BUSINESS DEVELOPMENT

The business development section of the survey considered the factors and strategies that impact growth of businesses. These ranged from site considerations to energy sources, technologies implemented, and factors that make a business competitive in its market.

Eighty-three percent of the South Stormont businesses surveyed were single locations with 28% indicating they were home-based businesses. Of the businesses with more than one location 50% indicated other locations outside the municipality but in the county and 50% elsewhere in Ontario.

In South Dundas 81% of the businesses were single locations with 24% being home- based businesses. Of the businesses with more than one location 13% were elsewhere in the municipality, 75% outside the municipality but in the county, 63% indicated other locations elsewhere in Ontario, 25% in another province and 13% outside Canada.

In terms of their business location, 55% of South Stormont business owners/managers were completely satisfied and 35% somewhat satisfied with their current site. Those that were not completely satisfied had the following main concerns: site too small (67%), no opportunity for expansion (56%), business taxes (56%), inconvenient location for customers (28%) and lack of community business support (22%).

Figure 9 – South Stormont Site Concerns 67% 56% 56% 28% 22% Site to small No opportunity for expansion Business taxes

Inconvenient location for customers

Lack of Community business support

In South Dundas 60% of the business owners were completely satisfied with their current site with 33% somewhat satisfied. Their reasons for not being completely satisfied included: lack of availability of skilled labour (31%), no opportunity for expansion (25%), business taxes (25%), site too small (19%) and condition of the building (19%), other (38%).

Thirty-two (32%) of the South Stormont businesses surveyed leased their facility and 88% anticipated no problems renewing their lease. In South Dundas 26% of the businesses leased their business location and one indicated potential problems in renewing their lease.

Figure 10 – South Dundas Site Concerns

31%

25% 25%

19%

19%

Lack of availabilty of skilled labour

No opportunity to expand Business Taxes

Site too small Condition of building

Energy Sources

In an attempt to better understand what energy sources businesses were using, the firms were asked to identify what they were currently using and what they would prefer to use. In South Stormont 97% reported they use electricity/ hydro and 77% use natural gas. When asked what they would prefer to use for energy 7 respondents reported alternative energy sources and 6 indicated wind as a preference to natural gas and hydro/electricity. The main reasons they did not use their preferred energy source were availability (55%), cost of installation (55%) and price (36%).

In South Dundas 100% of the businesses reported they use hydro/electricity and 75% use natural gas. Forty-five percent of the businesses prefer hydro/electricity and 72% prefer natural gas. Like their South Stormont counterparts 8 South Dundas business owners indicated a range of preferred alternatives with cost of installation (29%) and availability (47%) the main reasons for not making changes. Cost of energy is a concern for 60% of the South Stormont businesses and 89% of the South Dundas businesses.

Information and/or assistance with engineering or technical support with respect to energy conservation and efficiency was requested by a total of 51 of the businesses interviewed, 27 in South Stormont and 24 in South Dundas. This appears to be an area where follow up is prudent.

Figure 11 – Energy Uses & Concerns

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Electricity/Hydro Natural Gas Prefer Alternate Availability Cost of Installation Price Energy Price Concern

South Stormont South Dundas

Information Technology

The use of information technology like computers, digital and cell phones and the internet, was prevalent in most businesses in our study. DSL was used by 36%, wireless internet by 36% and dial up by 21% of South Stormont businesses. In South Dundas 39% of the businesses used wireless, 37% DSL and 18% cable for their internet connectivity. Business owners/managers in both townships indicated a preference for wireless internet if available. The use of internet-ready devices such as PDA and pagers was not as prevalent with 9% using PDA and 9% using pagers in South Stormont and 8% using PDA and 19% using pagers in South Dundas reporting their use.

