Expert: small businesses online growth hampered by uncertainty and insecurity

A persistently cautious consumer combined with a world of business unknowns are leaving many small businesses across Canada in a troublesome position // By Sean Tarry

It’snot easy to run a small business, on the best of days. And – take it from many who are currently trying – it’s next to impossible when dealing with the string of challenges that retail entrepreneurs are faced with today. From a sluggish economy and increased costs to a severely pessimistic and disillusioned consumer, small business owners have got to contend with headwinds coming from multiple directions in order to sustain their livelihoods. And, according to David Nagy, digital pioneer and Founder of eCommerce Canada, they are headwinds that are really beginning to take their toll on small business owners operating across the country.

“Small businesses in Canada are really feeling that paralysis of uncertainty,” he says. “Many don’t know where to invest, and so they aren’t investing. They don’t know who to hire, what to hire for in order to find success. And, there isn’t a whole lot of confidence in the consumer today, either. Nobody believes that they should be out there spending money on things, because, for most, it doesn’t seem to make a bunch of sense at the moment. Consumers today seem to be holding their cards pretty close to their chests, remaining extremely cautious about what they spend their money on. Real estate is down, as are vehicle sales, from traditional numbers. These are massive market indicators with impacts that tend to trickle down to shopping centres and Main Street retailers.”

Challenge and struggle

Nagy goes on to recognize other areas like hospitality that have been struggling, particularly those operating restaurants. Having just endured a Summer that did not live up to the season’s historical performance, the plight of the restauranteur provides a painful reminder of the turbulent and tenuous times in which we’re living, and also serves as another stark reflection of a recoiled consumer. It’s a hesitance to spend that the industry expert says is resulting in a bit of a conundrum for most small business owners.

“Whether the weak economy is more a perception than a reality or not, it certainly doesn’t seem good to most,” he asserts. “As a result, consumers aren’t buying anything, online or in-store. They aren’t investing in anything. And so, small

Control what you can control

business owners aren’t investing in anything, either, because they have no idea what their return is going to look like. And there is certainly more competition than there is opportunities, and so most businesses have ended up with far more supply than they have demand. It’s not a favourable situation for them to be in. They’re running at a deficit, scrambling to find new business where there just doesn’t seem to be any, often resorting to discounting and making exuberant offers. It’s all hampering the efforts of small businesses to sustain their operations, never mind grow their online business.”

Control what you can control

In light of the current economic climate and industry landscape, Nagy suggests that small businesses have just got to put their heads down and power through this difficult period. He underscores the special kind of character that’s required to run a small business in Canada – one of toughness with the ability to adapt and respond on the fly, and to be resilient in the midst of hardship – believing that it’s these qualities that will see them through the storm, leading them once more toward a trajectory of success and growth.

“At the moment, it’s probably best that small businesses control what they can control,” says Nagy. “It’s always important to do so, but has perhaps never been more critical to the health of an operation. And, it’s also not a bad idea at all for small businesses to hold back when it comes to investment. Considering everything happening around us, it’s a rational decision and one that makes a lot of sense right now for most. For the few, it might be a good idea to invest against the grain and double down on the areas of the business that they’re investing in and growing. But, conditions aren’t really favourable at the moment in terms of taking risks.”

Awaiting the opportunity

Nagy continues by acknowledging that it can be incredibly difficult for small business owners

who may feel as though they’re stuck in a rut and unable to grow amid increasing competition. But, he offers that despite all of the admirable qualities that small business owners possess, patience may be the most important to leverage at the moment in order to weather the current negative impacts, preparing themselves for more moderate economic and market climes.

“Sometimes everyone just needs to wait for the pendulum to swing back,” he says. “And this is one of those times. We’ve got to wait patiently for consumer confidence to bounce back and for them to start spending again, allowing sales to bounce back. This is opposed to spending $100,000 in an effort to solve a challenge that can’t be solved with investment. Patience, and taking the opportunity to step back a bit to evaluate the parts of the business that are working and those that need attention, will be key while waiting for the opportunities to return.”

Return of investment

Despite the bleak nature of Nagy’s analysis, he says that he’s been in and around the retail and ecommerce industries long enough to know that it’s only a matter of time before that pendulum will eventually swing back. And when it does, those across the country who have withstood this brutal period will come out of it stronger and more determined than ever to succeed and contoinue to make a difference in their communities.

“Small businesses are the backbone to the communities that they operate in. There’s no question about that. And I’m sure that when the time is right - when consumer confidence is boosted and sales begin to return – Canadian small business owners will be more eager than ever to invest and innovate in order to improve their services and offerings and enhance their relationship with their consumer, both in-store and online.”