The Small Businesses Projecting Growth Aren’t Those You Expect, Says Canadian Chamber Report

OTTAWA, October 23, 2024 – The small Canadian businesses with high-growth potential and expectations might not be the ones you have in mind, says a new report from the Canadian Chamber of Commerce’s Business Data Lab (BDL).

Scaling Success: The Characteristics of High-Growth Small Businesses in Canada, shows that while many Canadians might think of the tech sector when thinking of firms with high-growth potential and expectations, the common characteristics for small businesses that are most likely to project high growth are, in fact, quite different. These firms typically:

• Have 5–19 employees
• Have operated between 3–10 years
• Are located in Ontario and Quebec
• Are based in manufacturing, accommodation and food services, or professional services
• Are owned by immigrants or visible minorities
• Are exporters

“This bucks our common misconceptions about tech firms being those most poised to grow,” says Marwa Abdou, the report’s lead author and BDL Senior Research Director. “Additionally, small businesses are more optimistic about achieving robust or high growth, compared to larger firms.”

The report details how approximately 12% of small businesses project growth of 11% or more, compared to almost 8% of medium and large businesses. Three percent of small businesses believe they can achieve “high-growth status,” defined as annual growth of 20% or more.

“Canada needs more high-growth firms,” says Abdou. “Years of slow economic growth, low productivity and underinvestment have weakened our global competitiveness and resulted in declining living standards for Canadians. Historically, it’s small businesses that have been a key driver of job creation in Canada. These are the firms employing almost two thirds of the private sector workforce. And despite slower employment growth over the last four years, small businesses continue to account for almost half – that’s 43% – of all job gains.”

The report underscores increased input costs, inflation, difficulty attracting and retaining labour, and weak consumer demand as key challenges to growth. The most crucial factors for growth include access to financing, the ability to export, technological adoption and a supportive policy environment.

“Our own growth was driven by the rapid expansion of the digital marketing industry,” says Brock Murray, Co-Founder, seoplus+. “Tapping into that growth required access to top-tier talent and new, advanced technology.”

To help small businesses scale effectively, the report recommends public policy that targets firms’ biggest challenges by simplifying financing, reducing regulatory burdens, fostering export growth and prioritizing upskilling.

About the Canadian Chamber of Commerce — The Future of Business Success 

The Canadian Chamber of Commerce is Canada’s largest and most activated business network — representing over 400 chambers of commerce and boards of trade and more than 200,000 business of all sizes, from all sectors of the economy and from every part of the country — working to create the conditions for our collective success. The Canadian Chamber of Commerce is the undisputed champion and catalyst for the future of business success. From working with government on economy-friendly policy to providing services that inform commerce and enable trade, we give each of our members more of what they need to succeed: insight into markets, competitors and trends, influence over the decisions and policies that drive business success and impact on business and economic performance.   

Contact 

Rewa Mourad
Public Relations Specialist
613.238.4000 (2211) 
rmourad@chamber.ca