Canadian Entrepreneurs' Needs and Challenges: 2023 Outlook (BDC Capital)

Summary

• A majority of SMEs (75%) felt comfortable with their current debt levels, while 54% stated their debt level stayed the same compared to last year.p.6
• Rising interest rates negatively impacted sales for 43% of SMEs currently, and 55% expected a negative impact on sales over the next 12 months.p.16
• Overall, 69% of SMEs stated they were prepared to face an economic slowdown or recession.p.19
• Rising costs (47%), an economic slowdown or recession (40%), and economic uncertainty (35%) were cited as the top external challenges for the next 12 months.p.24
• A majority of entrepreneurs (52%) felt that the worst of the inflationary context was yet to come.p.26

Key insights

1. Debt repayment limited business activities, growth, or borrowing capacity for 36% of surveyed SMEs.p.18
2. To limit the impact of an economic slowdown, 31% of SMEs planned to reduce losses or waste and 28% planned to increase productivity or reduce debt levels.p.20
3. Focus on growth projects and market expansion dropped from 66% in September 2021 to 38% in October 2022.p.22
4. Controlling costs was the primary internal obstacle forecasted for the next 12 months, cited by 34% of respondents.p.23
5. Among businesses facing rising costs, energy (51%), interest rates (39%), and salaries (38%) were the top drivers.p.25