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April 14, 2003 Volume 6, Number 4


* Introduction - Editor's Comments

* What's New at

* Statistics Canada releases

* Should International Conflicts be Part of Your Business Plan?

* The Internet has Fallen from Glory but not Growth

* Small Business Stats Facts

For data table spacing, this newsletter is best viewed in Courier 10



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Well Spring has finally sprung. Just in time for the hockey play-offs. What
more could a Canadian want?

How about small business benchmarks! At GDSourcing we are excited to be able
to offer a new product for new entrepreneurs. The Canadian Industry Profile
provides accurate financial benchmarks for Canadian small businesses
covering over 800 specific industries. Find out how a typical firm in your
industry performs and the odds of your own success. For more information or
to view a sample see:

I hope you find this issue helpful.


John White





Site Summary:
Canadians who expect to lose their job in 2003

Site Summary:
Number of hockey players and indoor rinks by country.

Site Summary:
Number of women board directors in Canada




Statistics Canada released the following statistics over the last four
weeks. We have listed those releases we feel are of the most interest to
Canadian entrepreneurs.

Very few of these statistics are available on-line. The URL listed is a
direct link to the press release associated with the data. It provides
contact and ordering information. If you want to purchase any publication
related to these releases please see our web site: We offer a 20% discount on most
Stats Can publications and a 10% discount on Stats Can electronic products.
For more information you can reach us at Put
"StatsCan" in the subject line of your e-mail.


Farming operating revenues and expenses 2001 (final estimates)


Annual Survey of Accounting and Bookkeeping Services 2001

Annual Survey of Surveying and Mapping Services 2001

Annual Survey of Service Industries: Management, scientific and technical
consulting services 2001

Annual Survey of Engineering Services Industry 2001


Foreign direct investment 2002

Sources of the Canada-United States productivity growth gap 1981 to 2000


University enrolment by field of study 2000/01 (preliminary)


Waste management industry 2000

Public sector employment 2002 (preliminary)

Local government finance: Assets and liabilities December 31, 2000


Induced (therapeutic) abortions 2000


Life after welfare 1994 to 1999

Rural/urban divide: Income disparities 1992 to 1999

Employment in computer and telecommunications industries: A profile 1990 to


Electronic commerce and technology 2002


Adult criminal court statistics 2001/02

Legal aid 2001/02


Canadian biotechnology: A snapshot 1997 and 1999

Canadian biotech innovative firms 2001

Productivity growth from new plants of multinationals


Census of Population: Earnings, levels of schooling, field of study and
school attendance

Benefiting from extended parental leave 2001

Demographic statistics January 1, 2003 (preliminary estimates)
(SAVE 20% OFF this annual must-have for market research! See:

Deaths 2000

Participation and Activity Limitation Survey 2001


Small area retail trade estimates 2000

Profile of Canadian exporters 1993 to 2001

Quarterly Retail Commodity Survey Annual 2002 and fourth quarter 2002


Aircraft movement statistics 2002 (preliminary)


Workplace and Employee Survey: Do innovative work practices reduce labour
turnover? 1999/2000

Workplace and Employee Survey: Stock purchase plans 1999





Business research is primarily about identifying your target market and
assessing competitive forces active therein. This information allows you to
position your company to take advantage of opportunities as they exist. The
idea is to define your market as specifically as possible and to fully
understand the nature and strength of competing and related businesses.
Given this focus on detail sometimes the "big picture" can be forgotten.

Every business has a series of remote factors exerting influence over it. In
many cases these factors operate virtually unseen by entrepreneurs. They
include such things such as the affects of legislation, economic
performance, social values, political policy, global events and technology

These remote factors can often act like prevailing winds: constant and ever
present. But in business nothing can be taken for granted. A successful
business understands which winds it relies on and has a strategy in place in
case any should change direction.

Sometimes remote factors can change in an instant - such as the bombing of a
foreign city - however in most cases remote changes are more subtle making
their impact all the more difficult to perceive, especially if an
entrepreneur is unaware of which remote factor is at work. The key is
understanding which factors have the greatest impact and having a strategy
in place to be able to deal with current and more importantly changing

The war in Iraq has had an effect on our business. We had two seminars
cancelled the week the war started. In both cases the reason for
cancellation was low attendance. Many factors could be at work here but the
novelty of the war and the uncertainty it might bring definitely played a
part. We have also had some research requests postponed and others
cancelled. This comes as no surprise. Consumer spending often softens in
turbulent times. During the first month of Gulf War I there was an 8% drop
in retail sales in Canada.

