Ask a small business owner if he has done any productivity benchmarking and the odds are the answer is no.
In fact, less than half of Canadian small to mid-sized businesses formally measure their productivity. And of those that do, only 6 per cent adopt formal comprehensive metrics and compare themselves to their peers, new research from BDC shows. Yet eight in 10 entrepreneurs believe it‚Äôs important to measure and benchmark productivity.
Some might think it‚Äôs a lot of time and effort for little gain. Others may simply not know the ins and outs of a proper benchmarking exercise. But benchmarking is well worth the effort, because BDC‚Äôs research shows one in three companies that do formally measure their productivity expect to see 10 per cent or more annual growth for three years, the report noted.
This could explain why Canadian SMBs have been relatively less productive than their U.S. counterparts for some time now. Productivity at small and mid-sized businesses in Canada is 47 per cent of productivity at large businesses active in Canada. In the U.S., statistics show that figure is 67 per cent.
‚ÄúThe productivity gap between Canada and U.S. just keeps getting bigger,‚ÄĚ said Pierre Cl√©roux, BDC‚Äôs chief economist. ‚ÄúOne reason is that while we have skilled workers, businesses are not investing in technology as much as they should. For example, Canadian businesses invest 56 per cent of what U.S. companies do in information and communications technologies.‚ÄĚ
Even those that do invest are not changing processes, and thus not maximizing the benefits of the technology, he added. ‚ÄúIf you‚Äôre not efficient, you are leaving money on the table and are not as profitable as you could be. Measuring productivity and comparing your performance levels to those of your industry peers is critical for boosting efficiency and profitability.‚ÄĚ
To kick off BDC Small Business Week 2016, the bank launched Canada‚Äôs first business productivity benchmarking tool. The easy-to-use, free online tool was designed to help small family-owned businesses to companies with +500 employees measure their productivity against a database of 60,000 Canadian companies at a click of a button.
Companies can benchmark their productivity against five key indicators: overall efficiency, revenue per employee, profit per employee, labour and capital.
Cl√©roux stressed that proper metrics allow businesses to pinpoint areas of weakness and work on improvement. ‚ÄúFor a business, productivity improvements ‚ÄĒ whether through training, waste reduction, improved operations, new product development or ICT investment ‚ÄĒ mean more profits and greater competitiveness. For the economy it means a better standard of living for everyone.‚ÄĚ
The study is available at https://www.bdc.ca/productivitystudy
VC funding falls to two-year low
The funding boom seen in 2015 may be over, according to a new report from KPMG and CB Insights. Venture Pulse, a jointly-published quarterly global report on VC trends, shows that investors in VC-backed companies remain cautious in 2016, as major economies continue to face economic uncertainty and startup companies experience a difficult exit environment.
In the lowest quarter of deal funding since Q3 2014, Q3 2016 saw US$24.1 billion invested across 1,983 deals globally, a 14 per cent decline in total quarterly funding.
Funding trended downward across the major venture hubs of North America, Europe, and Asia. Total dollars in North America and Europe fell dramatically, with North America down 18 per cent from the quarter prior to US$14.4 billion, and Europe down 21 per cent to US$2.3 billion.
The number of deals was down in Asia and North America, and up in Europe. Europe also continued to see robust seed-stage activity, while seed deal shares dropped significantly in both North America and Asia. Seed rounds as a share of all global deals fell to 33 per cent.
CB Insights sees this trend as ‚Äúa reset‚ÄĚ following a period where funding levels were irrationally high. ‚ÄúThat was not sustainable or healthy,‚ÄĚ CEO Anand Sanwal, said in a statement.
KPMG expects to see more investments in the automotive, healthcare and fintech sectors later this year and into 2017. Cybersecurity also continues to attract attention from VC investors and is expected to remain a key focus of investment in the near term.
‚ÄúEven as overall numbers trend down, corporations continue to access innovation and outsource R&D by investing in startups,‚ÄĚ Sanwal said. ‚ÄúWe also are continuing to see corporations invest across the funding spectrum not just in more mature later-stage companies but at the early stage, as well. If early stage activity stays weak in North America and Asia, it‚Äôs likely that corporate venture groups may pick up the slack.‚ÄĚ
Time to get serious about credit card security
Accepting credit card payments may be a part of your daily operations that you don‚Äôt think a lot about. Yet businesses are required to follow set standards regardless of their size.
‚ÄúYou want to make sure there are no breaches, or at least minimize the extent of them,‚ÄĚ says Leah White, partner, operational advisory for Grant Thornton in Halifax.
‚ÄúBusinesses can end up on the hook in a lot of different ways, especially if the credit card company finds out you aren‚Äôt complying with security standards. But a lot of smaller businesses don‚Äôt even know if those standards are in place.‚ÄĚ
If an owner is found to be negligent, they could be facing more than the cost of the fraudulent charge. They may also have to shoulder the costs of a forensic investigation, card replacement and possible fines. ‚ÄúNot to mention the cost of fixing the problem, training and upgrading your IT,‚ÄĚ White said.
There‚Äôs also the reputation risk to consider. Even after fixing a breach, you may have lost the trust of your customers, especially online customers. ‚ÄúThat‚Äôs often the biggest ramification,‚ÄĚ she said.
Rather than finding out after the fact you may be at fault for breach, White offers up some simple dos and don‚Äôts to consider:
Don‚Äôt keep information you don‚Äôt need. ‚ÄúThe first question to ask yourself is do you have a business reason to keep it?‚ÄĚ
Don‚Äôt keep credit card numbers beyond an initial transaction.
Don‚Äôt deal with credit card information via email. ‚ÄúThe general rule is if you wouldn‚Äôt write down information on a postcard, then don‚Äôt email it.‚ÄĚ
Don‚Äôt leave credit card data lying around unsecured. ‚ÄúNumbers don‚Äôt always end up in the shredder. Often people don‚Äôt treat the information with the care and value it deserves.
Do ask your third-party providers and vendors if they are compliant with PCI DSS (Payment Card Industry Data Security Standards), including their equipment (e.g. payment terminals), applications and storage practices.
Do keep information only as long as you need it and then destroy it, and safely dispose of paper records with credit card numbers.
Do train your employees and establish policies about handling of credit card information.
Do make sure your technology is reasonably up to date and you understand where your data is at all times.
Do understand what information is being collected and how. ‚ÄúYou may not realize how many ways you are getting information. Understanding the flows will help you manage risk better,‚ÄĚ White said.
First published at http://business.financialpost.com/entrepreneur/small-business-digest/bdc-introduces-first-ever-online-business-productivity-benchmarking-tool