News Releases

American Express Small Business Monitor finds 55 per cent of small
    business owners have been forced to accelerate innovation efforts to
    defend against downturnMARKHAM, ON, July 9 /CNW/ - The latest in a series of Small Business
Monitor studies by American Express shows Canadian small business owners are
refusing to back down in the face of recession. While more than half of small
business owners say they are experiencing a slowdown in their business,
including 21 per cent who characterize that slowdown as "significant", they
are fighting back by investing in new ideas to be stronger and more
competitive.
    The quarterly American Express Small Business Monitor, published today,
reveals while 56 per cent of small business owners surveyed are experiencing a
downturn in their business, nearly the same number, 55 per cent, report that
they have accelerated their innovation efforts. Instead of preserving precious
cash, small business owners are investing in improving product designs and
developing new offerings to capitalize on opportunities. It's a prime example
of the bullish determination that has shown through since the first Monitor
survey last fall.
    "Small business owners don't hide during difficult times - toughness and
resilience is in their DNA," said Howard Grosfield, VP & General Manager,
Small Business Services, American Express Canada & International. "They never
take their eye off the future and what it will take for them to come out on
top."
    Grosfield also observes that the approach that many seem to be taking is
to make sure that they are best positioned to stay ahead of their competition
and maintain a competitive advantage despite the environmental circumstances.Nearly Half of Small Businesses in Canada Are Making Research and
    Innovation a PriorityRather than passively awaiting an economic turnaround, small business
owners are proactively investing in their businesses; 61 per cent of
respondents say they have earmarked a portion of company revenues for
innovation this year, while 48 per cent have made it a "high" or "top"
priority.
    Small business owners see innovation as a key ingredient to
competitiveness, and expect that their investments will make them more
profitable (90%), better able to attract new customers (87%), and will improve
their product offering (87%).
    So given the economic downturn, how are small businesses financing these
investments? Two-thirds are reinvesting revenue (66%), 20 per cent are using
credit cards, charge cards or bank loans, and more than a third (32%) report
they are dipping into their personal reserves to give their business an extra
edge.
    "Small businesses owners continue to dig into their own pockets during
this downturn," Grosfield said. "In our last Monitor we saw small business
owners continuing to pay bonuses to employees while foregoing their own
salaries, and now we see they are also financing new initiatives from their
personal funds. It's a telling illustration of their dedication."
    Nonetheless, many of them don't feel they are adequately supported in
their innovation efforts. Of the Canadian small business owners surveyed, 87
per cent think that the financial industry should be doing more, roughly 80
per cent think the federal (82%) and provincial (81%) governments should be
doing more, and 80 per cent want more support from their own industry
associations.

    American Express Small Business Index Static at C- but Stress Decreasing

    Overall the confidence level of small business owners is showing little
change. The American Express Small Business Index held steady at a C- grade,
or 62 per cent versus 61 per cent in the first quarter. The Index is based on
a series of measures designed to gauge confidence, performance and attitudes
and tracks the overall business environment small business owners believe they
are operating in. The C- grade is encouraging as it shows the mood among
business owners has not worsened and reflects a belief that better days are on
the horizon.
    This is despite the fact that more than half of those surveyed report a
downturn in their business (56%) - an increase from 52% in the first quarter.
Businesses in the West appear hardest hit with 62 per cent in Alberta and B.C.
reporting a downturn. The Prairies and Atlantic Canada appear to be fairing
the best (41 per cent and 40 per cent reporting a downturn, respectively). In
Ontario, 55 per cent of businesses are reporting a downturn, while in Quebec
the proportion is 58 per cent.
    However, when small business owners look past today's difficult
environment to the future, their perennial optimism shines through. When asked
about their company's future financial position, respondents (44%) are hopeful
revenue and profit are poised to climb, up from 40 per cent in the first
quarter.
    Regionally, small business owners in the Prairies are the most confident,
with 83 per cent saying they are confident about their business prospects over
the next six months. In B.C. 77% are confident about the next six months
followed by Ontario (74%), Alberta and Quebec (72%), and the Atlantic
provinces (71%).
    Small business owners today are also feeling less stress about the
recession than they were three months ago. Those stating that the state of the
economy was causing them stress fell to 59 per cent from 67 per cent three
months ago.
    "While we have yet to see an end to the recession, the mood among small
business owners seems to be on the cusp of better days," Grosfield said.
"Overall what our Monitor research is showing are slight but perceptible
improvements in outlook, stress levels and confidence. But true to their
nature, they are not standing by waiting for a recovery to happen. They
continue to look for ways to be part of the solution."

    About the American Express Small Business Monitor

    From June 5 to June 10, 2009, Angus Reid Strategies conducted an online
survey on behalf of American Express Small Business Services among a randomly
selected, representative sample of 500 Canadian small business owners who
currently have two to 100 employees. The margin of error for the total sample
is +/- 4.4%, 19 times out of 20. The results have been statistically weighted
according to the Statistics Canada Business Register's most current business
size and region data to ensure a representative sample of the entire
population of small business owners in Canada. Discrepancies in or between
totals are due to rounding.

    About American Express Small Business Services

    American Express Small Business Services (SBS) is dedicated exclusively
to the success of small business owners and their companies. SBS supports
business owners with exceptional service. With tailored products and services,
the team delivers purchasing power, flexibility, control and rewards to help
customers run their business. Specifically, business owners can leverage an
enhanced set of products, tools, services and savings, including charge and
credit cards, robust online account management capabilities and savings on
business services from an expanded lineup of partners. To obtain more
information about SBS visit www.americanexpress.ca/smallbusiness.

    About American Express in Canada

    American Express in Canada operates as Amex Bank of Canada and Amex
Canada Inc. Both are wholly owned subsidiaries of the New York based American
Express Travel Related Services Company, Inc., the largest operating unit of
the American Express Company. Amex Bank of Canada is the issuer of American
Express Cards in Canada. Amex Canada Inc. operates the Corporate Travel,
Travel Services Network and Travellers Cheques divisions in Canada. American
Express opened its first offices in Toronto and Hamilton in 1853 and now
employs 3,700 Canadians coast-to-coast.