Canadian small businesses: 10 surprising facts

At Swoop we know all about small businesses – do you?

Whether you’re a regular at your local mom-and-pop bodega, have a favorite neighborhood restaurant or your kids attend a nearby nursery, chances are that small businesses are part of your life (you might work or run one yourself). 

What is an SME?

The economy thrives on small and medium-sized enterprises (SMEs – sometimes called small and medium businesses, or SMBs). Canada’s economic success is fueled by its small but mighty businesses! With SMEs representing a whopping 99.8 percent of all enterprises in the country, they’re the rocket fuel in the tank of Canada’s prosperity.

At Swoop, we know SMEs pretty well. But how many of our facts about SMEs do you know?

1. There are over a million SMEs in Canada

That’s about one business per 30 Canadians. If you don’t work in one, know someone who works in one or know someone who owns one… how?

2. SMEs are responsible for the majority of Canadian exports

Canadian SMEs are ambassadors for our country around the world: SMEs produce 43 percent of all of Canada’s exported goods. In 2020, a massive 48,325 Canadian businesses exported – and 97.5 percent of those businesses were SMEs.  

3. SMEs have created over 10 million jobs in Canada

If you have a job, it’s likely with an SME: small and medium-sized businesses employ 88.3 percent of Canada’s private labor force.

4. More than 50 percent of SMEs have fewer than four employees

Over half of Canadian businesses are micro enterprises – that is, they have fewer than four employees (55 percent of businesses fit this description). Businesses that have fewer than 10 employees make up 74 percent of all Canadian businesses.

5. Most SME-populated industries

Professional, scientific and technical services have the most SMEs (151,407) across both goods-producing sectors and the service-producing sectors. More than 99% of businesses in this knowledge and skill-based sector have fewer than 500 employees. In other words, SMEs dominate the sector that requires a high degree of expertise and training.

6. Male-female-led SMEs have the highest survival rates

Which businesses are still running a full decade after they were started? Female-owned businesses have a survival rate of 58 percent at the ten-year mark, while male-owned businesses have a survival rate of 62 percent. The highest rate of 69 percent occurs in equally-owned businesses. Top tip: always ask your spouse if they are “in”.

7. COVID-19 hit SMEs harder than big businesses

SMEs are great – but they are vulnerable, as we found out during the COVID-19 pandemic: SMEs were responsible for 92 percent of net employment change between 2019 and 2020. In other words, most of the job losses caused by the pandemic occurred in small and medium-sized businesses.

8. Some sectors are growing fast

Don’t think that SMEs stay small forever: three sectors have a high incidence of growth, with businesses employing at least 10 people and seeing growth in revenue or employee numbers of 20 percent or more per year, over three consecutive years. 

Which sectors are showing this kind of growth?

• Administrative and support, waste management and remediation services.
• Mining, quarrying, and oil and gas extraction.
• Information and cultural industries such as data processing and hosting, and services related to information processing.

9. Most businesses are still open on their fifth birthday

It’s no secret that starting a business takes a lot of hard work, but it’s more likely than not to pay off: if you start a business today, there is a 67.9 percent chance it will still be running in five years time. 

10. Goods-producing SMEs are more stable than services… but only just

There isn’t really much in it, but if you’re producing goods, your business has a 49.6 percent chance of still operating in ten years. If you’re producing a service, you’ll lose a few percentage points: 44.6% percent of service businesses reach the same landmark.