Dennis Fortman
National Leader, KPMG Enterprise
Partner-in-Change, KPMG Enterprise (GTA)
What makes for a successful business owner or entrepreneur during transformational economic times? While 2011 was proclaimed the year of the entrepreneur, the current market conditions and new competition will keep entrepreneurs on their toes. As the Canadian economy shows signs of economic improvement, what can we learn from the sentiment of Canada’s leading entrepreneurs?
Well, the Ivey Entrepreneur Index brought to you by KPMG Enterprise indicates that business confidence and optimism is on the rise. Twice annually, the Index surveys graduates of the QuantumShiftTM program, which we co-founded with the Ivey School of Business 8 years ago. QuantumShift Fellows lead high-growth companies; on average these companies are growing 25 percent per year.
“The Ivey Entrepreneurship Index was created in the belief that Canada’s entrepreneurs have a keen sense of business trends and economic currents,” explained Stewart Thornhill, Executive Director, Pierre L. Morrissette Institute for Entrepreneurship. “The net increase in overall optimism about the Canadian economy reflected in the Spring 2011 Index, relative to Fall 2010, captures their forward looking view. Not only do they see positive prospects for their own businesses, but they foresee growth in the overall economy.”
|
Ivey Entrepreneurs Index |
April |
October |
Change (percentage points) |
|
Do you expect your company’s revenue to grow? |
92% |
87% |
+5 |
|
Do you expect your company’s profit to grow? |
89% |
84% |
+5 |
|
Do you expect to seek external capital? |
32% |
40% |
-8 |
|
Do you expect to hire additional employees? |
80% |
78% |
+2 |
|
Do you expect the Canadian economy (as a whole) to grow? |
89% |
69% |
+20 |
*132 respondents
The results of the Spring edition of the Index to be published the first week of May see these business leaders as bullish and expecting to participate in the economic uptick. The numbers indicate they are looking for both revenue and profit to grow, which may indicate a more stable economy is on the horizon. These business owners took care of their balance sheets over the past year, strengthening their financial position through improved operating results and taking full advantage of easing credit markets. Reading between the lines, these business owners have improved earnings and cash flow and expect to continue to grow and build value in their business.
It’s not unusual for the hiring of employees to slightly lag behind a company’s growth and we can see this holds true in the results. Business owners are cautiously optimistic on this front and look to hire new talent only when and if required to help fuel their continued growth.
What is a welcomed return is a noticeable increase in optimism. Optimism can fuel the entrepreneur’s personal drive toward success sparking the “can do” approach that leads to a competitive edge. Does this optimism lead entrepreneurs to take more risk? Does optimism help entrepreneurs take stock of business opportunities with an open mind, better enabling them to take advantage of transformational economic times? Does optimism unencumber them to make decisions and take action?
Entrepreneurs have become smarter about how they run their businesses, having managed through a challenging couple of years. People feed off this optimism—could the Canadian economy and its future feed off of the optimism prevalent among the QuantumShift Fellows? Couple optimism with the Secrets of Entrepreneurial Success uncovered in a recent survey undertaken by the Canadian Federation of Independent Business and Canadian business owners may find the “straw man” components to develop their own blueprint for business success.
In today’s business environment, the only constant is change. This edition of Business Adviser offers a variety of informed, independent opinions on the business issues that matter to help you navigate changing market dynamics and prepare for the growth that comes with market recovery.
Learn further results of the Ivey Entrepreneurs Index brought to you by KPMG Enterprise.