2018 Local Business Survey Key Findings and Action

2018 Local Business Survey: Key Findings and Action Plan for the Big Lakes County-High Prairie-Swan Hills Area Prepared for: Big Lakes County Shared with: All other communities within the county limits Prepared by: Big Lakes County Economic Development Authority with support from MDB Insight 1

Contents 2 5 8 11 15 Objectives of Survey Project Background Survey Methodology Summary Key Survey Findings 15 21 28 Part 1: Business Community Part 2: Levels of Satisfaction & Priorities Part 3: Future Plans 35 Action Plan 2

Objectives of Survey 3

Objectives Conduct a statistically accurate survey of local businesses in the Big Lakes-High Prairie-Swan Hills area to: 1. 2. 3. 4. Better understand the local business environment: strengths, weaknesses, priorities, needs, challenges, opportunities, levels of satisfaction, goals Establish a baseline of data to measure the impact that economic development activities have on local businesses in the region. (The plan is to conduct the survey every one to two years). Use the information to develop local resources and services for businesses with the aim of improving retention and expansion of existing businesses, and thus increasing tax revenue and jobs. Share the information with other communities to promote information sharing and cooperation. * Regional/Local/Area in this case means communities within the Big Lakes County boundaries only. 4

Project Background 5

History & Purpose Why conduct a local business survey? • • • This Local Business Survey is part of phase II of Big Lakes County’s Diversification & Small Medium Sized Enterprises (SME) Support Initiative, designed and led by the County’s Economic Development Authority (EDA) and supported in part by the Alberta Community and Economic Regional Support (CARES) program. The Diversification and SME Support Initiative emphasizes informed-decision making, based on research and analysis. Phase I of the initiative received both a provincial and a national award. Results from this Local Business Survey are intended to inform the EDA’s new Business Supports Program, which is focused on improving business retention and expansion in communities within the county limits. The success of local businesses increases local tax revenues, creates jobs, and helps support the economic health and quality of life in Big Lakes County - High Prairie - Swan Hills. 6

Stakeholders Who was involved in the survey? Project lead: The Big Lakes County Economic Development Authority (EDA) is an award-winning committee comprised of council members, staff members, and contractors. Project beneficiaries: Big Lakes County – Swan Hills – High Prairie area is comprised of Big Lakes County, 2 towns (Swan Hills and High Prairie), 5 First Nations (Sucker Creek, Driftpile, Atikameg, Kapawe’no, Swan River) and 3 Métis Settlements (East Prairie, Peavine, Gift Lake). Project contractor: MDB is a national consulting firm that provides economic development services. Project targets: Businesses located and operating in the Big Lakes County – High Prairie – Swan Hills area 7

Survey Methodology 8

Steps 1 to 4 1. 2. 3. 4. Determine the Scope of the Survey: The survey included ALL businesses located within Big Lakes County limits for four reasons: (1) statistical accuracy, (2) many residents live in one municipality but own a business in another, (3) local business growth impacts the entire region, (4) it was part of the CARES grant proposal. Develop the Work Plan: The EDA and MDB Insight developed a plan to complete the entire survey project from June to August 2018, with interviews taking place in June. Advertise the Survey: Businesses were informed about the survey in the High Prairie and Swan Hills newspapers, as well as via Big Lakes County’s online channels. Develop the Questionnaire: The questionnaire consisted of 28 questions and took approximately 15 minutes for businesses to complete. 9

Steps 5 to 8 5. 6. 7. 8. Conduct the Survey: MDB conducted the phone survey between June 21 to 29, 2018. They interviewed a random sample of 80 out of the 585 companies on the EDA’s database. This resulted in a margin of error of +/-10%, which means confidence in the survey results 19 times out of 20. Share Green and Red Flags with the EDA: MDB shared the names of businesses that were “red flags” (planning to downsize, sell, or close in the next 6 moths to a year) and “green flags” (expanding in the next year). Red flags are considered risks and green flags are considered opportunities. Analyze Findings and Produce Report: The EDA took MDB’s preliminary analysis and developed this document. Implement the Action Plan: The EDA has a plan in place to improve business supports and to address the priorities and issues from the survey findings. 10

Summary 11

Executive Summary • • • This report presents key findings in three categories: 1) Business Community (profile and trends), 2) Satisfaction and Priorities (based on business factors), 3) future plans (growth vs. at-risk businesses) Overall, businesses in the Big Lakes-High Prairie-Swan Hills area are small (1 -10 full-time employees) and long-standing operations (over 10 years) that own their own properties. They sell their goods and services mostly to the local market. Over 80% of businesses are satisfied with doing business in the area and feel increasingly optimistic about the business climate and future revenues. They are satisfied with business factors such as availability of water and affordable housing, zoning, and support from local residents and businesses. These factors, however, are not their priorities. Businesses are most concerned about the availability of skilled labour in the area, followed by development/building permit processes, internet and cell service, municipal property taxes, and roads. Approximately 24% of business owners (19 businesses) surveyed are looking to expand, while 39% (31 businesses) are considering relocating, downsizing, selling or closing. Of those looking to grow, 9 are struggling to do so. 12

Executive Summary • • • These key findings show that businesses in the area are optimistic and resilient, but are struggling in different ways. While the business community appears stable at face value, there are underlying issues to monitor and address, such as start-up activity, youth entrepreneurship, HR planning and best practices, long-term planning for succession and growth, market diversification, and possible information gaps. All of these issues increase a business community’s vulnerability. The business factors that are priorities and have high levels of dissatisfaction need to be addressed. The first step is to reach out to the businesses surveyed to understand why they are dissatisfied and what they would like to see happen. It is important to make moves to improve these factors in the short and longterm. For some factors, like broadband, improved communications about progress to date and current projects will help. Others factors, such as skilled labour availability, will require more research and a coordinated plan of action with educational institutions. This survey gathered contact information for all businesses interviewed (except those who wanted to remain anonymous). The 19 growth businesses (green flags) and the 31 at-risk businesses (red flags) will be contacted and offered assistance. 13

Conclusions and Actions • • • This survey took the pulse of the business community in the region. As such, its results are NOT reflective of one government, community, or industry. Therefore, actions ought to target all businesses and involve all communities in the area. The EDA has developed a Business Supports Program led by a Business Resources Advisor. This program will be available to all businesses within the county limits and delivered with input from communities until December 31 st, 2020. If the program succeeds, the EDA would like to work with other communities to extend this program. Key immediate actions based on this survey: 1. 2. 3. 4. Improve support for local businesses (Business Supports Program) Address priorities identified by businesses (availability of labour, especially skilled; development/building permit process; internet and cell service; municipal property taxes; and roads). Address other concerns raised from this study (business planning, start-up levels, youth entrepreneurship, HR, best practices, information gaps, market diversification) Reach out to green (growth) and red flag (at risk) businesses 14

Survey Key Findings Part 1: Business Community 15

Summary • • The majority of businesses : (1) have 1 -10 employees, (2) have been in business for more than 10 years, and (3) own their own properties. This signals an established and mature small business community, but does raise concerns about the participation rates of younger entrepreneurs, succession planning, and start-up activity. The larger the company (6 or more employees), the higher the ratio of full-time (FT) to part-time (PT) employees. Smaller companies (1 -5 employees) may be seasonal or unable/unwilling to hire FT employees. This trend can adversely impact local consumer demand economic growth if total PT jobs out number FT. Market diversification is low. Only 13% of businesses sell their goods or services nationally or internationally, while 87% of businesses focus on local or regional markets exclusively. This increases businesses’ vulnerability. Businesses are optimistic that their revenue will stay the same (42%) or increase (21%) in 2019. This is a good sign after downturn. At the same time, 31/80 companies were red flagged. This indicates that some industries might be more optimistic than others. It also begs the question what information this optimism is based on. 16

