(CBC.ca)

The Canadian Federation of Independent Business estimates that small enterprises constitute almost 50 per cent of Canada's economy, versus 40 per cent in the United States. The Canadian Federation of Independent Business estimates that small enterprises constitute almost 50 per cent of Canada's economy, versus 40 per cent in the United States. There's no shortage of news about big companies facing major upheavals as they deal with the fallout of the global financial crisis, but small businesses make up an enormous portion of the Canadian economy and they're also coming to grips with their own set of challenges.

Industry Canada defines a small business as a company with fewer than 100 employees, and Statistics Canada says there were just over 1 million companies across the country fitting that description in July 2008 (and that tally does not include self-employed entrepreneurs).

Put another way, 98 per cent of firms in Canada fall into the small business category, and about 139,000 new ones are created each year.

A Canadian federal government study estimated that small business accounted for 80 per cent of total job growth for the 10 years between 1993 and 2003, or 747,000 new jobs.

About a quarter of those businesses produce goods, with the remainder providing services. They employ more than five million people (about 48 per cent of the private-sector labour force), spend a higher percentage of their revenue on research and development than large companies do, and generate roughly a quarter of Canada's gross domestic product.

Small businesses don't have it easy. According to StatsCan figures, three out of every 10 new small businesses fails in the first year, half make it to three years, and only 25 per cent are still in business after nine years. And that was before the financial crisis hammered the economy and tightened access to the credit and loans that grease the operations of many small businesses, whether they're buying new equipment, meeting payrolls or buying raw materials and inventory.

The global financial crisis has made banks reluctant to lend, reducing the flow of easy credit that many Canadian small businesses have become used to in recent years. The global financial crisis has made banks reluctant to lend, reducing the flow of easy credit that many Canadian small businesses have become used to in recent years. In a poll of more than 400 small business owners across the country conducted between Sept. 29 and Oct. 6 by Ipsos Reid for American Express Canada, 41 per cent of respondents said they are already feeling a negative impact from the current economic environment. Another 25 per cent said they expect the problems in the global economy will hurt their business in the coming months.

In the same poll, one in six respondents was worried about the short term viability of their business, and one quarter of those polled acknowledged that their company will have serious problems in the near future if sources of credit dry up.

Small Business Week runs from Oct. 20 to 24, saluting Canadian entrepreneurs even as they face increasingly daunting economic times. CBC News has assembled an array of features about some of the issues facing small firms in Canada, as well as resources for entrepreneurs launching and nurturing small business ventures. Check this page throughout the week for new additions.

(CBC.ca)

Features:

  • Small-business FAQ: Frequently asked questions and interesting statistics about the small business segment of Canada's economy, and how small firms are weathering the rough economic seas.
  • Women in Canadian business: Female entrepreneurs are taking the small business scene by storm.
  • Top 10 tips for small businesses: Wisdom gleaned from the latest season of CBC's Fortune Hunters that should come in handy whether you're trying to decide whether to launch a venture or figuring out ways to take an existing business up a few notches.
  • Dress shop owner Tisiano Giusti talks about how the economic downturn has affected his business and what he thinks government can do for small businesses (Newsworld interview runs 4:13).
  • Hit or Miss: Think your business idea is too off-the-wall? Here are some of the wackier ideas from the lastest season of CBC's Fortune Hunters.
  • Operators of an eco-friendly car wash say staying on budget is the key to a successful business plan (Fortune Hunters interview runs 1:29).
  • ChickAdvisor.com chief says be prepared to make sacrifices to achieve small business success (Fortune Hunters interview runs 1:29)
  • Know your own strengths and weaknesses, say dance school owners (Fortune Hunters interview runs 2:51).
  • Forbes.com list: America's best 200 small companies
  • Fortune Hunters: Programming for entrepreneurs from CBC Television, exploring how people eager for self-employment are exploiting new trends and opportunities.

Things small businesses need to know: