It’s no news that entrepreneurs are the main drivers of the major economies of the world, inclusive of the Canadian economy. Economic growth, more than anything else, is driven by the solutions provided by entrepreneurs.
Small and medium-sized enterprises (SMEs) have been credited, and reasonably so, with being the backbone of Canada’s net employment growth and gross domestic product (GDP) over a significant period of time.
Despite these stellar characteristics of entrepreneurship, the entrepreneurial journey is known to be tough, lonely, arduous, and frustrating. As a matter of fact, this is often the case for most entrepreneurs across the nations of the world. A gruesome reality that has not spared entrepreneurs in Canada.
THE “LEGION DEMONS” OF ENTREPRENEURS IN CANADA
Despite Canada being ranked high among the choice countries conducive to doing business, the challenges facing entrepreneurs in the country are enormous.
From managing cash flow and balance books to dealing with acute labour shortages impacting the country, keeping onside government policies and regulations, and finding and retaining clients, among a host of other challenges – it appears the “demons” unleashed on entrepreneurs are innumerable.
With the odds grossly stacked against them on every side, the outlook being somewhat bleak, and survival prospects dimming by the tick of the clock, can Canadian entrepreneurs keep their heads above water and survive the “shipwrecks” that devour enterprises as they strive for excellence on the stormy shores of business life in Canada…?
Think we’re being dramatic? Maybe, or perhaps we’re just passionate. Here are some of the biggest challenges that entrepreneurs in Canada face today.
1. CANDIDATES HAVE THE UPPER HAND IN TODAY’S LABOUR MARKET
Trends in labour shortages in Canada have reached a tipping point. With a grave impact on Canadian employers, a shortage in the labour force constitutes one of the biggest challenges Canadian entrepreneurs face today.
With more options for job candidates to choose from in the labour market, entrepreneurs, both from SMEs and large-sized enterprises, face fierce competition from their peers in a losing battle to recruit and retain talent.
This has not come without consequences – dire ones, for that matter.
In a recent survey that cuts across twenty different industries and captures companies that employ more than 1,650,000 Canadians, the Business Council of Canada (BCC) reports that labour shortages force more than two-thirds of the respondents to cancel or delay projects. 60% of these companies have lost revenue, 30% have had to relocate outside Canada even, as 26% have suffered the loss of market share.
In the words of Trevor Neiman, BCC’s Director of Digital Economy and Legal Advisor, shortage in the labour force “is the number-one barrier to economic growth and competitiveness in Canada”.
2. BUSINESS AND CONSUMER CLIENTS MAY BE SCALING BACK ON SPENDING
In May 2022, the inflation rate in Canada, qualified by the Consumer Price Index, CPI, rose to its all-time highest in 40 years, exceeding the predictions of economists and financial analysts.
With Canada, just like other parts of the world, still battling the aftermath of the Covid-19 pandemic, the added impact of a high inflation rate is dealing telling blows to Canadian entrepreneurs.
As a result of the aforementioned, the rate at which clients of service-providing firms, as well as customers of goods-producing enterprises, cut down on spending is becoming alarmingly high.
The resultant decline in clientele profile and customer base has further compounded the many challenges that entrepreneurs in Canada grapple with.
3. HIGHLY COMPETITIVE AND SATURATED MARKETS
While there are numerous advantages to having a competitive marketplace, its downsides must never be glossed over. In fact, surviving the highly competitive and saturated Canadian markets is a big challenge for entrepreneurs in the country today.
Unlike larger firms with higher competitive advantages, small and medium-sized enterprises in Canada face a herculean task in penetrating and eventually thriving in Canada’s grossly competitive and saturated markets.
The increased level of competition in and saturation of Canadian markets remarkably accentuates the need for innovation with its attendant realities, such as high-cost implications that SMEs may find very difficult to shoulder compared to the big names in similar industries.
4. HIGHER COSTS, RATES, AND SUPPLIER FEES
This point has been alluded to in #2. It is obvious that the ripple effects of high inflation rates go beyond a reduction in clients’ spending ability and consumers’ purchasing power. More importantly, the resultant skyrocketing increase in the cost of production makes it extremely difficult for Canadian entrepreneurs to stay in the black.
With increasing inflation rates comes a spike in the cost of production across all levels of the industry value chain, both in the short and long term.
The results are harsh economic realities for entrepreneurs and struggles for survival in the murky waters of business life in Canada.
5. LACK OF CLARITY, INSIGHTS, AND STRATEGY IN MANAGING TAX, FINANCE, AND CASH FLOW
The biggest challenge faced by Canadian entrepreneurs has to do with the paucity or gross lack of strategic insights on how to manage tax, finance, and cash flow in their businesses.
More often than not, the success or failure of an enterprise can be objectively predicted to a high degree of accuracy based on how issues surrounding tax, finance, and cash flow are handled by the entrepreneur.
It has been debated extensively in public circles that Canada’s tax structure discourages entrepreneurship in more than one way. In addition, the average Canadian has little knowledge of personal income tax management – a dismal condition which reflects itself when such individuals venture into the loosely-defined arena of entrepreneurship.
To worsen the case, not knowing how or when to make certain decisions which have grave implications on the financial status of their businesses, and are central to the growth and survival prospects of their enterprises, is an added cause of grief for Canadian entrepreneurs.
THE “PROVISION” WAY OUT
The challenges of the entrepreneur are enormous. Those mentioned above are just a few of the “legion”.
While it is impossible to have a seamless entrepreneurial experience, it is very possible to have an enjoyable and profitable one.
The question, therefore, is this:
Are there giants on whose shoulders Canadian entrepreneurs can stand to avoid the many pitfalls that adorn the entrepreneur’s path as well as help navigate the odds that fasten themselves on the country’s entrepreneurs?
This is exactly where Provision CPA comes in.
Provision CPA is your go-to entrepreneurial accounting and taxation firm if you want to rip the blinders off your tax strategy, know the real-time financial health status of your business, invest and/or increase profits, and gain financial insights to make better business decisions in your business and life.
For over twenty years, we have interacted with hundreds of entrepreneurs across every industry you can possibly think of in Canada, and we’ve been able to have more than a glimpse into the difficulties and challenges which they face.
We understand that financial decisions either make or mar a business. When done right, it has the capacity to position a business for success and unlock opportunities for growth and expansion.
We’ve held their hands on their entrepreneurial journeys, rescued numerous sinking “entrepreneurial ships”, and repositioned them on a pedestal of success all these years.
With our strategic services tailored to the specific needs of each of our clients and unlimited on-call access to our team of entrepreneurial tax accountants and CPAs, we offer accounting, taxes, and financial strategy to business owners in Canada while helping them navigate the odds stacked against them.
Wait a sec.
There is more to why we are your best option. It is because we have walked these paths, weathered these storms, and successfully scaled the same hurdles that yawn at you. We understand your fears on a personal level. Your concerns, pains, and struggles resonate deeply with us.
Contact us today. Let’s do it the Provision Way. Let’s make your entrepreneurial journey a rich, rewarding, and fulfilling one.
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