Location The majority of businesses surveyed (65%) are located in towns, while 24% are located in a rural area, 8% in a hamlet, 3% in an Indigenous community, and 1% other. This means that 32% of total businesses surveyed are located in the county. Business Location 65% The results of the survey are therefore based on a group of communities that have different infrastructure, services, policies, and governments, but face many of the same issues from a regional standpoint. 24% 8% High Prairie Rural Area, or Swan Hills Not in a Community Hamlet or Locality 3% 1% Metis Settlement Other The EDA has an outreach plan. The new Business Resources Advisor will reach out to every company operating in the county to understand their individual situation and to work with them oneon-one. As part of the CARES project, this service is also available for companies located in other communities, although priority is given to businesses located in and paying taxes to Big Lakes County. 17

Ownership & Employees The majority of businesses surveyed are locally owned with at least one employee hired, in addition to the owner (58%). Approximately 26% are sole proprietorships – the business owner is the only employee. The final 16% are businesses that have at least one employee hired, but are owned by someone who lives outside of the Big Lakes – High Prairie – Swan Hills area (this typically includes large corporations). Ownership 16% Locally Owned with Employees Sole Proprietor 26% 58% Externally Owned with Employees Number of Employees 66% Full-Time 53% Part-Time 27% 25% 9% 5% None 1 to 5 6 to 10 9% 0% 11 to 20 7% 0% The majority of businesses surveyed have between one and five employees. Approximately 53% of businesses employ between one and five full-time employees and 66% employ between one and five part-time employees. 21 to 50 18

Years Operating & Property The majority of businesses surveyed have been operating in the area for 10 or more years (67%). Less than 3% of total business have started in the last year. Own vs Rent Property Own Rent 80% 20% Term of Lease # of Businesses Month to Month 6 One-Year Term 3 Two-Year Term 2 Five-Year Term 3 Don’t Know 2 Lease Expires # of Businesses Less Than a Year (including month to month) 9 One to Three Years 3 Three to Five Years 4 Years Operating in the Area 67% 3% < 1 Year 11% 1 - 5 Years 19% 6 - 10 Years + The majority of businesses surveyed own the property where they operate their business (80%). Approximately 20% rent their property with most renting on a month to month basis (38%). 19

Market & Revenue The majority of businesses surveyed stated that their target market where their customers are primarily located - is the local area within the boundaries of Big Lakes (40%). Approximately 38% of businesses stated their target market was regional (within the boarder of the Peace County/Slave Lake area). Around 10% stated national, 9% stated local (within their direct community), and 3% stated international. 3% Primary Target Market 9% 10% Within BLC 40% Regional National 38% Local International Revenue – Past 12 Months 21% 42% Increase Same 26% Decrease 11% Varied/Unsure Revenue Expectations – Next 12 Months 34% Higher 42% Same Lower 16% 8% The majority of businesses surveyed said their revenue stayed the same in the past 12 months (42%), while 21% said it increased and 26% said it decreased. In terms of expectations for the next 12 months, more business owners expect higher (34%) or similar (42%) revenue than lower (16%). Unsure 20

Survey Key Findings Part 2: Levels of Satisfaction & Priorities 21

Summary • • Businesses report high levels of overall satisfaction when it comes to doing business in the region. There is an 81% satisfaction rate overall with 23% of all businesses reporting higher levels of satisfaction in 2018 than in 2017. This is indicates an overall excellent business climate in the area. The factors with which businesses are most satisfied include: (1) support from local residents; (2) water availability; (3) support from local businesses; (4) zoning; and (5) the availability of adequate housing, property for purchase or lease, and medical services. It’s notable that these factors are low priorities. Business factors with which businesses are least satisfied are among the highest priorities for them. These include: (1) availability of labour, especially skilled; (2) development/building permit process; (3) internet and cell service; (3) municipal property taxes; and (4) roads. Lack of skilled labour was both the top priority. It is important to address this business factor and other priorities. 22

Business Satisfaction Overall Business Satisfaction 33% Very Satisfied 48% Satisfied 13% Dissatisfied 6% Very Dissatisfied Business Satisfaction Past 12 Months 23% 62% More Positive Unchanged 15% More Negative Business owners were asked how satisfied they were overall with the Big Lakes - High Prairie - Swan Hills area as a place to own and operate a business. Overall, 81% were satisfied or very satisfied. Business owners were also asked how their attitude to doing business in the area has changed over the past 12 months. Approximately 23% stated their attitude has become more positive, while 15% have stated it has become more negative. Therefore there is a net improvement score of 8%. 23

