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How Big is Small Business? Top 5 Things Entrepreneurs Need to Know

MantraVision 2015

Plamen Petkov, Vice-President, Ontario & Business Resources

October 21, 2015

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Canadian Federation of Independent Business (CFIB)

CFIB is a not-for-profit, non-partisan organization representing over 109,000 small and medium-size businesses across Canada, including 42,000 businesses across all sectors in Ontario.

Each week, our representatives make nearly 2,000 personal visits to member businesses across Canada, allowing us to speak credibly on behalf of our members.

CFIB members set association policy through Mandate votes with “one member, one vote rule” – research capacity is second to none.

CFIB is 100% funded by members.

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CFIB’s Ontario Member Profile

Our diverse membership of 42,000 businesses is a good reflection of the Ontario economy

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Professional services7%

Hospitality6%

Agriculture5%

Finance, Insr, Real Estate5%

Enterprises & admin mgmt4%

Social services4%

Other4%

Transportation3%

Retail21%

Construction13%

Manufacturing11%

Personal, Misc. services10%

Wholesale7%

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Small business employment

SMEs employ 89 per cent of all private sector employees

Source: Industry Canada, Key Small Business Statistics, August 2013

Small (1-99) 67%

Medium (100-499) 22%

Large (500 +) 11%

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Small business employment

94% of Ontario Businesses have fewer than 20 Employees

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1-4 employees 23.5%

5-19 employees 13.6% 20-49 employees

3.4%

50-499 employees 2.1%

500+ employees 0.1%

Businesses with no employees

57%

Source: Industry Canada, Key Small Business Statistics, August 2013

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Respect for small business

How much respect do you have for each of the following in Canada? (Average level of respect, scale 0 to 10)

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5.1

5.3

5.6

5.6

5.9

7.0

7.0

8.2

8.7

Labour unions

Government

Banks

Large companies

Legal system/Courts

Healthcare system

Education system/Schools

Small business

Farmers

Source: CFIB, Perspectives on small business in Canada, July 2011

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Entrepreneurship as a career choice

Running a business has been a rewarding career choice (% response)

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Source: CFIB, Point of View survey on CFIB’s 40th Anniversary, based on 3,594 responses

Agree, 92

Disagree, 7

Don't know, 1

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Reasons to go into business

Why did you become a business owner? (% response)

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Source: CFIB, Point of View survey on CFIB’s 40th Anniversary, based on 3,594 responses

5

13

20

20

24

42

45

66

Other

Other suitable job opportunities were not available at the time

To continue the family business

Had a great idea for a business that I wanted to pursue

To have a more flexible schedule

To make better use of my skills and knowledge

Financial opportunity

To be my own boss and make my own decisions

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The things nobody tells entrepreneurs

1. Good help is TRULY hard to find

2. Taxes and more taxes

3. The cost of getting paid

4. Death by 1000 paper cuts

5. Being part of a biz group

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1. Help Wanted

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Secrets of success

During the past three years, which of the following elements have been important to the success of your business?

(% response)

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Source: CFIB, Point of View survey on CFIB’s 40th Anniversary, based on 3,594 responses

5

10

16

18

31

54

60

61

63

Don't know

Defined business plans

Family support

Innovation

Passion for what I do

Product(s)/Service(s)

Customer loyalty

Hard work

Employees

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Contribution to communities

As a business owner, how have you contributed to your community? (% response)

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Source: CFIB, Point of View survey on CFIB’s 40th Anniversary, based on 3,594 responses

1

5

23

47

47

59

72

74

85

No involvement

Other

Donating employees’ time

Donating my time

Promoting local charities

Sponsoring sports teams

Donating goods or services

Financial donations

Employing locals

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Shortage of Labour “During the past three years, have you had difficulty hiring new employees?”

Source: CFIB, Small Business and Labour Survey , 2015, n=8824;

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Yes, it was very difficult,

27

Yes, it was somewhat difficult, 40

No, I had no difficulty hiring

for the available

positions, 20

No, I wasn’t looking to hire, 13

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What types of positions are you having difficulty filling?

