Influencia de las empresas familiares en economias desarrolladas - I

Small businesses are crucial to Canada's economy, and they don't have it easy

By Fred Langan, CBC News Last Updated: Tuesday, October 20, 2009 | 3:45 PM

Cam Brown is the owner of Camlen Furniture in the town of Knowlton in Quebec's Eastern Townships. (Fred Langan/CBC). He is part of a phenomenon that is saving Canada from the ravages of the recession.

Brown operates a small business, one that has come through the worst of the recession just about intact. He employs 36 people at a furniture factory and retail outlet in the town of Knowlton in Quebec's Eastern Townships.

His company, Camlen Furniture, manufactures furniture in the style of old pine antiques, though Brown is careful to point out these are not antique reproductions. "We call it country furniture. We do everything from big entertainment units that people use for home electronics, to built-in kitchens."

As we walk through his 15,000-square-foot factory, he points to an armoire that looks old, though it is brand new. "We beat it with chains to give it the distressed look," Brown said. "And we paint everything inside and out so it has a uniform colour." It is small businesses like Camlen Furniture that are helping Canada weather the global recession. "There's no doubt sales are down … we had to lay off two people," said Brown, who is also president of the local Chamber of Commerce. "But we also have five small shops that supply us with material, all run by ex-employees. So in total we actually employ about 50 people."

'After falling during the recession, consumer confidence in Canada has made a strong comeback, as opposed to the U.S., where confidence has only improved marginally from a deeper recessionary hit.'—Benjamin Tal, CIBC

While large businesses and factories have closed or seen massive layoffs, smaller Canadian businesses have generally prospered by comparison, according to a recent report by the CIBC. By almost any measure, small and medium enterprises in Canada "surprised on the upside during the recent recession," wrote Benjamin Tal, senior economist at the CIBC and author of the report released in early October. Government subsidies have helped big businesses, such as car plants, but they've bolstered the small business sector as well.

Measures such as the renovation tax credit, for example, helped boost consumer demand. Brown says the side of his business that makes custom kitchens is booked with work orders until January — and that means jobs.

Do-it-yourself employment

The definition of a small business in Canada is an enterprise with 100 employees or fewer, according to Becky Reuber, who studies small business and is a professor at the Rotman School of Business at the University of Toronto. To put the economic impact of this sector into perspective, there were 2.3-million business establishments in Canada as of December 2008, the vast majority of them small businesses, she says.

Tineke Gow runs the Artisan Inn in Trinity Bay on the Bonavista Peninsula in Newfoundland and Labrador. "The 2.3-million number includes micro businesses, which have four or fewer employees," Reuber said. "Over a million of those businesses have paid employees."

Many people who start their own businesses are in effect creating their own jobs, which is important to the economy as larger organizations downsize. Tineke Gow and her husband are a prime example. They run the Artisan Inn in Trinity Bay on the Bonavista Peninsula in Newfoundland and Labrador. "It's a cluster of four buildings right on the ocean," said Gow, a native of Holland who met her husband at Memorial University in St. John's.

She is a psychologist, and her husband is a marine biologist who left teaching at the university and now works in the inn business full time. Creating their own business has allowed them to choose where to live and work — one of the pluses of working for themselves, Gow said. "The worst part is working 365 days a year and never getting much of a chance of a vacation, though my daughter is going to relieve us for a while soon," she said. The couple have been running the Artisan Inn for 18 years, have 10 employees, and say business has been steady, despite the recession. "We've kept busy with people from the United States and other parts of Canada," Tineke Gow said. "Right now we have about 20 guests from California, B.C. and Toronto."

Bumpy road to economic recovery While small businesses have generally fared better during the recession than many larger companies, they've by no means had it easy. Camlen, for example, sells 70 per cent of its furniture in Canada and 30 per cent in the United States. Brown's retail store in Knowlton handles about 20 per cent of his production. During the recession he has noticed a drop in sales, in particular to neighbouring New England. (The border with Vermont is only 35 kilometres from his factory.)

The recession has also brought problems collecting overdue bills. "This year with the drop in sales we're seeing customers who are having trouble paying their bills, especially from the United States," Brown said. "That sort of unpredictability is the toughest thing about running a small business." Reuber agrees that collecting can be a major problem for small businesses. In her studies of the sector, she's found other negatives as well, including the isolation of working alone.

For people wanting to start a small business, finding the original capital can also be tough. Banks are often reluctant to lend to startup businesses. "Most people start businesses with their own money," Reuber said. "People use their savings, get money from family and friends or even borrow on credit cards or lines of credit."

And about half of small businesses fail in the first five years, according to a study published by the Organization of Economic Co-operation and Development.
The payoff

With all these factors to consider, it is a wonder so many Canadian entrepreneurs go into business for themselves. The payoff comes with small businesses such as those run by Cam Brown and Tineke Gow. "There are six members of my extended family who work here," Brown said. "They all own their homes and lead comfortable lives in a beautiful part of the world. That's one of the great things about owning a small business."

Gow agreed. "We operate in a slice of heaven," she said.

Even with less successful businesses, Canadians enjoy the feeling of independence that comes with working for themselves, and they're willing to pour their lives into small enterprises.

And it's this personal investment that's so valuable to Canada's economic recovery.

Read more: http://www.cbc.ca/money/smallbusiness/story/2009/10/20/f-small-business-economy-recession.html#ixzz1E3ZAMsuG