxes
- Opening a business deposits account
New tips are being added throughout the year, to create a comprehensive advice archive for Canadian entrepreneurs. People who visit the site also have the opportunity to submit tips of their own—the website is an interactive meeting place, where small business owners and aspiring entrepreneurs can share and learn from the real life experiences of others.
For small business owners who want resources they can thumb through and highlight for themselves, RBC also provides a free series of guidebooks through the website, including:
- Starting a Business
- Growing Your Business
- Personal Financial Management for Business Owners
- Succession Planning for Your Small Business
RBC’s goal is to make it as easy as possible for people to find out what they need to know to get started, and to grow their businesses. For more information about how an RBC Small Business advisor can help you and your business—or to obtain copies of any of RBC’s free advice booklets—drop by the nearest RBC Royal Bank branch, or call 1-800-ROYAL-20 (769-2520), or visit www.rbcroyalbank.com.
Rina Pillitteri is National Director, RBC Small Business
Scotiabank
Scotiabank Takes To The Road With Small Business Tools, Expertise
At Scotiabank, we understand that small business owners have a lot on their plate. We know, from talking to our customers, that small businesses across Canada face an increasing number of challenges—as broad as changes in the economic environment or as fundamental as the search for a better work-life balance. We also know that growing a business is both a priority and a struggle for small business owners. Where do they find the time or the cash flow? Where do they obtain affordable sales and marketing advice? While we have been providing advice and services to small businesses for years, we recognize that owners often do not have time to attend seminars, or even time to set up meetings with their banker. So, we decided to go to them.
Tools And Resources
In June, we launched a five-month cross-country tour to deliver Scotiabank’s Small Business Banking tools, experts, and services to small businesses. The tour is part of the Bank’s ‘Get Growing to a Million’ campaign to help small business owners identify strategies to grow their businesses. Our goal is to help our small business clients come up with simple, straightforward strategies that can be executed within a short period of time, to grow their business to the next level—maybe their first million. Maybe their next million.
We are literally traveling across the country, town-to-town, in a specially equipped RV, meeting with small business owners to understand and work through their unique opportunities and challenges. From meeting on the RV, to rolling up to the doorsteps of small businesses, we are on a mission to get to know small business owners right across the country. Our research and experience shows us that small business truly is the heartbeat of local and provincial economies.
As we stop in dozens of communities, we are giving local small business owners an opportunity to test drive Scotiabank’s Small Business tools, visit the new ‘Get Growing for business’ website (getgrowingforbusiness.com), as well as discuss their growth plans with a Scotiabank Small Business advisor.
Planning Is Key
Our experience with small business owners suggests the most successful entrepreneurs are those who have effectively planned their business concept, from market research and human resources planning, to cash flow forecasts. Writing a business plan is key to ensuring that a business vision is well thought out. A plan provides a framework for success in a format that allows owners to discuss it with their advisors. The Scotia Plan Writer™ for business is a free and interactive online tool that helps new and established small business owners through the process of writing, organizing, and using a business plan. Whether starting a new business or expanding an existing one, our innovative tool gives entrepreneurs a step-by-step guide to putting their ideas on paper so that they can achieve their business goals.
A good business plan is a powerful tool, whether a small business owner is applying for financing, creating a management roadmap, or communicating goals to business partners and employees. A solid plan that is regularly updated is also instrumental in helping mitigate risks, understand customer needs, plan for growth, and outline a solid sales and marketing strategy.
A Team Of Advisors
At Scotiabank, we understand that entrepreneurs are often time-challenged individuals who wear many hats: chief financial officer, human resources officer, marketing officer, and CEO. They must have a level of awareness and expertise about all aspects of their business. This is why, in addition to a good business plan, it is important to be surrounded by the right advisory team.
Our Small Business advisors have the business planning, financial, diagnostic, and check-up tools to help. In every Scotiabank branch across Canada, we have the expertise and training to help our small business clients manage all aspects of their business and, at the same time, identity growth opportunities.
Many of these resources are also available on Scotiabank’s new website designed especially for small business owners (getgrowingforbusiness.com). The website is both an interactive community for small business owners as well as an online resource centre with a full suite of interactive business-building tools. And it’s available 24/7 for the convenience of entrepreneurs.
Whether on our website (getgrowingforbusiness.com) or through 1,600 small business bankers in our branches, we provide tools, resources, and expertise to support the three pillars of growth: sales and marketing, building operations, and managing money.
Our core purpose at Scotiabank is to help people become better of financially—and the role of Scotiabank Small Business Advisors is to deliver financial products and services to help our small business customers grow and prosper. Ultimately, the programs and services that we support across Canada and around the world help to make our communities richer—and that’s a great feeling and an important part of what we do.
Kyle McNamara is Managing Director, Small Business Banking, Scotiabank
Canada Trust
Is Your Company Prepared For Economic Shifts?
The Canadian economy is facing some challenges. Is your company prepared?
Slowing economic growth, high prices for commodities, rising inflation, and a host of other factors have combined to make 2008 a challenging year for businesses.
In this environment, companies must be ready to change gears to navigate through everything from rising costs to changing customer preferences.
TD Canada Trust Business Banking provides guidance on some of the essentials for surviving and prospering in a changing economy.
Assess Business Strategy
Business strategies that work during an economic boom may not be as effective in times of slowing growth and rising costs. Determine where your business is most vulnerable, and focus your strategic efforts on those areas.
But do not focus only on today. As part of your strategic thinking, look for opportunities to become leaner, more efficient, and more cost-effective. This will make your company more competitive when the economy recovers.
Review Your Product Line
Are your core products and services a good fit with the current economic environment? As customer preferences change, consider eliminating unprofitable products or services and adding to product lines in other areas.
Deal With Rising Prices
Slowing economies and higher input prices do not always go hand in hand. But global growth is causing inflation (in the form of higher prices for oil, agricultural products, and materials) at a time when North American economies are slumping. In this scenario, it can be difficult to pass along price increases to your consumers. Determine if your company has “pricing power” and compare what your competitors are charging.
Cut Your Costs
One way of dealing with rising input prices is to cut production and other costs. But be careful. A company can reduce capacity so much that it will not be in a position to capitalize on the next upturn. And if you cut in other areas, such as product development, this can also hurt your competitive position in the future.
Improving efficiency may be a better way to pare expenses. Also, consider substitutes for high-cost materials, or seek out suppliers that offer more attractive prices. Think about deferring non-essential items such as conference activities and non-critical training programs.
Watch The Competition
Don’t forget that your company’s competitors are in the same boat. That’s why it’s important to maintain your company’s strengths. Consider investing where competitors are cutting back. And if the business is in a position to expand, buying other companies is cheaper in a downturn. You can also hire valuable personnel when a slowdown creates a buyer’s market for talent.
Reach Out To Customers
In more challenging times, a close relationship with customers pays off. Know what is important to your best customers and be prepared to focus on how you can provide products and solutions they need.
Visit www.tdcanadatrust.com/smallbusiness for more information.