Business insolvencies leap higher in January from a year earlier, led by bankruptcies

Companies going out of business is always a tragic affair, severely affecting real people’s lives. Covid loan repayments are listed as a major contributor to this current trend.

However, for years, metrics have also told us that productivity in Canada is relatively low. The Business Council of BC lists as reasons that companies here use less capital and technology, are less innovative, and operate at a smaller scale. They add “to put it another way, the average Canadian worker would need to work almost 30% more hours to generate the same output as American and French workers, 25% more than Germans, 15% more than British.”

I can’t comment on the validity of above numbers. However, from my own experience working with dozens of SME’s, I can conclude that sub-optimal Organizational Structure, Management Practices, Work Processes and Financial Control negatively affect Operational Efficiencies and Financial insight.

These all result in lower productivity & profitability (thus inability to pay back loans).

Improving business operations may be hard work but is not rocket science: there is an abundance of literature and professionals that can help.

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