Small businesses resilient through recession
By Sara Bedal | February 1, 2011
It pays to be small — at least during a recession. A recent report on small businesses and the labour market shows that Canadian small- and medium-sized businesses (SMEs) weathered the recession better relative to large firms in the private sector.
The report by RBC Economics found that private SMEs with fewer than 300 employees were not only better able to cope with the effects of the recession and but that they have been quicker to recover than larger private enterprises. In addition, businesses that depend on the U.S. export market had a more difficult time than those more focused on the domestic market, which was not hit as hard by the recession.
"During difficult economic times, businesses often find themselves laying off workers and stalling their hiring initiatives," says Mike Michell, director of small business at RBC. "However, private-sector SMEs appear to have created business strategies that have ultimately helped them come out of the downturn relatively unscathed."
Overall, employment at private SMEs fell 4.2 per cent during the recession compared to 5.5 per cent for larger private firms.
Entrepreneurs and small business owners also have another reason to smile. In December, the Business Development Bank of Canada (BDC) and the Department of Foreign Affairs and International Trade signed a memorandum of understanding that will help Canadian businesses seize global opportunities.
Says BDC president and CEO Jean-René Halde: "This memorandum of understanding will enable BDC clients to benefit from improved access to expert advice when preparing marketing and sales strategies, including export market implementation, as well as business coaching and innovation planning."
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