During the past week there has been a strong upward pressure on the loonie driven primarily by strength in commodity and equity markets.
It is a double-edged sword. On the positive side, the Canadian economy, which remained relatively stable throughout the economic downturn, is now showing signs of growth and has a plethora of resources, which are in great demand by developing nations.
However, as good as these signs may be for Canada, the positive trends may not translate into growth for small to medium sized businesses that have survived these turbulent 18 months. There are a couple of main reasons for this:
- The cost of financing will increase due to higher expected interest rates
- Exporting will become less competitive as the Canadian dollar strengthens
Due to these challenges, the focus for small business needs to be on productivity!
Timing is everything. While interest rates are still low, greater emphasis needs to be placed now on productivity improvements, which have been sorely lacking in this country.
I encourage all business leaders to take a look at the market signals, analyze how it will affect the road ahead and decide what can be done now to improve business in the future. It is a constant process.
Ken is the acting CFO for K&K Recycling Services, a Pickering, Ontario-based ferrous and non-ferrous scrap metal processing, brokering and recycling company operating in Canada and the United States. He is also a founding partner of Growth Equity Partners whose focus has been to support small to medium-sized private and publicly listed companies execute transformational business initiatives since 2001. Visit www.growthequitypartners.com