TORONTO -- A CIBC-sponsored survey finds that most small businesses in Canada have no plan to deal with the impact of a falling loonie even though more than a third are worried about it.
The poll of 500 businesses by the Canadian Imperial Bank of Commerce (TSX:CM) found that importers are the most likely business owners to be concerned (86 per cent), while 53 per cent of manufacturing companies and 44 per cent of wholesale and retail businesses were also worried.
Companies that have taken steps to deal with the impact of the loonie's decline have generally opted to reduce spending, alter pricing and source new or alternative clients or suppliers.
But instead of short-term solutions, CIBC recommends small businesses adopt a plan to manage currency fluctuations and monitor that plan on an ongoing basis. That could involve holding US dollar accounts and having access to capital to address fluctuations in cash flow.
It says they should also build flexibility into their business model to be able to absorb changes to the loonie or other unexpected expenses by having access to an emergency reserve fund, whether it's accumulated savings or a line of credit.
The poll was conducted online by Leger from Feb. 12 to 19, among a representative sample of English- and French-speaking business owners or decision-makers in Canadian companies with 500 employees or less. The polling industry's professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.