In both townships the most popular Internet uses were e-mail and business websites. In South Stormont 97% use email, 55% have their own website and 58% use others‘ websites to advertise. In South Dundas 87% of the businesses use email, 49% have their own website and 62% use others‘ websites. Following in popularity were e- commerce, finance and accounting, marketing and customer service reported by about one third of both townships owners/managers. Cell phones and digital phones were common. In South Stormont 91% use cell phones and 84% use digital phones with similar statistics in South Dundas of 73% reporting cell phone and 86% digital phone usage.

While 41% of South Stormont and 75% of South Dundas businesses indicated they had the technology they needed, those wanting to implement new technology identified start-up and on-going costs as the biggest barriers.

Figure 12 – Internet Uses

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

DSL Wireless Dail-Up Email Own Websites

Cell Phones

Sufficent

South Stormont South Dundas

Thirty-two percent of South Stormont businesses belong to a buyer/supplier network while a further 50% felt it would be of benefit to do so. In South Dundas 43%

belong to a buyer/supplier network and 39% responded it would be beneficial to their business. Given that just over one third of respondents in both townships believe a buyer-supplier network could be beneficial one recognizes the challenge of organizing/managing this process given the earlier data that a significant number of the businesses are not involved with business groups like BIA, Chamber of Commerce etc.

Our Township businesses identified the following factors as being very to somewhat important to ensuring their competitiveness in the next three years:

South Stormont South Dundas

 Controlling energy costs 97% 89%

 Improving customer service 92% 85% 50% 84%

 Managing water/sewer costs 92% 81%

 Effective business planning 91% 77%

 Having telecommunication services 91% 76%

 Strategic marketing 88% 76%

 Market development locally 83% 81%

 Market development outside local area 81% 69%

 Workforce health and safety 80% 71%

BUSINESS MARKETS

This section of the interview considered what businesses do in their marketing quest to identify customer needs, stay competitive and increase their sales.

Collaboration with other businesses can lead to increased market performance. Thirty-six percent of the South Stormont owners/managers interviewed were interested in pursuing joint marketing with other business, 33% were interested in collaborating and networking and 18% would consider joint product purchasing. Fifty-four percent of the South Stormont businesses indicated they were not interested in any collaborative activities with other businesses. In South Dundas 45% wanted no collaboration while 45% indicated interest in collaborating and networking, 26% in developing joint markets and 7% in joint product purchasing. When considering where firms were marketing their products, there was a consistent trend of sales within and outside their areas over the last three years. In South Stormont sales within the area remained steadfast at 67%, sales outside the area but within Ontario remained constant at 24% while sales outside Ontario, but within Canada dropped by 1% in the last 3 years. Sales to the U.S. account for about 5% of total sales. Correspondingly, in South Dundas sales within the area dropped from 64% to 63%, sales outside the area but within Ontario have dropped by 1% in the last 3 years from 31% to 30% while sales outside Ontario and within Canada have increased to 7% from 5%. Like South Stormont the South Dundas owners/managers report that 5% of their total sales are to US customers. Both

townships report that their current year sales will be the same or increase over 3 years ago. In South Stormont 75% of businesses reported this trend while 78% of South Dundas reported this trend. For South Stormont businesses this is a 9% increase over the last 3 years and a 5% increase for South Dundas businesses. This is positive news as 31% of South Stormont and 40% of South Dundas businesses believe their competition has increased. It should be noted that 13% of SS businesses and 7% of SD businesses reported their total dollar sales would be lower this year and 13% and 14% respectively were not sure of their bottom line.

