As we head into the second half of 2017, the Calgary economy is showing signs of recovery and improvement. There are three areas in which current conditions are becoming increasingly favourable for new and veteran local business owners.
With the depression in the oil and gas sector, more entrepreneurs have fast-tracked their entry into the marketplace. The increased urgency to introduce a wider range of products and services into the province has helped significantly to diversify the economy. Over time, the diversification of the economy will help to insulate more business owners from the volatility inherent in the oil and gas markets.
According to NAI Advent’s Spring 2017 Report, March 2017 saw the incorporation of 4,155 new businesses in Alberta. This is a 13% increase over the number of businesses incorporated during the same period last year. In addition to the increase in incorporations, Calgary has launched a campaign encouraging more technology companies to establish operations in the city. This will further strengthen and diversify the economy over the long term.
After a significant period of restrained spending, more noticeably so in Calgary, key economic indicators are reflecting increased consumer confidence and willingness to spend across the province. Both housing starts and retail spending have posted increases during the first half of the year.
As consumer confidence and spending increases, many businesses can expect to see an uptick in new and returning customers. This is an optimal time for business owners to carefully examine pricing for products and services to ensure profitability. Owners should decrease or eliminate low producing product lines and services. This will help to ensure new customer investment in the business will have a maximum impact on overall profits.
A few years ago, finding affordable and desirable retail, office, and industrial space in Calgary was an onerous task. In the wake of the recent recession, more spaces have become available to business owners. Vacancy rates remain high in all sectors across the city. Landlords are more motivated to lease to qualified tenants and many are offering incentives for new leases as well as renegotiating leases already in place.
The current state of commercial real estate across the city affords business owners the opportunity to access locations that may have previously been out of reach. Many landlords are offering reduced rent, financial assistance with physical upgrades, and other more favourable lease terms.
As Calgary moves forward into an improved economy, business owners should continue to optimize business processes to help insulate them from future economic fluctuations. For some businesses, this may be a good time to begin planning an exit strategy.
With in-depth knowledge of the Calgary market and economy, Acuity Business Group is ideally qualified to help small to mid-sized businesses with annual sales between $500,000 and $2M prepare their business for sale and help them achieve their goals. Contact us to find out help we can help.