Business Factors Satisfaction Support from Local Residents Water Availability Support from Other Businesses Zoning Availability of Adequate Housing Availability of Property for Purchase Availability of Space for Rent or Lease Availability of Health and Medical Services Availability of Unskilled Labour Local Roads and Streets Development/Building Permit Process Provincial Roads and Highways Municipal Property Taxes Cellular Phone Service Internet Service Availability of Skilled Labour 88, 5% 11, 5% 88, 0% 12, 0% 81, 8% 18, 2% 81, 0% 19, 0% 79, 7% 20, 3% 76, 8% 23, 2% 75, 5% 24, 5% 74, 7% 25, 3% 68, 7% 31, 3% 62, 8% 37, 2% 62, 7% 37, 3% 62, 0% 38, 0% 60, 3% 39, 7% 57, 5% 42, 5% 53, 9% 46, 1% 47, 2% 52, 8% 0% Business owners were asked how satisfied they were with 16 specific factors that are typically important to businesses. This graph showcases the percentage of business owners who responded satisfied or very satisfied (blue) and dissatisfied or very dissatisfied (orange) to these factors. 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 24

Business Factors Satisfaction Top satisfaction levels were seen in: • • Support from Local Residents (88. 5%) Water Availability (88. 0%) Support from Other Businesses (81. 8%) Zoning (81. 0%) Availability of Adequate Housing (79. 7%) Availability of Property to Purchase (76. 8%) Availability of Space for Rent/Lease (75. 5%) Availability of Medical Services (74. 7%) Top dissatisfaction levels were seen in: • • Availability of Skilled Labour (52. 8%) Internet Service (46. 1%) Cellular Phone Service (42. 5%) Municipal Property Tax (39. 7%) Provincial Roads & Highways (38. 0%) Development/Permit Process (37. 3%) Local Roads and Streets (37. 2%) Availability of Unskilled Labour (31. 3%) 25

Priority for Business Factors • • The satisfaction levels of business factors only tell half the story – the priority owners place on each business factors is also important to note. Of highest priority to businesses in the area is the availability of skilled labour, followed by development/permit process, municipal taxes, local roads, and telecommunication services (internet and cellular phone service). Of lowest priority to businesses in the area is water availability, support from local residents, availability of adequate housing, availability of property for purchase, and support from local businesses. It is important to mention that many of the factors in which business owners were satisfied with rank as low priority and many of the factors that business owners were dissatisfied with rank as high priority. 26

Priority Matrix Community Factors Availability of Skilled Labour Development/Building Permit Process Municipal Property Taxes Local Roads and Streets Cellular Phone Service Internet Service Provincial Roads and Highways Availability of Unskilled Labour Zoning Availability of Health and Medical Services Availability of Space for Rent or Lease Support from Other Businesses Availability of Property for Purchase Availability of Adequate Housing Support from Local Residents Water Availability Importance Performance Priority 6. 7 9. 2 7. 5 6. 4 5. 8 6. 1 6. 9 8. 3 5. 0 6. 7 4. 1 7. 2 5. 0 47% 63% 60% 63% 58% 54% 62% 69% 81% 75% 76% 82% 77% 80% 88% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 27

Survey Key Findings Part 3: Future Plans 28

Summary • • • Of the 80 businesses surveyed, 24% or 19 businesses indicated that they are considering expanding (green flags). However, 39% or 31 businesses said that they are considering relocating, downsizing, selling or closing (red flags). This means that 63% of businesses surveyed require follow up and possibly support. The survey provided the location of each business. Therefore, we know that 9/31 red flags and 6/19 green flags are located in rural areas and hamlets. Most of the rest are in towns. It’s worth noting that many red flag businesses indicated themselves in multiple red flag categories: relocation (7), downsizing (17), closing (16), selling (19). Those with multiple red flags are highest risk and therefore priorities. By industry, retail has the highest number of green flags, followed by transportation, and the second highest number of red flags after Agriculture and Forestry. The survey gathered contact information for all businesses (except those who wanted to remain anonymous). These green and red flag businesses will be contacted and offered assistance. The survey noted that 9 businesses that are considering expanding are experiencing difficulties. This presents an opportunity for the EDA to learn more about these growth struggles and what can be done to help. 29