Market research information was an important component of business growth and development. South Stormont and South Dundas identified similar market research and trend information sources as important to their business success, namely:

South Stormont South Dundas

 Suppliers 77% 59%

 Industry/Association newsletters 59% 81%

 Tradeshows 55% 41%

 Industry/Association websites 45% 56%

 Government publications 23% 41%

Business owners/managers in both South Stormont and South Dundas reported that they use similar strategies to identify customer needs. Their top methods of gathering customer feedback are by:

South Stormont South Dundas

 Informal customer contacts 76% 81%

 Customer complaints 58% 61%

 Sales Calls 33% 36%

 Trade/Industry publications 27% 31%

 Marketing Publications 24% 25%

 Customer database management 12% 33%

Businesses in South Stormont and South Dundas use similar strategies to market their products and services. Of the survey participants who answered this question the most popular marketing trends are:

South Stormont South Dundas

Business cards 100% (25) 100% (30)

Flyers and brochures 95% (21) 100% (24)

Sponsorship of events 95% (18) 100% (30)

Internet advertising 95% (19) 96% (23)

General publications 100%(16) 95% (19)

0 5 10 15 20 25 30

Business Cards Flyers & Brouchures Sponsorship of Events Internet Advertising General Publications South Stormont South Dundas

FINANCIAL DEVELOPMENT

Having surveyed the businesses' future expectations, information was then gathered on their previous 3 years‘ financial history. In this section, financial lending sources investigated, secured and used for operations and expansions were discussed as well as business practices regarding planning and reviewing of financial performance. In this second phase of our study chartered banks were the main financial source investigated by 41% of South Stormont and 25% of South Dundas businesses. Of these businesses 72% of South Stormont and 72% of South Dundas secured bank loans. Seventy-six (76%) of the South Stormont businesses used the secured bank money for operations and 24% used it for expansion. In South Dundas 94% of the businesses which borrowed from banks used the money for operations and 22% used it for expansion. The second main source investigated (33%) and secured (67%) by South Stormont businesses was private funds. In South Dundas the second main source of funds that was investigated (75%) and secured (75%) was credit union. When reviewing financial planning, there was a variation in the range of time-frames in use with 36% of South Stormont and 46% of South Dundas businesses planning their financial performance yearly and 28% of South Stormont and 20% of South Dundas businesses reviewing monthly. Five percent (5%) of South Stormont businesses do not plan their financial performance and 11% do not review their actual performance at all. In South Dundas 9% of the businesses do not plan their financial performance and 11% do not review their actual financial performance. In total 19 businesses in our study requested financial planning information, 12 from South Stormont and 7 from South Dundas. In South Stormont 1 business and in South Dundas 3 businesses asked for assistance with business planning and all 3 for information for marketing.

WORKFORCE DEVELOPMENT

Business Retention and Expansion recognizes that up to 80% of new jobs come from existing businesses. As indicated earlier in this report, the majority of those interviewed identified an increase in sales in the next three years and anticipated further increases in the next year. New workers may require additional training, while existing workers may need motivation and empowerment. They, too, may need to upgrade their skills and receive professional development. This section considered workers‘ availability, workers' skills, training sources and the factors responsible for the businesses‘ growth requirements.

In our study, 35% of South Stormont and 15% of South Dundas businesses reported an increase in the number of employees in the past three years. The main reasons for this increase in South Stormont were an increase in sales (67%), introduction of new products or services (53%), an increase in market share (47%) and entrance into a new market (40%). South Dundas interviewees credited an increase in sales (60%), management effectiveness (40%) and renovation/expansion (30%) for their increase in employees. In the next 3 years 39% of the South Stormont businesses predict they will stay the same and 45% forecast an increase in employees. Similar optimism exists in South Dundas with 65% of the businesses predicting their employment numbers will remain the same while 25% believe they will increase their complement of employees.

Figure 14

0% 10% 20% 30% 40% 50% 60% 70%

Increase in Sales Employees Stay the Same Inc in Employees Past 3 yrs Inc in Employees Next 3 yrs

Availability of workers was deemed fair to poor by 59% of South Stormont businesses and 32% of South Dundas businesses. Fifty-three percent of the South Stormont businesses felt the quality of the area‘s workforce was good to excellent while 64% of South Dundas owners/managers rated their areas workforce as good to excellent.

