--- description: Which business disruptions do SMEs most commonly encounter? We surveyed 500+ managers in Canada to learn more about the business challenges they faced in 2022. image: https://gdm-localsites-assets-gfprod.imgix.net/images/capterra/og_logo-e5a8c001ed0bd1bb922639230fcea71a.png?auto=format%2Cenhance%2Ccompress title: The most common business disruptions for SMEs in Canada --- # How SMEs can prepare for business disruptions in Canada Canonical: https://www.capterra.ca/blog/3182/business-disruptions-risks-canada Published on 2022-10-31 | Written by Tessa Anaya. ![How SMEs can prepare for business disruptions in Canada](https://images.ctfassets.net/63bmaubptoky/5YLdxQ28SwX9b1VzfvpOylchBfPSJ8SyBrv7BfNCb7g/d4067010afb0cc50a9da5ef5cf4f6b48/business-disruptions-CA-CAP-Capterra-Header-1.png) > Ensuring business continuity in unprecedented times can be stressful. To help business owners in Canada prepare for hard-to-predict business disruptions, we surveyed over 500 managers of SMEs on their experiences and approaches to the labour shortage, supply chain issues, and cybersecurity vulnerabilities. ----- ## Article Content Ensuring business continuity in unprecedented times can be stressful. To help business owners in Canada prepare for hard-to-predict business disruptions, we surveyed over 500 managers of SMEs on their experiences and approaches to the labour shortage, supply chain issues, and cybersecurity vulnerabilities.What we will coverSupply chain bottlenecks in product-selling companiesCanada’s labour shortageCybersecurity issuesTakeaways on common business disruptionsIn the wake of the COVID-19 crisis, many managers aim to deal with crises with vigilance and forethought, so as to prevent more disruptions to their business. However, even with risk management actions in place, complex issues such as the national labour shortage, supply chain breakdowns, and digital data protection often require creative, multi-level solutions.Professional advice from SMEs facing similar challenges can help others uncover ways to maneuver and manage them. To create a resource that small business owners can use, we surveyed 514 managers of SMEs in Canada about their experiences with common business disruptions (for the full methodology, scroll to the end of this article). Supply chain bottlenecks in product-selling companiesProduct manufacturers have seen historic declines and surges in sales over the past few years, demonstrating the volatility of the supply chain. Many product-selling companies have seen the consequences of these fluctuations firsthand: over three-quarters (76%) of those surveyed have experienced supply chain disruptions in the last year.More than half of surveyed managers (61%) reporting issues say the supply-related disruptions they’ve faced are moderate, while 17% say their business has been significantly impacted by them. When asked what caused the disruption to their supply, many respondents pointed to the instability of supply chains. The reasons given included:Supplier-enforced order limitsUncertain fulfillment/delivery timesRelying on a single supplierUnfortunately, events such as natural disasters, labour shortages, pandemic-related restrictions, and reactionary protests can happen suddenly, changing supply chain operations with little notice. To minimize potential consequences of such shifts, consider the most common effects of supply disruptions and create a business continuity plan to handle them should they arise. Tip for SMEs: Keeping a closer eye on supply chain operations can also help companies minimize business risks. Managing suppliers, inventory, orders, demand, and warehouse operations can all be done using supply chain management software. Some tools even offer supply chain forecasting, which can warn SMEs about supply chain hiccups before they happen.How to offset the impact of supply chain disruptionsWhile digitizing supply chain operations like inventory control and inventory management helps businesses stay vigilant of risks, bottlenecks can still arise unexpectedly. To cope with the fallout of supply chain mishaps and avoid them in the future, a range of maneuvers relating to quantity, pricing, and ordering can be used.The most common action taken by managers facing supply chain setbacks was to adjust their product offering based on availability, which can prevent unfilled orders and unsatisfied customers. Among other actions taken in addressing supply-related business disruptions:34% purchased products so as to ensure sufficient inventory33% ordered larger upfront quantities in advance32% worked with local suppliers 22% extended lead times When dealing with lowered inventory levels, increasing retail prices is another option to recoup lost revenue caused by issues in the supply chain. The majority of surveyed business owners (78%) have already or plan to increase retail prices to offset rising supply chain costs. Tip for SMEs: A change in pricing can be a delicate aspect to manage. Setting prices too high can scare off previously interested customers, but setting them too low could put a businesses’ finances at risk. Using a pricing optimization tool can help SMEs adjust prices based on current product availability, data from competitors, market conditions and more.Canada’s labour shortageRecruiting and retaining employees is an expected obstacle for many Canadian businesses as the national labour shortage continues. Out of the company leaders surveyed, more than a third (38%) said such