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8

21

33

40

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Jobs that require university education

Jobs that require no formal or specific training

Jobs that require a college diploma or apprenticeship training

Jobs that require a high school diploma or occupation-specific training

Jobs that require on-the-job training

Source: CFIB, Training in Your Business survey, 2014, n=6705;

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2. Taxes and more taxes

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Selection of the taxes Ontario SMEs might pay

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Premiums and Payroll Tax

• Workers’ Compensation

• EI, CPP and Proposed ORPP

premiums

• Employer Health Tax

Sales and Excise Tax

• HST

• Fuel and gasoline taxes

• Insurance taxes

• Tobacco taxes

• Liquor mark-ups

Corporate Income Tax

• Small business corporate tax rate

• General corporate income tax rate

• Manufacturing and Processing rate

Property Tax

• Property tax rates

• Land Transfer tax

• Estate Administration Tax

Personal Income Tax Rates

College of Trades fees

Environmental Stewardship Fees

In Ontario, the average

commercial property tax

is 2-3 times higher than

what residents pay!

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Which forms of taxes affect the growth of your business the most?

63

54

47

43

42

3

Payroll Taxes (e.g. EI, CPP, WCB, etc.)

Corporate Income Taxes

Property / Capital Taxes

Personal Income Taxes

Sales Taxes (e.g. GST/HST, PST)

Don't know

Source: CFIB, 2014 Pre-budget survey, 8000 responses, Fall 2014

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3. Credit Cards...aka “how much you have to pay to get paid?”

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Credit cards – how much does your card cost?

Some credit cards cost small businesses 1.7%-2% of the transaction cost.

Others.... 2%....3%...4%...

• And the merchants don’t know how much each transaction will cost them!

And that’s only the beginning...

Restrictive contracts

Deceptive sales tactics

No dispute resolution process for merchants

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Credit Card Code of Conduct – The changes Requires processors to pass along Visa/MC reductions

announced in November 2014

Cuts are between 6-22% depending on the card type

Merchants will be able to opt out if savings aren’t passed on

Limits auto-renewals to a maximum of 6 months

Applies to mobile payments, reducing opportunity for fee grabs

Improved dispute resolution process

Credit card issuers will have to inform consumers that using premium cards may mean higher fees

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Educating the public

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SMALL BUSINESS OWNER

PST collections

WCB

Business registration

Property tax

Signage by-laws

Permits & licenses

Land use by-laws

OHS

Environment regulations

Labour code

EI Privacy ROE Food labelling

Health inspections

4. The regulatory environment

CPP StatsCan surveys

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Red Tape

“Your not-so-silent partner”

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If I had known the burden of regulation, I may not have gone into business (% response)

Source: CFIB, Survey on Regulation and Paper Burden, 2014, n=7304

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Not applicable/

Don't know, 19

Disagree, 48

Agree, 33

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Red Tape

Most Burdensome Provincial Regulations (% response)

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Source: CFIB, Canada’s Red Tape Report, 2015

3

4

4

9

9

15

15

22

27

29

55

60

73

Liquor and tobacco

Food and restaurant inspections

Other

Consumer protection

Selling to government

Environment (agriculture, energy, waste and recycling)

Health permits and inspections

Other tax compliance

Financial, insurance and banking

Business registration, reporting requirements

Employment standards

HST

Workers’ compensation and occupational health and safety

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5. Part of a Biz Group: Exclusive Support

Call CFIB Business Resources Counsellors at:

1-888-234-2232

Members receive bilingual advice in resolving business issues and getting support in dealing

with all government departments.

No charge for CFIB members!

Call as often as you like!

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Shop Small Biz is an initiative designed to empower small business owners and to educate consumers about the important role that small

businesses play in our lives.

Sign up for free at www.shopsmallbiz.ca

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Google Ignite - complimentary networking event with CFIB and Google Canada on October 28th in Toronto

Help your business succeed online; one-on-one workshops with Google’s Certified Partners.

Great prizes to be won, including Nexus tablets and more!

Register at ignitecanada.com. Space is limited.

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Thank you

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