Employers in our study identified the following areas where our workforce needed skill improvements:

South Stormont South Dundas

 Customer Service 52% 37%

 Oral communication 37% 31%

 Sales and marketing 35% 37%

 Computer software usage 33% 36%

 Written communication 32% 25%

Most of the businesses in our study do their own in-house training, 81% of South Stormont and 80% of South Dundas businesses. Employers in our study also used customized training for their employees, 28% in South Stormont and 43% in South Dundas. South Stormont indicated the most significant barriers to employees receiving training were cost (50%), loss of productivity during training time (36%), lack of awareness of existing training programs (32%) and loss of trained employees to other businesses (32%). South Dundas businesses identified cost (45%), loss of productivity during training (45%) and lack of availability of local training (32%) as the main training roadblocks.

Stability of the work force was rated good to excellent by 40% of South Stormont businesses and 77% of South Dundas businesses. The majority of the businesses in our study indicated they had no difficulties in retaining employees, 78% in South Stormont and 86% in South Dundas. Three South Stormont and 3 South Dundas employers did identify wages as the main reason employees change jobs

Employers from South Stormont indicated they would need 15 additional employees in the next 3 years while South Dundas is predicting an increase of 18 employees. The need will be primarily in the areas of skilled trades, sales, and unskilled labour. It was deemed that there was a shortage of skilled tradespersons.

LOCAL COMMUNITY

In this section of the survey, business employers reflected on the characteristics of their community. Consideration was given to such things as the economic development plan, advantages and disadvantages of doing business in South Stormont and South Dundas, and other factors related to doing business in their communities.

When surveyed, 33% of the South Stormont and 46% of the South Dundas respondents were interested in participating as a Business Ambassador for their community.

When asked if their community had an Economic Development plan 48% of South Stormont‘s respondents indicated they were aware of the plan and only 21% believe it is being effectively implemented. Of those surveyed in South Dundas 66% were aware of their area‘s Economic Development plan and 37% responded that it was being well implemented. This appears to be an issue that requires attention.

Business retention and expansion usually implies that a business is currently pleased with the community and willing to make continued or further investments locally. What did the data in our study reveal?

The advantages of doing business in our townships are revealed by studying the businesses‘ good to excellent ratings of a number of factors. Responses from both townships were similar in a few areas and significantly different in others. The major advantage identified was the lifestyle offered by the local environment with an 89% good to excellent rating from South Stormont and a 94% evaluation from South Dundas participants. With their good to excellent ratings South Stormont business owners also emphasized the availability of utilities (80%), reasonable labour costs (74%) and access to markets (73%) as benefits to doing business in our area. South Dundas merchants gave good to excellent ratings for availability of utilities (88%), access to markets/customers (85%) and access to suppliers (83%) as a positive feature of doing business in our area.

Fair to poor ratings reveal areas where business owners/managers are less pleased with doing business in our townships. In South Stormont 69% gave fair to poor ratings for taxes, access to training facilities (66%), access to research and development (67%), size of local market (61%) and development charges (59%). In South Dundas fair to poor rating were given for taxes (87%), development charges (69%), support from municipality (60%), size of local market (58%) and appropriately zoned land (55%). In review it would appear that business owners/managers issues are different in each township.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Lifestyle

Availability of Utilities Reasonable Labour Costs Access to Markets Access to Suppliers

South Stormont South Dundas

Figure 16 – Factors to Doing Business (Fair to Poor Rating)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Taxes

Access to Training Facilities Size of Local Market Development Charges Support from Municipality Appropriately Zoned Land Access to R & D

In identifying supports which local business associations and economic development offices could provide, businesses expressed an interest in receiving assistance in the following areas:

South Stormont South Dundas

 Joint advertising and marketing 59% 63%

 Attraction of related supply/ 59% 56%

Service businesses

 Marketing seminars 55% 44%

 Business networking sessions 55% 38% 17% 35%

 Website development 50% 34%

 Trade shows 41% 44%