This information is from the 2022 KPMG Business Outlook survey. More current results are available in the most recent KPMG Private Enterprise Business survey.

Canada's small to medium-sized businesses (SMBs) are bracing for economic disruptions. But after years of navigating a global pandemic, many are well versed in staying resilient.

This enduring resilience is among the main themes from KPMG's 2022 SMB Business Outlook Survey, which reveals SMB leaders are slightly anxious about their immediate future but taking steps to stay the course.

A recession may be on their short-term radar, but SMBs are nonetheless hopeful about their long-term prospects. A sizable majority (83%) say they are optimistic about their company's growth over the next three years, with 82% feeling the same about their industry or sector. At the same time, it's worth noting that SMBs share a healthy – albeit slightly less – degree of confidence in the Canadian economy's growth (78%).

Interestingly, SMBs' overall confidence levels fall short of those displayed by leaders of Canada’s largest organizations in our 2022 CEO Outlook survey. Rather than chalking it up to pessimism, however, it is more likely that SMBs were more exposed to pandemic business disruptions and are now slightly more cautious as they brave ahead.


83% of SMB leaders are confident in their company’s growth over the next three years


66% of SMB leaders believe there will be a recession in the next 12 months, yet 52% believe it will be mild and short

Obstacles ahead

Small to medium-sized businesses may possess a healthy long-term outlook, but they are nonetheless wise to the short-term obstacles in their path. Findings show that SMB leaders view rising interest rates as their top-most threat to growth in the coming years, followed by the heightened cybersecurity risks that have arisen as part of their digital transformations (e.g., e-commerce, remote work, automation, etc.).

Greatest threats to growth over the next three years

Preparing for the storm

The prospect of facing another period of economic disruption has SMB owners building on the lessons they learned throughout the pandemic. And indeed, according to survey respondents, a majority have - or plan to – make more moves to prepare for a potential recession over the next six months, in addition to the steps they've already taken. Top strategies include boosting productivity (85%), identifying inefficiencies and unnecessary complexities in their operating model (83%), or managing costs by increasing prices (82%).

Whatever the move, SMBs are taking pre-emptive steps informed by recent experiences. And while it is worthwhile exploring ways to reduce costs, unlock efficiencies, and become more agile in light of fluctuating economic conditions, it is also important to take a measured response to short-term economic pain and continue with the core strategies and investments that have been working. Taking proactive steps against an incoming recession is good business, but overreactions may have adverse effects if difficult times persist.

Growth from within

Organic growth appears to be the way forward for many SMB leaders, at least until conditions clear. With this in mind, it's promising to see that a healthy portion of SMB leaders (41%) have already re-evaluated their operational models for efficiencies, enhancements, or other initiatives that will strengthen their organization and supply chains, and 42% plan to follow suit in the next six months.

Single most important growth strategy over the next three years

Digital transformation appears to be a driver for that organic growth. A good majority (69%) believe they will lose their competitive edge if they don't invest in digital technologies (e.g., data and analytics, AI, intelligent automation, etc.).

At the same time, they're acutely aware that staying in business means keeping speed with e-commerce trends, remote work dynamics, and multi-channel customer experiences. True, investments in digital and technology don't come cheap, but the bulk of Canadian SMBs acknowledge that digital transformations – and the required talent upskilling – will unlock new efficiencies, deeper data insights, and stronger customer connections.

Of course, with digital transformation comes cybersecurity risks. Every new system, online service, and or cutting-edge technology exposes organizations to new cyber threats and threat actors. And in an age where trust in data privacy and security are at their peak among customers, there is little room for failure.

Canadian SMBs recognize the criticality of cybersecurity. Nearly 8 in 10 (78%) agree that building a cybersecurity culture is just as important as building technological controls. As they develop and enhance that culture, it will be important to remember that employee training and upskilling are as essential to cybersecurity as any control or technology.


67% of SMB leaders are aware that their cyber defenses could be stronger regarding the processes, systems, and employee training that keep their IT infrastructure secure

Technology and talent

Access to talent remains a barrier for SMB growth, especially as a majority plan to expand their headcount by up to 10% in the coming years. Recognizing this, some are turning to technologies such as AI or automation to offset their labour demands. This strategy can prove beneficial, but it does not alleviate the need for people with the skills and willingness to make full and ongoing use of these investments.

Continuing the ESG journey

SMBs have not lost focus on their environmental, social, and governance (ESG) ambitions. Efforts to move the dial on all three pillars are still being made across retailers, restaurants, salons, and businesses of every stripe. Nevertheless, the fact that 54% are struggling to tell a compelling ESG story and nearly a third don’t have an ESG strategy speaks to the need for more guidance and support to see their journeys through.

Passing along the business

Succession is on the minds of SMB leaders and family-owned businesses alike. At last check, 72% of all SMB leaders and 78% of family-owned businesses are planning to develop a succession plan or are taking steps to pass leadership to the next generation over the next three years – a transition that may in fact accelerate as a result of the pandemic and growing retirement numbers.

Succession planning is part of the natural order for SMBs and family-run businesses. Still, this time around it will be interesting to watch how demographic shifts in leadership will change the SMB landscape, especially as younger CEOs take the reins.


74% of SMB leaders are investing in developing their workforce skills and capabilities

Get ready for what’s ahead

The near future will test SMBs’ resiliency, but the struggle is nothing new. Taking cues from the pandemic, many small to medium-sized business leaders are using this time to upskill and enhance their teams and operations to weather the short-term economic storm and come out steering towards longer-term growth.

Key actions

  • Keep doing what works: Continue putting time, effort, and talent towards optimizing the changes and investments you've already been making. At the same time, don't lose sight of strategies that generate growth.
  • Learn from the past: Leverage the lessons learned over the few years to stay resilient and adapt to the disruptions in your path. The pandemic imparted its share of insights when it comes to managing supply chain disruptions, realigning cost structures, and reducing expenses, and now is the time to draw on them.
  • Prioritize future proofing: Staying competitive will require a workforce trained and adept in embracing the changes, challenges, and digital transformations. It will also mean putting in the time and resources to develop a compelling ESG story, and being ready with the processes, talent, and technologies to evolve with your customers. With change comes opportunities, but SMB leaders need to be ready to act.
  • Upskill your talent: Organic growth rests on people. Use this moment to build your team and/or upskill the people in your roster to extract full benefit from your business investments and strategies. Similarly, prepare your team to take advantage of new and emerging technologies, and protect against a growing cyber threat landscape. At the end of the day, your people are your first line of defense.
  • Prepare for the next generation: Start developing a plan for mentoring and growing the next generation of leaders and putting plans in place for a transition.

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