In our case the effect of the Iraq Crisis is not the result of government
foreign policy. This is a separate remote factor that has greatly influence
some portions of the tourism sector (e.g. hunting lodges). Overall exports
make up a very small portion of our total revenue. The remote factor
affecting us is human nature in the face of uncertainty. Researching a new
business requires a particular type of mind set. Uncertain global security
tends to make new entrepreneurs put off researching a small business or at
least minimize their investment.

When we witnessed the sudden drop in sales we were acutely aware of one of
the root causes. We therefore focused our marketing efforts on our most cost
sensitive products. Instead of panicking at lost research orders we
suggested clients at least start their research by examining industry
benchmarks (Canadian Industry Profiles) or market estimates (Household
Spending Data) ( Both of which can help
decide the initial viability of a future business launch with a minimal
investment. We also recommended our research guide, Researching a Small
Business, which now include February 2003 updates.
( This way people do not have to give
up their dream of self-employment. While they wait until they feel more
confident about their business environment they can spend the time
researching their business themselves.

Remote factors can affect various businesses differently. While a change in
one remote factor may prove negative for a particular industry, it is often
beneficial to another. For GDSourcing, when unemployment rates begin to rise
our business tends to flourish. Corporate buy out packages give
entrepreneurs seed money to invest in launching their new ventures.
Government self-employment programs are especially robust with well-funded
candidates. At these times our strategy shifts to highlight more premium
research services for those clients eager to start a new venture quickly.

It is important to understand that under neither condition do we abandon our
core business operation. At any time someone can chose to purchase any of
our research products or services. We are not reinventing ourselves with the
shift in each remote factor. High unemployment never lasts forever, nor will
the current conflict in Iraq. Instead we are employing established
strategies so as to ride out the "changing winds".

Without knowing what remote factors influence your business you will not be
prepared to respond when one or more of them change. This alone could
undermine your entire operation.

Sometimes it is difficult to understand which remote factors most acutely
affect your particular type of business. Some sectors
are especially aware of these factors and regularly research their impact.
For example in March 2003 the Canadian Tourism Research Institute released
the report: What If There Is A War In Iraq? The Potential Impact on Domestic
and Selected International Markets To Canada. It provides long term
forecasts based on two conflict scenarios.(See:


Another source for identifying remote factors and their current affect on
particular sectors are economic reports produced by Canadian banks. For
example the recent CIBC report "On Shaky Ground" examines factors affecting
the 2003 outlook for housing and new motor vehicles.

These types of reports are generally found under the "Economics Department"
or "Research" section of a bank's web site.
For most businesses however the identification and research of remote
factors is left up to the entrepreneur. To identify key factors first put
yourself in your market's "shoes". What is the underlying motivation in
using your product/service and what might change this motivation.
Entrepreneurs are notoriously optimistic (we have to be or else we would
never start our own businesses!). To identify remote factors however you
really need to be a pessimist. What are the worst case scenarios for your
business? This is not an admission that things are going to go terribly
wrong but rather an exercise in developing a strategy to handle all
conditions whether adverse or not.

If you need some help getting started look at the "Risk Factors" section of
a corporate prospectus. Ideally you would want to look at businesses
operating in your sector but any prospectus can be helpful. It will at least
get you thinking in the right direction. For example the following risk
factors are from the Shoppers Drug Mart Preliminary long form prospectus Oct


Ability to Attract and Retain Pharmacists and Key Personnel

The Company is dependent on the continued service of, and on the ability to
attract, motivate and retain pharmacists for its stores and key personnel to
operate its business. A shortage of pharmacists has developed over the years
in the industry. There can be no assurance that the Company will be able to
attract, hire and retain sufficient numbers of pharmacists necessary to
continue to develop and grow the business. The inability to attract and
retain pharmacists and other key personnel, including senior management,
could have a material adverse effect on the Company's business, financial
condition and results of operations.

