Canadian Underwriter

Small Opportunities

November 30, 2011  

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Daryl Angier

October is Small Business Month in Canada. It’s a little unfortunate that this celebration of entrepreneurship happens at the same time as the equally-worthy-of-attention Breast Cancer Awareness Month, as the latter cause tends to get the lion’s share of attention in the press (with good reason). However, given how important small-to-medium-sized businesses (SMBs) are to the Canadian economy and the lives of working Canadians, SMBs could do with a little more love.

If you think, for example, about how Canadian society is often described by right-wing pundits in the US—as a quasi socialist state characterized by big-government entitlement programs and intrusive intervention in the economy—it doesn’t take more than a quick review of the statistics around small businesses in this country to explode these myths. According to Industry Canada, fully 98% of Canadian businesses can be classified as small (elastically defined as having between 50 and 100 employees), employing almost half of the country’s labour force.

Indeed, I’d like to think that Canadians’ strong entrepreneurial spirit and diverse business mix is helping the nation weather the current economic uncertainties better than the US and other G8 nations. To be sure, Canada’s wealth of natural resources deserves more of the credit for our economic resilience. Even during the downturn, the US still needs our oil while China and India still need our mineral resources to fuel their manufacturing sectors. But even Canada’s natural resource industries rely heavily on the work of numerous small operations and freelance contractors to keep them humming efficiently and affordably.

For brokers looking to profit from the SMB space, one of the main challenges lies in resource allocation. Premiums for SMBs are usually low and clients often don’t require a great deal of advice. For these reasons, it’s easy to give these customers short shrift and pay less attention to the basics of prospecting and retention. But as Steve Sache, the subject of our cover story this month, has demonstrated, it is possible to build a profitable and growing practice targeting SMBs by appealing to the values of the small entrepreneur and understanding their biggest challenge: cash flow.

Despite recent economic woes, confidence among small business owners remains high. A recent survey by TD Canada Trust reveals that as many as 13% believe 2012 will be their best year yet. For brokers looking for new opportunities in the new year, they might want to set their sightlines a little lower on the horizon.


Copyright 2011 Rogers Publishing Ltd. This article first appeared in the October 2011 edition of Canadian Insurance Top Broker magazine.

This story was originally published by Canadian Insurance Top Broker.