Green & Red Flags Business owners were asked a number of questions about their future plans. The answers were split into two categories: • Green Flags: indicated that business owners were considering expansion; • Red Flags: indicated that business owners were considering relocating, downsizing, selling, or closing their business. Out of the 80 survey results, 50 businesses or 63% were flagged – 19 businesses were green flags and 31 businesses were red flags. 30

Business Future Plans to… # of Businesses % of Businesses Expand Within Next 2 Years 19 24% Sell 19 Downsize Follow-Up Questions • 9 are experiencing difficulties with their expansion plans 24% • • 4 within next 6 months 15 more than 6 months 17 21% • • 5 within next 6 months 12 more than 6 months Close 16 20% • • 5 within next 6 months 11 more than 6 months Relocate Outside BLC 7 9% • • 2 within next 6 months 5 more than 6 months While 24% of business owners surveyed are looking to expand, 39% are considering relocation, downsizing, closing or selling their business. It’s worth noting that many red flag businesses indicated themselves in multiple red flag categories. Sell (23%), Downsize (21%), Close (20%), and Relocate (9%). These are priorities for the EDA’s business retention efforts, especially those who noted “within the next 6 months. ” The survey noted that 9 out of 19 businesses that are considering expanding are experiencing difficulties. These are priorities for the EDA’s business expansion efforts. The survey provided contact information for all businesses (except those who wanted to remain anonymous). These green and red flag businesses will be contacted and offered assistance. Businesses not surveyed, but facing similar issues, will be offered assistance as well. 31

Business Future Plans by Location Plans to… In High Prairie or Swan Hills In a Hamlet or Locality In a Rural Area, Not in a Community In a Metis Settlement or Reserve Expand Within Next 2 Years 11 1 5 2 Sell 12 2 5 0 Downsize 8 1 8 0 Close 9 1 6 0 Relocate Outside BLC 4 2 1 0 32

Green and Red Flags by Location Green Flags by Location Red Flags by Location 2; 11% In High Prairie or Swan Hills 20; 34% In a Hamlet or Locality 5; 26% 11; 58% In a Rural Area, Not in a Community In a Metis Settlement or Reserve 1; 5% 33; 56% 6; 10% 33

Business Future Plans by Industry Plans to… Agriculture & Forestry Mining and Energy Construction Retail Transportation Finance & Insurance Real Estate & Rental Health Care & Social Assistance Information, Culture, Professional, & Technical Services Accommodation, Recreation, & Food Services Other Services Unknown Expand Within Next 2 Years 2 2 1 6 3 0 0 2 1 2 Sell 4 2 0 0 0 0 2 2 3 Downsize 5 1 0 3 2 0 1 1 0 1 2 1 Close 4 2 0 4 0 0 0 1 3 1 Relocate Outside BLC 0 1 0 0 1 2 0 2 34

Action Plan 35

Summary • • As part of the Local Business Survey Action Plan, the EDA’s Business Resource Advisor will reach out to each community to present this report and to introduce herself and her services. She will also learn more about the community’s businesses and get input to help shape the Business Supports Program. The Action Plan employs economic development best practices to increase local tax revenues, create jobs, and help support the economic health and quality of life in Big Lakes County - High Prairie - Swan Hills. It has four main actions, which are to: 1. 2. 3. 4. • Improve supports for local businesses (Business Supports Program) Address priorities identified by businesses (availability of labour, especially skilled; development/building permit process; internet and cell service; municipal property taxes; and roads). Address other concerns raised from this study (business planning, start-up levels, youth entrepreneurship, HR, best practices, information gaps, market diversification) Reach out to green (growth) and red flag (at risk) businesses Anticipated results: 1. 2. 3. 4. Businesses feel supported and the number of businesses accessing available resources increases Satisfaction levels for the business factors of highest priority increase Feedback shows that more business are planning, starting, owned by youth, employing HR best practices, filling information gaps, and diversifying their markets There is a decrease in red flags (business closures, relocations, and downsizes) and an increase in green flags (growth businesses) 36

