10 surprising stats about small business in Canada

A breakdown of what small businesses contribute to the Canadian economy.

Small businesses are often touted as the backbone of Canada's economy, but how much do they actually contribute to the country's gross domestic product? How many small businesses are there, and  how many do they employ across the country? And what exactly is a small business, anyway?

To mark the Oct. 17 start of small business week in Canada, CBC compiled some of the big numbers behind small businesses in this country.

What is the definition of a small business in Canada?

1 to 4 employees: Micro-enterprise

5 to 100: Small business

101 to 499: Medium-sized business

500-plus: Large business

(Source: Industry Canada)

How many small businesses are there in Canada?

The total number of registered employer businesses in Canada (businesses with at least one employee on payroll) as of December 2010, the most recent figure available: 1,138,761

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1,116,423 of those were small businesses, comprising 98 per cent of all employer businesses in Canada.

(Source: Industry Canada calculations using data from Statistics Canada)

How many Canadians work for small businesses?

5,137,147 (48.3 per cent of Canada's total workforce)

In 2005, 41 per cent of employed Canadians worked for businesses with fewer than 20 employees.

(Source: Industry Canada calculations using data from Statistics Canada)

How many Canadians are self-employed?

In 2010, 2.7 million Canadians were self-employed.

35 hours: Average work week for employees in 2010

40 hours: Average work week for the self-employed in 2010

31 per cent of self-employed Canadians reported working more than 50 hours per week in 2010, while 4 per cent of employees worked past that threshold in the same year.

(Source: Statistics Canada)

Success vs. failure

Largest number of new Canadian small businesses established in one year: Approximately 115,000 in 2005.

Smallest number of new small businesses established in one year: Approximately 90,000 in 2002.

Largest number of small businesses that disappeared in a single year: Approximately 100,000 in 2006

Net average of small businesses established from 2002 to 2007: 15,000

(Source: Statistics Canada)

How active are small business owners online?

In 2007, the year for which the latest statistics from the Canadian government are available, 85 per cent of small businesses had internet access. 99 per cent of large businesses had internet access.

36 per cent of small businesses had their own websites (compared to 91 per cent of large businesses)

7 per cent sold goods/services online (compared to 22 per cent of large businesses)

(Source: Industry Canada calculations using data from Statistics Canada)

What do small businesses contribute to Canada's total exports?

86 per cent of Canadian exporters were small businesses in 2009.

Small businesses accounted for $68 billion in exports (25 per cent of Canada's total export value).

(Source: Industry Canada calculations using data from Statistics Canada)

How much do small businesses contribute to Canada's GDP?

In 2005, small businesses accounted for 42 per cent of the country's private sector GDP.

(Source: Industry Canada)

In 2009, 28 per cent of the country's total GDP came from businesses with fewer than 50 employees.

(Source: British Columbia Statistical Services)

Are small business owners confident about Canada's economy?

The CFIB's Business Barometer Index fell to 61.7 in August 2011, its lowest reading since July 2009. A score of 50 or higher means more business owners expect a stronger performance in the next year than those who expect a weaker performance.

Provincially, Alberta's index was the highest in the country at 75.

Prince Edward Island had the lowest index at 59.7.

The index bottomed out in late 2008/early 2009 at under 40.

(Source: Canadian Federation of Independent Businesses)

What will happen to small businesses when the owners retire?

With the baby boomers reaching retirement age, a large number of companies will likely change hands in the coming years. According to TD Waterhouse's early October Business Succession Poll of 609 small business owners, just 24 per cent of small business owners surveyed said they had a succession plan worked out for retirement.

Of those polled, whether they had a formal plan or not, 23 per cent said they would simply close their business when it came time to retire; 20 per cent planned to sell their business to a third party; 18 per cent expected to transfer it to a family member; 12 per cent said they'd sell to a partner or employee; and 27 per cent said they were not yet sure what they'd do with their business.

Dragons' Den Chat

On Oct. 9, CBC News hosted an online chat (see replay) where entrepreneurs could ask the cast anything about starting, marketing and running a business. During the chat, thousands of participants weighed in through several informal polls. Here are the results:

Has your small business fared better or worse this year than the last?

  • Better - 44 %
  • Worse - 12 %
  • About the same - 45 %

How do you market your small business?

  • Print - 10 %
  • Radio or television - 1 %
  • Online/Social media - 60 %
  • I don't market my business - 29%

What is your biggest challenge in running a small business?

  • Cash flow - 51 %
  • Marketing - 21%
  • Managing staff - 10%
  • Work-leisure/Family - 18%