Biggest barriers to business growth

The three primary barriers to short-term growth, according to the survey, are:

  • Challenging economic climate: 42%
  • Competition in the industry: 36%
  • Consumers purchasing less: 32%

However, this new report identifies that some of the challenges faced by Canadian businesses have less to do with external factors and more to do with confidence and communication. Almost half of respondents identify acquiring new customers as a significant challenge in expanding their online presence; however, 33% report difficulties boosting customer conversion rates, while 24% grapple with cash flow management.

Another growing concern is with online risks. Cybersecurity incidents increased nearly 25% since 2023, yet nearly half of the businesses surveyed reported a lack of preparedness and confidence in their ability to protect their business and customers from fraudulent transactions. Another 43% of businesses also worry about their ability to manage and protect customer information online.

Not unsurprising, two-thirds of small business owners (66%) confessed that setting up a business was more complicated than they initially thought. Moreover, one in five are unsure of which payment options to offer, including whether or not to offer a range of digital wallets or payment instalment options.

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How small and mid-size business plans to grow in the future

Digital transformation was top of mind, with 70% of SMEs convinced that investing in technology and AI skills is essential to future growth. Additionally, 51% are planning to ramp up sales efforts through online and social media channels to help foster future business growth. Other targeted areas for investment include online marketplaces (39%), international sales expansion (28%), and reinforcing online security and payment methods (17%).

Part of the plan for many SMEs is to consider customers outside of Canadian borders. Almost half (42%) are looking globally and anticipate an uptick in international sales in 2024. Perhaps this increased interest in attractive international clients comes from the experience of a world that turned to digital and online solutions due to pandemic restrictions. As a result, 40% of SMEs in Canada reported that cross-border sales helped contribute to revenue growth in the past year.

To help SMEs reach their potential, PayPal has introduced a new offering, which according to Prabhu, is intended to "foster growth, provide advanced fraud protection and streamline cross-border trade, empowering entrepreneurs to thrive."

PayPal’s report surveyed 500 small business owners across Canada.

Survey methodology

PayPal's 2024 Business of Change Report interviewed 500 Canadian small and mid-size business owners. The online poll was conducted by OnePoll in April 2024.

Sources

1. Paypal: Business of Change report (2024)

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Nicholas completed his master's in journalism and communications at Western University. Since then, he's worked as a reporter at the Financial Post, Healthing.ca, Sustainable Biz Canada and more. Aside from reporting, he also has experience in web production, social media management, photography and video production. His work can also be found in the Toronto Star, Yahoo Finance Canada, Electric Autonomy Canada and Exclaim among others.

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