Action 1 Improve supports for local businesses. As part of its CARES project, the EDA is developing a Business Supports Program (BSP) : a) Engage a Business Resources Advisor to work one-on-one with companies to connect them to available local, provincial, and federal resources (2018/2019) b) Develop an online business resources hub and business directory (October 2018) c) Present a series of helpful workshops that address common issues faced by the business community (2018/2019) d) Provide Research & Analysis Services to individual businesses and councils, and to support BSP initiatives (2018/2019) e) Develop a comprehensive and up-to-date list of resources – local, provincial, federal – and increase the # of local businesses accessing these (September 2018) f) Continue to develop partnerships with out business supports organizations within and outside of the region (2018/2019) Outcome: Businesses feel supported and the number of businesses accessing available resources increases 37

Action 2 Address priorities identified by businesses surveyed. The Business Resources Advisor will first follow up with businesses surveyed to better understand these priorities. Further actions with relevant departments could include: a) Determine skills gaps in the labour market and work with educational institutions to develop these (TBD) b) Conduct an internal audit of the development/building permit process; compare with other communities; streamline if needed; communicate results to companies (TBD) c) Communicate progress to date and plans for the short and long-term to improve cellular and Internet connectivity (Sept. – Dec. 2018) d) Review and compare municipal taxes and trends with other communities; share report with businesses; explain tax rates (TBD) e) Determine why companies are dissatisfied with roads and which local and provincial roads in particular; explore and explain plan possible improvements (TBD) Outcome: Satisfaction levels for the business factors of highest priority increase 38

Action 3 Address other concerns raised from this study. The survey helped to identify topics for the Business Supports Program. The program will focus on these in its tools and resources, and workshops and other activities: a) Deliver business planning tools, workshops, and resources, focusing on succession, growth projections, HR, business and marketing plans, etc. (TBD) b) Market research and analysis services (On-going) c) Communicate market diversification benefits and educate the business community about programs to support diversification (TBD) d) Support youth entrepreneurship in the area (TBD) e) Encourage and support start-ups (TBD) Outcome: Feedback shows that more business are planning, starting, owned by youth, employing HR best practices, filling information gaps, and diversifying their markets 39

Action 4 Reach out to green (growth) and red flag (at risk) businesses. The Business Resources Advisor will follow up with red and green flag businesses to offer support: a) Contact businesses with one or more red flags within the next six months (Sept. ) b) Reach out to businesses struggling to grow (Oct. /Nov. ) c) Follow-up with businesses with one or more red flag after the next six months (Oct. /Nov. ) d) Continue to follow up with these businesses for the next year on a regular basis and track their progress. Outcome: There is a decrease in red flags (business closures, relocations, and downsizes) and an increase in green flags (growth businesses) 40

Tracking & Reporting Progress • • • At the end of every quarter and year, the EDA will report changes in the above areas as best it can with the information that has been provided by businesses. The EDA will track results by: (1) another business survey in 2019 or 2020, (2) a client service model that will include outreach and follow-up with businesses to track progress, (3) online surveys through the business directory, (4) an awards program that incentivizes companies to report information in some or all of the action areas. The EDA will also keep track of the following in a database: – Number of businesses helped – Profiles of businesses (size, industry, location, etc. ) – Whether they reached out or the EDA reached out – What they required assistance with – How the EDA helped them – What the outcomes obtained were in the short and the long-term 41

Contacts: Joyce Stokes CEO, Larner Consulting Business Resources Advisor, Economic Development Authority, Big Lakes County businesssupports@biglakescounty. ca | joyce@larner. ca | 780 -523 -5955 (county office) or 780 -536 -7595 (cell) Lisa Baroldi CEO, Progress Unlimited Inc. Executive Director, Economic Development Authority, Big Lakes County ecdev@biglakescounty. ca | lbaroldi@progressunltd. com | 778 -928 -3706 (cell) www. gobiglakes. ca #Go. Big. Lakes 42