This powerful technology platform – built by BC-based Vision Critical – will allow you to share your views on doing business in BC so we can cut more red tape on your behalf! The MindReader™ platform will help you grow your business – and community.
What is BC MindReader?
- It’s an opt-in BC Business intelligence community—that is over 1500 members strong and projected to grow to 3000 by the end of 2019.
- Our members are CEOs and leaders, entrepreneurs, captains of industry, business owners large and small, and corporate British Columbians.
- Members provide insight into the BC economic landscape and voice concerns and opportunities for BC businesses.
- Data gathered through Mind Reader is contextualized and shared with government. It informs our advocacy efforts and the policy process.
Learn more at: http://www.bcchamber.org/bcmindreader
According to a 1,248 BCMindReader survey, the COVID-19 crisis is deepening for British Columbia businesses:
- Four-in-ten (43%) of those surveyed stating they can only continue to operate for up to three months under current restrictions;
- Businesses temporarily closed, the future is similarly dire, with only half (53%) expecting to reopen once the restrictions are eased on workplace operations;
- While 38% are unsure, and 8% will not reopen.
Revenue declines put wages, rent, and other operational expenses in focus
The pandemic caused immediate steep revenue declines but conditions continue to worsen, as respondents monitor their cash flows and operational expenses.
- Approximately half of all businesses (54% up from 48% in the first survey) state they have experienced revenue decreases of 75% or more while two-thirds (66%) have had revenues drop by 50% or more.
- The top operating cost or expenses were wages (64%) followed by rent (54%), taxes (34%), and goods and supplies (32%).
- The majority of businesses (58%) are spending 10% or more of operating expenses on rent, with 42% spending 20% or more. The proportion of wages or rent as a function of overall costs vary depending on firm size, sector, geography, and other factors.
Government programs have provided some relief, but many still left out
While businesses surveyed are positive about government measures for employees and ensuring supply chains remain open, they are concerned about the speed and scope of programs that support cash flow.
- Just over half of businesses believe the federal government programs announced to date will be helpful once implemented, but they are not helpful for 33% of businesses, primarily because they do not qualify for any programs or provide enough/timely cash flow relief.
- Similarly, one-third of businesses (35%) do not find the provincial programs helpful, for the same reasons as federal programs.
- Businesses with under five employees are least likely (49%) to find federal programs helpful, primarily because they do not qualify.
- Only one-third of businesses (34%) are confident they will qualify for the 75% wage subsidy program, while 21% are unsure.
- Reasons for not qualifying include: do not have employees on payroll (46%), revenue has not declined enough (28%), employees laid off (13%), business shut down (11%), seasonal revenue (11%) and start-up or pre-revenue company (10%).
Many businesses are not confident in their ability to restart or whether consumers will return.
- Key challenges to recovery identified are attracting customers/revenue (79%), having enough operating cash (55%), and rehiring staff (28%).
- If revenue is the key challenge, half of businesses are unsure what percentage of typical sales or revenues will be required to restart their business, with estimates ranging from less than 30% to more than 70%.
The COVID-19 crisis is significantly hurting British Columbia businesses and their employees. In the past two weeks alone, approximately half of the 1,900 businesses surveyed have experienced revenue decreases of 75% or more, while two-thirds have seen revenues drop by 50% or more.
This is according to a survey of the members of the BC Chamber of Commerce and its regional chamber network, the Greater Vancouver Board of Trade, and the Business Council of British Columbia, with the assistance of the Mustel Group. This is the first in a series of bi-weekly pulse checks using the BCMindReader.com platform.
The data paints an ominous picture of what businesses and workers are experiencing now and what they expect to face in the future:
- Nearly one-third are planning to cancel or have had contracts or tenders cancelled, while a quarter will defer or cancel capital projects in the next two weeks.
- Among those laying off staff, on average, organizations have laid off 43 employees. As B.C. businesses tend to be skewed to smaller businesses (less than 20 employees), the median or midpoint is much lower, at five employees.
- More than 50% of businesses are concerned they will be insolvent or not have the fiscal capacity to restart their business.
- Businesses are trying to pivot with 23% increasing efforts towards online, digital, or e-commerce options.
- Businesses tend to expect the economic rebound in their market will be slow (55% versus 14% fast) but a sizable group is unsure (31%).
Individual businesses in B.C. are experiencing the crisis differently, depending on their sector, location of operations, size, exposure to global supply chains, and the impacts of other global market forces.
Opinions are divided on the effectiveness of government support announced to date, especially with respect to measures that support cash flow and to prevent layoffs (note that the 75% wage subsidy was introduced after the survey was launched). This may reflect that while many announcements have been made, funds have not yet been received by businesses or individuals.
When asked what actions the federal government could take to further support business, respondents pointed to the following measures:
- Provide direct payments to affected businesses (56%).
- Immediately reduce rates for EI, company taxes, personal tax, GST, other government imposed levies or charges (42%).
- Ensure that critical supply chains are able to function (32%).
- Ensure that credit markets and the financial system continue to function (33%).
Top recommendations to the B.C. government include:
- Further reduce tax rates and defer payments facing B.C. businesses and households (57%).
- Consider remedies for businesses not able to pay rent in collaboration with property owners and tenants (42%).
- Provide direct support to B.C. industry sectors that are being particularly affected by the pandemic crisis (46%).
The full data:
BC Chamber of Commerce Summary