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Sage Financial Literacy Survey Reveals That Canadian Small Business Continues To Struggle To Identify Key Costs

sage [1]Coinciding with Small Business Week [2], Sage [1] today released the findings of a survey of more than 500 Canadian small business owners to determine ‘financial literacy,’ by gauging the overall perceptions, knowledge and habits of small business owners with regard to financial management, resources and compliance. Conducted by Angus Reid Public Opinion on behalf of Sage’s Simply Accounting [3] business, the survey succeeds a 2009 study also focusing on financial literacy.

The 17-question survey reveals that small businesses continue to struggle to identify the cost that affects their business the most. Among the 503 participants nationwide, 23 per cent responded they have yet to identify the cost that has the biggest impact on their business. Smaller businesses are more likely than bigger companies to have this issue.

“Although the economy is recovering and small businesses are slowly regaining confidence in their business prospects, as revealed by our recent Sage Global Business Index [4] survey, Canadian small business owners continue to struggle with certain aspects of the financial management of their business, especially businesses with five or less employees,” said Nancy Harris, vice president and general manager at Sage Simply Accounting. “As a leading service and product provider to this business community, we know their pain points well. We recently released Sage Simply Accounting 2012 [5], which was developed based on years of customer and partner feedback, to help small businesses gain better insight into the overall financial health of their business to manage their cash flow, costs and inventory.”

The survey results show there is a strong correlation between size of business and financial literacy.

“While we cannot make a direct correlation, the survey shows a relationship between the size of a business and degree of financial literacy,” said Jaideep Murkerji, Managing Director of Public Affairs, for Angus Reid Public Opinion. “Whether more financially literate business owners are inherently more likely to succeed in growing their business or having a larger business necessitates greater financial literacy, the parallel between size and financial literacy crops up repeatedly throughout the study.”

The survey reveals that over the past two years small business owners have increased their use of technology to handle the financial management of their business, both as a resource and as a tool. Small businesses are more likely to consult online resources, blogs or social media for advice now compared to 2009 (41% versus 35%), and less likely to turn to others in the same industry or former employers (27% versus 33%). Small business owners in Ontario are the most likely to use online resources (45%) while those in Western Canada are the least likely (36%). Additionally, 25 per cent of small business owners use mobile technology to manage their business-related activities with mobile online banking (79%) being the predominant activity.

Other highlights of the small business survey include:

The survey was conducted May 17-23, 2011 and its results have a margin of error of plus or minus 4.4%, 19 times out of 20.