New and noteworthy information you can use: insurance premiums hurt Canadian small businesses.

A recent CIBC telephone poll conducted by Decima Research found that 55% of Canadian small businesses were negatively affected by the rising cost of insurance premiums. In comparison, 33% of entrepreneurs reported that domestic events, such as SARS, mad cow disease and the August blackout had a negative effect on revenues. A similar number, 28% reported that international events, including the war in Iraq, hurt revenues. The strength of the Canadian dollar had a net negative impact on revenues for 15% of Canadian entrepreneurs.

"Clearly insurance challenges impact Canadian small business more than any other domestic or international economic or political event," said Rob Paterson, CIBC's senior vice-president of small business banking. "Anything that impacts the profitability of Canadian entrepreneurs ultimately impacts Canadian competitiveness, and the economic prosperity of us all."

Despite the shocks that hit small businesses over the past year, the vast majority (83%) of those experiencing negative impacts on revenues don't call into question their decision to be entrepreneurs.

Surprisingly, only 11% of Canadian entrepreneurs have any specific new plans to help their business minimize future disruptions due to negative business, political or environmental events--either domestic or international. Among those who had created a business disruption plan, the preventive actions were generally identified as follows:

* Increase capital reserves (31%);

* Purchase capital equipment; or

* Increase cash on hand.

Although Paterson sees the bullishness on the part of entrepreneurs as positive, he stressed the importance of planning for future business hardships. "It helps smooth out the inevitable peaks and valleys of entrepreneurial life," he noted.

The poll also found that more than one in five (22%) Canadian small businesses were formed as a result of a negative change or downturn in the entrepreneur's employment situation.

While more than one in five Canadian small businesses were formed as a result of a negative change or downturn in the entrepreneur's employment situation, many of these businesses are now thriving. 46% of the small business owners polled indicated their organization is now more successful than a year ago.

Almost half (48%) of small businesses receive outsourced or contract work from other companies. Fully one in ten Canadian small businesses were created as a result of an outsourcing opportunity, providing further evidence of the downsizing/outsourcing link. Nine per cent of downsized entrepreneurs count their former employers as current business clients.

The poll was based on a randomly selected sample of 1,351 Canadian small business owners (defined as including 1-15 employees including the owner and having revenues under $5 million for the year 2002).

For more information visit www.cibc.com/smallbusiness.