problems had affected their business. Pain points from recruitment difficulties are being felt across a range of departments. A third of managers struggling to hire talent (35%) had difficulty finding customer service workers, and a quarter (25%) struggled to find sales representatives. Many also had a hard time finding employees for other departments, such as customer experience (18%), IT (17%), and general management (13%). Regardless of which areas present hiring challenges for SMEs, many experienced similar setbacks because of them. Companies struggling with the labour shortage reported incurring repercussions such as employees’ growing workloads, declines in revenue, and drastic changes to business plans.Knock-on effects to employee morale, company strategy, and overall profitability are common results of labour shortage struggles. Business owners who predict they may encounter hiring-related issues may seek creative solutions for avoiding them. Among the measures taken to combat talent-sourcing challenges faced by surveyed SMEs:50% increased salary offerings of advertised positions35% considered candidates outside of their typical criteria32% offered improved benefits to job candidates30% advertised open jobs in new ways/platforms26% worked with HR agencies to fill positionsAmidst current economic inflation and with a predicted recession on the horizon, non-monetary solutions for attracting employees in the labour shortage are the best to avoid changes to financial key performance indicators (KPIs). If out-of-the-box solutions still don’t attract the talent needed, digital tools can often be implemented to complete or streamline tasks related to certain operations. Tip for SMEs: When recruiting during a labour shortage, reaching a wide pool of candidates is key. Open positions should be advertised on a variety of platforms, not only on their own company website. With job board software, talent seekers can advertise internally and externally, including on social media websites, while also keeping track of submitted resumes and hiring success rates.Cybersecurity issuesWith consumers’ increasing online data concerns and the ever-present threat of ransomware and other risks, SMEs must be vigilant about security vulnerabilities. The majority of those surveyed (69%) were aware of at least one current vulnerability in their business, but nearly a third (31%) felt confident they did not have any. Concerning the digital protection measures taken by SMEs, the most common cybersecurity software used included:Anti-virus software (cited by 67%)Firewall software (56%)Data backup tools (51%)Email security managers (43%)What about the most common cyber threats that companies in Canada face in 2022? Email-related incidents had happened in over a third of the companies (36%) surveyed. 12% have had their account taken over by hackers and a further 8% of those surveyed had experienced a ransomware attack within the last 12 months. Tip for SMEs: Careless employees ranked first among the top three security vulnerabilities faced by SMEs, with this risk factor cited by 28% of the Canadian managers surveyed. Keeping your organization protected may not only be up to using the best tools, but also in training employees on the best practices for cybersecurity. Takeaways on common business disruptionsDespite the initial investment that business continuity planning requires, finding ways to predict and alleviate business risks can help small businesses stay on track towards their goals. Unforeseen business disruptions are not only a threat to an organizations’ current operations, but also to their future plans, as well. Almost one in five of SME managers surveyed (19%) thought their businesses were not currently investing enough in their business’s growth and development. When working on risk management, it’s important to consider the specific risks of the local economy. Taking the business disruptions most reported by business leaders in Canada into account, the takeaways from our survey were:When presented with supply chain disruptions most respondents adjusted their product offering, while around one-third reacted by bolstering their inventory and working with local suppliers. In the face of the labour shortage, half of those struggling to hire have raised salaries for open positions, while about a third improved job benefits and considered non-typical candidates.On the topic of cybersecurity, phishing emails are the most common security incident identified, and careless employees are the most frequently cited security risk. Most businesses surveyed have installed anti-virus software, and over half have implemented firewalls and data backup tools. Looking for risk management software? Check out our catalogue\! ## Disclaimer > Survey methodology: Capterra’s Business Disruptions Survey was launched online during August and September 2022. The manager-focused survey was completed by 514 employees who fit our criteria. The criteria for selecting participants are as follows:Between 18 and 65 years oldEmployed part-time, full-time, or own their own businessWork at a company with between 2 and 250 employeesSeniority level of management or ownerMust be able to identify the main business model of their companyMust work at a company that sells either products, services, or both ## About the author ### Tessa Anaya Tessa is a Content Analyst for Capterra, delivering software-related insights to local SMEs. 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