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Small business, hard timesSmall business owners boom or bustCaitlin McCormack│April 13, 2009Business is tough even when times are not, but when faced with an economic recession things can be particularly difficult, especially for small business owners. Unemployment numbers in Canada are the highest they’ve been since September 2003. Companies are closing shop or merging, bankruptcy is the new black and the stock markets are posting some of the worst numbers in recent history. According to Statistics Canada, there were just over one million businesses in Canada in 2003. Most (92 per cent) are considered small businesses, employing less than 20 workers, accounting for 21 per cent of total employment. While many hear about the ups and downs of the larger corporations, it’s important to remember the independent businessperson, especially when their numbers represent a significant amount of the country’s employment. During a recession, there are some sectors which typically see a decline in business and others that see a growth in revenue. Businesses that typically do well in tough economic times include: discount retailers such as Walmart, vice industries including liquor stores and smoke shops, insurance companies, psychics and mystics, beauty services such as nail salons and hairdressers, upgrade services like shoe repair or home improvement and government-funded infrastructure. Here, we take a look at an owner-operated business that is going well during this economic recession, and another that’s still managing to stay afloat. Staying afloatSome businesses manage to keep the books balanced when the economy is in trouble. Their services aren’t necessarily in high demand, but still required. Such is the case for Windows Choice, a Toronto-based company that provides window and screen door installation. They pride themselves on quality service and are available on weekends. James McKay and his business partner started their company about five years ago. McKay says consumers relate better to small businesses as they’re often regional or city-based and have more of a relationship with their community. Within an owner-operated company, customers can barter for better prices or extra services and small businesses often offer more flexible hours. “A small business has a head office in their place of work where an owner is present in some shape, or form. Minimal bureaucracy allows for customers to get better service, and prices from small businesses.” McKay believes it’s better to do business with smaller companies when times are tough for a number of reasons. “When inflation is high, and recessions are in effect, it is only a small business which would receive payment plans based on post-dated cheques, personal words, and similar acts of faith. Small businesses tend to protect communities from large-scale downturns.” He says it’s the cyclical investment of money that causes this. For example, someone who works in Toronto is spending their money at Toronto businesses. Corporations like Wal-mart send their profits to a head office, they don’t reinvest in the community their store is in. “They can incidentally cut the heart out of small regional communities,” says McKay. McKay credits part of their success to the fact their team reflects the diversity of the city. “My partner is able to deal with certain customers that might not necessarily know who to turn to for this kind of work. So we’re available to many people, which works to our advantage.” He also says that if a business provides a quality product and stands behind their workmanship, they’ll be able to weather the storms of tough economic times. “If you didn’t run your business properly before all this, you’re in big trouble,” he says. Business is growingNadiya Shah is a Diviner. She uses mystical tools such as tarot cards or palmistry in order to foretell events and give guidance to her clients. She runs her own astrology website, Nadyiashah.com, and has her own consultation service. Working primarily with astrology, her website provides monthly written horoscopes, video horoscopes, and access to online workshops and classes. The site also provides access her consultation services. As a result of the current recession, Shah’s business has increased. As an astrologer, part of her job is to provide her clients with guidance and support, particularly in times of great personal change or uncertainty. “They want to believe that there is a purpose to the apparent insanity of what’s going on in the economy right now,” says Shah. As the world is now collectively going through a recession, there are a lot of people facing uncertainty. “We all individually go through different cycles, where we have periods [of uncertainty], and it’s during those periods that one would be more drawn to see an astrologer,” says Shah. She says that normal avenues of affirmation are not available people, such as being able to find another job in their field; entire sectors such as the auto industry are closing their doors, leaving many without a prospect in their industry. “[My clients] don’t know if they’re going to get a job. Everywhere they look people are saying ‘oh it’s impossible it’s so hard’,” Shah says, “So they are coming to me to find out where their opportunities are, when the hard times are going to be over for them, and how they can manage and navigate themselves through this current cycle, until they reach a point where they can start to feel prosperous again.” Although Shah’s job may be recession proof, she’s most fortunate because she does what she loves. Even though business is good, it’s not all smiles for Shah. “I don’t like it that people are suffering and that they’re coming to me because they are suffering because of something that’s going on in our world,” she says. She doesn’t want anyone to despair over the current state of things. She reminds her clients, “Times of economic uncertainty are cyclical - they don’t last.”
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News coverage of current recession
Government help for small businesses
A timeline of Canadian recession history
10 businesses that thrive in a recession
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