Article

Small Business Pulse: Small Business Market Strengthens

Business Starts

Historically, March has been the busiest month for business starts and March 2012 continued this trend. A total of 5,261 businesses registered this March, an increase of 566; although this is less than last year’s increase of 697. In a recent Statistics Canada report on Canadian business starts, 99% of these businesses had fewer than 50 employees they key definition of a small business.

Incorporations, sole proprietorships, and partnerships increased in March while extra provincial incorporations declined. Since the majority of those businesses were corporations, it’s no surprise that they also reported the largest increase, of 381 to reach 2,704 registrations.  Sole proprietorships increased by 154 to reach 1,986, while partnerships rose by 50 to 340 registrations. Extra provincial incorporations declined by 19 to 231.

A total of 55,598 businesses were registered over the last twelve months, down 700 from the previous period. On average, 4,633 BC businesses started each month over the April-March period.

Business Bankruptcies

For the second time in the last twelve months, BC reported the lowest number of business bankruptcies in 30 years. There were just 8 BC business bankruptcies in November, 12 less than the previous month.

BC bankruptcies over the last 12 months continue to be lower than the previous 12 months, 22% lower. There were 185 bankruptcies in 2010/2011 compared to 236 in 2009/10.

Looking back at the last 30 years we can see that BC’s bankruptcies reached their maximum in March of 1984, with 157 businesses closing their doors in just one month. Skipping forward to present time, the lowest number of bankruptcies has come twice in the last 12 months. The following chart maps the trend for BC monthly business bankruptcies. Since the emergence of the online era around 2000, bankruptcies have trended down to record low levels.

BC’s Small Business Hot Sectors

The greatest growth in the number of BC small businesses in 2011 came from the Real Estate, Rental, and Leasing sector, where 1,137 small businesses were added. The Finance and Insurance sector reported the second largest number of 767, while Agriculture, Fishing, Forestry, and Hunting was third with 393.

Metro Vancouver contributed the majority (646) of the small real estate, rental, and leasing businesses in 2011 while Metro Victoria added 47. These two communities represented 74% of the increase in small real estate, rental, and leasing businesses. Smaller communities reporting increases for this sector include Abbotsford 38, Vernon 23, and Powell River 17. Business types within this sector include: lessors of residential and non-residential buildings, real estate agents, brokers, and property managers.

Metro Vancouver and Victoria reported the largest increase in small finance and insurance businesses in BC. Vancouver reported 530 more of these small businesses while there were 57 more in Victoria, a combined total of 84% of those communities that reported increases. Smaller communities reporting increases include: Penticton, Vernon, and Abbotsford with an increase of 15 more of these businesses while there were 13 more in Chilliwack and 12 more in Kelowna. Business types for this sector include banks, mortgage brokers, investment companies, financial  planners, and intermediaries.