New American Express Business Resilience Research Shows SMEs Remain Optimistic, But Cash Flow Remains A Critical Challenge

Small Business Canada

To say COVID-19 has had an impact on Canada’s business industry would be a serious understatement. The global pandemic created obstacles for many entrepreneurs — challenges that they are still fighting to overcome. Yet, despite having to navigate disruptions, Canadian SMEs have shown incredible resilience since the outset of the crisis. In fact, many Canadian entrepreneurs have taken this period as opportunity to reinvent their businesses and implement new strategies that have helped them overcome the many trials the pandemic has thrown their way.

To better understand the pandemic’s impact on Canadian SMEs, American Express conducted the American Express Business Resilience Survey, a survey of business owners across a number of industries, including retail, construction, wholesale trade, IT and manufacturing. This survey was designed to investigate the challenges Canadian entrepreneurs face and learn about the strategies they have implemented to aid in their recovery.

To learn more about the new research, CanadianSME sat down with Paul Roman, vice president and general manager of Global Commercial Services at American Express Canada, for an overview of the findings, what it means for Canadian entrepreneurs, along with his insights for the future.

Cash flow remains cause for concern

The Amex research demonstrated cash flow challenges continue to put strain on SME’s recovery efforts. The survey revealed 64 per cent of entrepreneurs face cash flow and financing issues as a direct result of the pandemic, and one in four report they do not have enough cash flow to sustain their business.

On top of cash flow concerns, doing business internationally also poses significant challenges for Canadian SMEs. In fact, 21 per cent of respondents have confirmed that they are facing several obstacles, including a shortage of materials and supplies (36 per cent) and delays in payment (44 per cent).

“There’s no question that the global nature of this crisis has added an additional layer of challenges for Canadian SMEs who operate on an international scale,” says Roman. “On top of that, cash flow is the most critical issue for the majority of business owners we surveyed, whether or not they make payments internationally.”

Although cash flow and international payments remain the main areas where Canadian entrepreneurs struggle the most, finding time to invest in revenue-generating activities is also proving to be a challenge. At a time where it is crucial to be able to invest time in finding new business solutions to help them stay afloat during a global pandemic, 85 per cent of entrepreneurs are forced to spend half of their days doing paperwork and managing supplier payments. “Now more than ever, SMEs are looking to carve out dedicated time for top-line focused initiatives. At American Express, our payment solutions provide access to intuitive tools that streamline processes, freeing up time for SMEs to put towards strategies for long-term success,” adds Roman

A New Way of Doing Business

Adjusting to the new way of doing business in these uncertain times has been challenging for entrepreneurs across the country. If there’s one thing that entrepreneurs should take away from this pandemic, it’s the ability to adjust and be adaptable.

From the outset of the pandemic, Canadian entrepreneurs implemented new strategies to help them survive in the long run. First of all, cutting costs was a big focus for Canadian SMEs. In fact, 37 per cent confirmed that they have reduced operating costs and 21 per cent reported they will be implementing cost-saving programs over the next year. Secondly, with social distancing measures disrupting normal business operations, technology is critical for businesses to increase efficiencies and drive revenue. Fifteen per cent of entrepreneurs confirm they will be modernizing their processes through technology, according to the survey.

The need for technology is also more critical than ever this holiday season and 67 per cent of SMEs agreed e-commerce will be important for business this year. Many businesses rely on seasonal sales to boost their cash flow and this year, the survey revealed 46 per cent of SMEs expect a decrease in 2020 revenue compared to 2019.

Throughout the pandemic, entrepreneurs have had to find new ways to reach their clients and many are looking to social media. Having a strong online presence has been beneficial for many businesses during the pandemic. In fact, survey results revealed that 52 per cent of entrepreneurs believe social media will be more important than ever to engage with customers this holiday season.

Finding the Right Financial Partners

During the pandemic, Canadian SMEs have re-evaluated their business needs. Twenty-five per cent of businesses report the need for more flexible payment terms due to reduced cash flow.

On top of this, survey results revealed 47 per cent of SMEs are looking for flexible repayment options and 41 per cent are looking for lenders that are trusted and reliable.

“This is a crucial time for SMEs as they work to overcome the many challenges brought on by the COVID-19 pandemic, which is why we remain focused on supporting businesses. Whether it’s investing in new revenue streams, introducing e-commerce or building up a social media presence, now more than ever it’s critical that SMEs can access the tools they need to focus on rebuilding,” says Roman. “We’re backing businesses with cash flow and payment solutions to help them streamline processes and free up time to focus on what matters most for long-term success.”

With payment solutions from American Express, businesses can maximize their cash flow with up to 55 interest-free days to pay for expenses, which can reduce the funding gap between accounts payable and receivables to enable businesses to put their cash to work in the interim and invest in recovery and growth.

While the survey revealed many business owners are struggling to overcome the challenges that the pandemic has caused, 74 per cent confirm they remain optimistic about the future of their business for the next three years.

“Small business resilience continues to amaze us. From the outset, SMEs adapted quickly and strategically to keep business running. The last eight months have presented challenges no one could have foreseen but the optimism felt among Canadian business owners is a true testament to the agility and strength of entrepreneurs,” adds Roman.

To find out more about how American Express is helping Canadian businesses with payment solutions and resources, visit the following link:

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