Role Of Smes In The Canadian Economy

Conclusion

Representing about 99 percent of Canadian businesses, SMEs play a critical role in the Canadian economy. While SMEs have many social and environmental goals and responsibilities, the primary operating objectives of all for profit business owners are to sell products/services, generate profits, operate efficiently, earn acceptable returns on their investments, and control against risks.

Businesses cannot survive for a long time if all of these objectives are not met, particularly if they are not selling products/services and earning sufficient profits. Profits represent the primary source of income and means of livelihood for many entrepreneurs and their families. Sales revenues are needed to cover the costs of the business, buy

Businesses achieving higher asset turnover ratios are run more productively than businesses achieving lower asset turnover ratios. Higher asset turnover ratios provide a general signal about the operating efficiency of businesses and hints at their capacity to generate profits in the future. The underlying returns on investment are the final monetary rewards entrepreneurs receive for investing their savings, time, and energy into their businesses. It is this reward that motivates entrepreneurs, rewards them for taking on debt and bearing the financial risks of bankruptcy, and drives them forward to achieve even greater levels of success.

All that said, sales, profits, operating efficiency, returns and risk are important dimensions of businesses and, as such, it is important for government to monitor how SMEs are performing along each of these dimensions. Also, given the importance of SMEs to economic growth and job creation, supporting the operating and financial success of SMEs is a necessary policy concern.

The information presented in this report provided a historical assessment of the operating and financial performance of Canadian SMEs and the causal relationships between variables and should be useful for policymakers and economists involved in policy and strategy

• In 2010, Quebec had the highest proportion of majority-owned female SMEs (small and medium-sized enterprise) at 19 percent, followed by Atlantic Canada, Ontario, and then the Prairies and British Columbia.

• 47% are SME's were entirely or partly owned by women.

• The proportion of women-owned businesses that plan to expand their business is generally higher than men.

• Approximately 51% of Aboriginal-owned SMEs belong partly or wholly to women.

• Among established businesses (non-start-ups), the percentage of female entrepreneurs rose from 27% in the early 1990s to 33% in 2012.

• The average net profit before tax of female-owned businesses has increased from 52% of male-owned business profits in 2000 to 89% in 2007.

• Majority female-owned firms with growth intentions are significantly more active in hiring new employees than majority male-owned firms.

• Majority women-owned SMEs represented over $117 billion per annum of economic activity in Canada.

• A greater concentration of women-run SMEs is present in certain sectors, such as professional services, accommodation, and food