Home : Reports and Publications : Audit & Evaluation : Canada Business Service Centres in Western Canada: Evaluation Report 2002
Canadian Business Service Centres
in Western Canada:
Evaluation Report 2002
3.2 SME Business Sector
A small business is generally defined by having fewer than 50 employees (or, in the manufacturing sector, 100 employees). Medium-sized enterprises are similarly defined by number of staff (between 50 and 499). Together these firms make up the SME (small and medium-sized enterprise) business sector. Approximately 359,938 SMEs were operating in the four western provinces during 1998. According to StatsCan's report, 1983 - 1998 Employment Dynamics (2001), they constitute 99% of the total number of businesses in western Canada (Figure 7).
Figure 7: Proportion of SMEs in Western Provinces (1998)
In 1998, SMEs were credited with creating between 60% (Alberta) and 100% (Saskatchewan) of all new jobs. Total employment share appears to be growing (Table 5).
Table 5: SME Share of Total Employment in Western Provinces (1991 and 1998)
|
BC
|
AB
|
SK
|
MB
|
Canada
|
|
| 1991 SME employment (%) |
57.2
|
56.0
|
59.0
|
51.0
|
55.8
|
| 1998 SME employment (%) |
58.8
|
59.0
|
60.0
|
54.0
|
58.0
|
Source: StatsCan, 1983 - 1998 Employment Dynamics (2001)
The Institute surveyed the SME business sector in the four western provinces for the purpose of assessing issues of relevance and alternatives. Responses from firms which had never used CBSC services or products provide an insight into the market for business information, and suggest additional options for program design and delivery. The profile of these potential clients indicates that the majority are small businesses (Figure 8). Most of the survey respondents were currently active with an established business.
Figure 8: Profile of Respondents - Potential Client Survey
SMEs responding from across Canada to a poll of its members taken by the Canadian Federation of Independent Business (CFIB) reported that the majority (52%) started from scratch, and that less than 20% were inherited family businesses (CFIB 2001). They tended to locate in small towns, suburban areas and cities, although a significant number are situated in rural areas (Figure 9).
Figure 9: Location of SMEs in Western Provinces (CFIB 2001)
SME survival rates in the prairie and BC regions have been estimated by StatsCan for both 'micro' and small businesses (Figure 10). The data are based on firms that entered the market over the 1984-1995 period; the longest-observable age was therefore 11 years. Approximately 50% of the micro businesses (fewer than five employees) were still operating after three years. Small businesses (five to 99 employees) survive about twice as long, and BC firms appear to have a slight advantage.
Figure 10: Survival Rates of Micro and Small Businesses (StatsCan 2000)
When the CFIB asked its members which level of government has the most impact on the day-to-day operation and success of businesses, most western Canadians identified their provincial governments (Figure 11). Alberta, however, ranked federal, provincial and local governments roughly equal in impact.
Figure 11: Level of Government with the Most
Impact on Business Operations (CFIB 2001)
3.3 CBSC Clients
The Institute surveyed a sample of CBSC clients in each of the four western provinces (see Table 1, page 3, for statistics). Clients are defined as individuals who have used CBSC services and products. Overall, most of the clients are well educated, and between the ages of 25 and 55 (Figure 12). English is overwhelmingly their language of choice. More men responded than did women.
Figure 12: Profile of Respondents - Client Survey
Clients were asked which category best described their situation when they last contacted a Centre. Results were fairly consistent across the prairie provinces, but BC revealed significant differences (Figure 13).
Almost 60% of the BC respondents classified themselves as "thinking of starting a business"; 25% said they were "an owner or employee of an existing business"; and only 4.5% identified themselves as professional advisors. (The categories were prescribed in the National Evaluation Framework.) These results are likely an artifact of the sampling population provided by the BC Centre, which was biased towards recent walk-in clients.
Figure 13: Category of Client Responding to Survey, by Province
Without BC, the overall distribution of client categories shows
a roughly equal proportion of start-up, existing businesses and
professional advisors
(Figure 14). The clients who were thinking of starting a business
comprised only 31% of the total.
Figure 14: Category of Client Responding to Survey (other than BC)
Figure 15: Industry Sector, Employees and Years in Operation / Period to Start-up
Most clients fell within the 'micro' business category (fewer than five employees), and almost all within the small business category (Figure 15). The majority of existing businesses had been operating for less than ten years; of these the breakdown into three-year segments is shown in Table 6. People thinking of starting up a business mostly indicated that they intended to do so within the next six months to a year.
Table 6: Years in Business by Province
|
BC
|
AB
|
SK
|
MB
|
Totals
|
|
|
1 to 3 years (%)
|
65
|
38
|
58
|
46
|
52.3
|
|
4 to 6 years (%)
|
17
|
29
|
4
|
21
|
17.4
|
|
7 to 10 years (%)
|
1
|
13
|
7
|
14
|
10.1
|
Source: Client Survey, question 50
Almost 90% of the clients reported they had used the services of a CBSC between one and nineteen times in the last twelve months.
The way in which clients are accessing business information is changing. Figure 16 uses two scales to illustrate the changes; lines in yellow/orange tones correspond to the right hand scale, and lines in blue tones correspond to the left hand scale. As can be seen in the Figure, fewer people are using fax-on-demand, and more are visiting the website and contacting CBSCs by e-mail. Walk-ins are still a significant mode of access (although underemphasized in Figure 16 because they are plotted against the left-hand axis), but they are trending downwards - from 200,000 in 1999/00 to 118,000 in 2001/02. Telephone calls, fax and mail are holding steady. Automated telephone use has not been included in Figure 16; however, calls have fallen off by about 30% over the past three years (from 44,500 to 30,400). Overall, total officer-assisted interactions have decreased in number while the total self-serve interactions have increased. This trend is consistent across all four provinces except BC, which has experienced a slight downturn in the number of website visits since 1999/00.
