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Success hinges on paying attention to basics: economist

Victoria’s small business community got a wake-up call Tuesday as the Business Development Bank of Canada’s chief economist warned success in business is about paying attention to the fundamentals.
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Business Development Bank of Canada chief economist Pierre Cléroux addresses a Greater Victoria Chamber of Commerce luncheon at the Inn at Laurel Point.

Victoria’s small business community got a wake-up call Tuesday as the Business Development Bank of Canada’s chief economist warned success in business is about paying attention to the fundamentals.

A day after the BDC released a study on the “dos-and-don’ts for business success,” Pierre Cléroux told a Greater Victoria Chamber of Commerce business luncheon the message may be simple, but its impact can be significant.

“These [dos and don’ts] are not complex, but we often forget them because we are so busy in the day-to-day operation of a business,” Cléroux said in an interview. “Consider it a reminder that you need a diversified client base, that you have to take time for a contingency plan.

“To be a small business owner is a journey and you’re always busy, but you have to take some time to make sure you do the basics.”

During a half-hour presentation, Cléroux noted the nationwide study revealed Canada’s most successful businesses do constantly innovate, do ask for outside advice, do have solid short and long-term plans, do hire the best people rather than just who may be available and do build strong relationships with their suppliers.

He also noted those successful business don’t rely on too few customers, don’t underestimate the importance of financial management, don’t avoid contingency plans, don’t ignore their markets and customer patterns and don’t wait until it’s too late to ask for help.

Cléroux emphasized there was nothing groundbreaking in the lists, but he said some firms still overlook the steps in all regions of the country.

He said if there is one common thread that runs through every business in Canada it’s the sense that competition is increasing.

“It’s much more difficult to run a business today than it was 20 years ago,” he said, noting the smaller world we live in is a double-edged sword.

“You may have access to more markets, but on the other side of that you have more people coming into your market.”

Coupled with the fact the country is becoming more entrepreneurial and there are more start-ups established each year, and Cléroux said you have a challenging marketplace.

“The retail sector is a good example. While consumer spending in Canada is almost flat, you still have more retailers selling to the consumer,” he said, with a nod to increased American competition with Target and other big retailers coming to Canada.

He said the west does have a problem the eastern parts of Canada have yet to confront — finding the right people to fill positions.

“But as for the day-to-day management of a business, most companies have the same issues — they are looking for advice and they need to have better plans in place,” he said.

Cléroux added if businesses are to take anything from the study, it’s that the success of a small or medium-sized business comes down to relationships, both within and outside the organization.

“To be a successful entrepreneur today you have to build strong relationships with suppliers, reach out to more experienced entrepreneurs or professionals to get good advice and engage your employees to create a strong positive culture,” he said.

The BDC’s study, released during small business week, also found nearly one in six companies will run into trouble because they lose a single customer; one in four successful businesses has a detailed road map for future growth; and more than 60 per cent successful firms will wait several months or longer to hire the right person for key roles.

aduffy@timescolonist.co