So the S&P downgrade US credit rating. What does that mean? How does it effect small business? I believe it gives Canadian small business good growth opportunities.
According to The Globe and Mail, not only inventors and traders have no confidence, but small business in US also. 88% of US small business expect a recessionary economy. Out of 400 business owners surveyed, 68% believe that the uncertainty will be a challenge to their business, and 36% said that they are not confident about the future of their business.
However, Canadian small business seems to have confident in our economy. According to another report from The Wall Street Journal, our small business don’t seem to worry about the uncertainty of the debt crisis in US and Europe. In fact, I think our confident to the Canadian economy and its proven that the Canadian policies are in a much better shape.
After a few years serving the small business sectors, including myself as a small business owner, I found that not too many small business owners care about finance and understand how the overall economic climate impact their small business. Maybe it is due to lack of financial educations, or we are just too busy worrying about the daily operations stay afloat. But as we all know, the economy does affect our business however small our business is.
Instead of panic by the news, small business can take advantage of this opportunities.
First, debt issues. Canada also has deficit, in fact we have just a little over 1 trillion in debt. This crisis is getting everybody to talk about debt, it is like a wake up call to everyone to take control on the debt and use debt wisely. It is time to plan ahead financially.
Second is team building. One of our job as business owners are to create jobs. Our previous Prime Minster Paul Marin, who had successfully restored our rating from AA+ to AAA in 1994 while he was our finance minister, believes that “We should be able to attract the best and brightest into our industries better than ewe ever have before, simply because of what’s going on in other countries.” Talents follow countries who have opportunities and can sustain a living. Other countries lack of job opportunities mean that talents will need to seek jobs somewhere else. Unemployment rate goes up means that you can hire better talented people for a cheaper price.
Third, we can see already that Canadian dollars can buy more US currency now, it is a good thing to purchase products and services in USD. Decrease in confident in the US means that their currency value will decrease in response to the market.
Forth, according to our current finance minister, Jim Flaherty, said that we will properly be effected by the US downturn, but Canada is “well-positioned to withstand stock-market turmoil”. That means while everybody else from other countries are reforming their policies, we are one step ahead already.