Regulatory Environment

The Company's operations are subject to numerous federal, provincial,
territorial and local laws and regulations governing the approval of new
drugs and the packaging, disposal, sale, marketing, advertising, handling,
distribution and dispensing of pharmaceuticals. Non-compliance with or
amendments to any such laws or regulations, particularly those that provide
for the licensing and conduct of pharmacists, the regulation and ownership
of pharmacies and the advertising of pharmacies and prescription services,
could adversely affect the Company.

To view this and other prospecti see SEDAR: To find
publicly traded companies in your sector search Canada Newswire
(, GlobeInvestor
( or a periodical
database (available at a local library). Also do not forget to ask people in
your industry and market if they are aware of related companies.

Events currently gripping the world are extraordinary and in many ways
unforeseen but the affect of these types of events on your business
operation should not come as a surprise. By understanding the cause of
changes in your business you can react more quickly and effectively.
Research allows you to sail forward in any wind. Your ship might not
progress as quickly as in the past but it will not sink!





It is official. The Internet is no longer newsworthy. On April 2, 2003
Statistics Canada released the latest e-commerce data with "virtually" no
media attention. (I apologize for the pun).

Statistics Canada itself seems almost embarrassed to be collecting these
figures, reiterating again and again through out their extended news release
that "e-commerce sales still account for only a small fraction of total
operating revenues."

Gone are the days of ridiculous growth rates such as 2001 when e-commerce
grew by 84.1% but it is still a sales channel worthy of attention. The 28.4%
growth in on-line sales in 2002 can hardly be considered weak especially for
a sale's channel whose "bubble has burst."

This overall growth rate is even more remarkable when you consider that 43%
of businesses that sold online in 2001 stopped selling via the Internet in
2002 and that for every ten that businesses that started selling online in
2002, seven stopped. This indicates that viable business models are doing
very well while "hopeful" business ideas are having to face reality.

The sector, which reaped the most benefits of e-commerce, was wholesale
trade. In 2002 it accounted for $3.7 billion or 27% of all e-commerce sales.
This represents a 93% increase over 2001.

Overall business to business (B2B) is clearly the engine behind e-commerce
representing nearly 73% ($9.7 billion) of the total value of online sales.
Consumers however are still shopping online. Business to Consumer (B2C)
Internet sales continue to grow at a faster pace than overall B2B sales.
Between 2001 and 2002 B2C sales grew in value by 58.5% to a total of $3.7
billion. Over the same period B2B grew by 19.8%.

The top three sectors for B2C sales were retail trade (40% of total),
finance & insurance (16%) and information & culture (13%).

Who is buying all these products and services off the Internet?

The answer is closer than you might think. Three out of every four online
sales were to a business or individual located in Canada. The total value of
domestic sales ($10.4 billion) grew by 35.1% between 2001 and 2002.
E-commerce exports by comparison showed only a marginal increase of 7.4%
($2.7 billion to $2.9 billion).

Canadian business continues to recognize the benefits of purchasing online.
For the 3rd straight year the percentage of firms reporting online purchases
grew by more than 10%. 32% of all firms in 2002 reported an online purchase
as compared to 22% in 2001 and 18% in 2000.

The glory days of the Internet may be over but its growth is not!

For more information from this release see:

Also do not forget to use the CANSIM database for retrieve details by
specific industry. The CANSIM tables are linked in the above news release.




Each Business Researcher Newsletter ends with a collection of five
statistics that every entrepreneur should be aware of.

1. How many pages does the average Canadian SME user print in a day? How
many does a corporate user print?

SME user: 35
Corporate user: 50

Source: IBCG Market Survey (2002)

2. What % of information received by Canadian SMEs is electronic as opposed
to hard copy? What % for Corporations?

SME Electronic: 57%
SME Hard Copy: 43%

Corporate Electronic: 66%
Corporate Hard Copy: 34%

Source: IBCG Market Survey (2002)

3. What % of Canadian SMEs are concerned about the shortage of qualified
labour in Canada?


Source: CFIB (April 2, 2003)

4. What % of Canadian SMEs plan to increase their labour force over the next
3 years?


Source: CFIB (April 2, 2003)

5. What is the most effective hiring method for Canadian SMEs?

Referrals from friends, employees (69%)
Job advertisement in the newspaper (41%)
Unsolicited applications (37%)
Government Employment Centres (17%)

Source: CFIB (April 2, 2003)


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UPDATED: 08/06/03
1998-2003  GDSourcing - Research & Retrieval