Recession and double dip recession be damned. The great Canadian entrepreneurial dream lives on.
A recent poll by survey company Angus Reid Public Opinion reveals that nearly 70 per cent, or roughly 23.4 million Canadians, are confident they can easily come up with a sure shot business idea. As much as 43 per cent or the respondents said they plan to say good bye to their bosses and start out on their own within the next two years.
The downside is, about 72 per cent of those surveyed by Angus Reid are worried they won’t be able to find money to fund their venture.
“It’s very exciting to learn that Canadians are aspiring to and confident about starting their own businesses,” said Barb Anderson, group sales and marketing manager for global small business at Intuit Canada. The software company known for its QuickBooks accounting tools commissioned Angus Reid to conduct a poll of 1,045 randomly selected Canadian adults from across the country and ask them about their aspirations and concerns about starting a business. The survey’s margin for error is within 3.1 percentage points, 19 times out of 20.
“This survey shows that financials remain a main hurdle for the majority of SMB entrepreneurs,” Anderson said.
In an interview with ITBusiness.ca, the Intuit manager said key motivators for starting a small business were:
- A desire to no longer work for someone else (43 per cent)
- Control over own destiny (43 per cent)
- Achieving better quality of life (35 per cent)
- Starting something new (33 per cent)
On the flip side, respondents were concerned about the following:
- Finding money to start their business (72 per cent)
- Convincing lenders that they are a good risk (71 per cent)
- Navigating tax and finance requirements (61 per cent)
Recession fails to dampen Canadian spirit
While corporate and consumer spending have slowed down, it appears that the Canadian entrepreneurial spirit is impervious to economic downturns, according to Paul Edwards, director of SMB and channel strategies for analyst firm IDC Canada.
Statistics Canada reported that no less than 5,000 small businesses shut down last year. Many of these businesses, Edwards said were run by one to nine employees which are considered more vulnerable in a recession.
“Some of these businesses actually grew to the 10 to 19 employee range which registered a growth of more than 1,000 businesses for the same period,” said Edwards.
Anderson of Intuit agrees. She said there’s no shortage of reasons for Canadians to stifle their entrepreneurial pursuits “but we’ve found that simply isn’t happening.”
“The market uncertainty, grim headlines and general anxiety of the past six months haven’t affected the entrepreneurial drive,” she said.
Younger Canadians express confidence
Younger Canadians seem more optimistic about starting their own business. Forty-two per cent of the respondents between the ages of 18 and 24 said it is more difficult to start a business today compared to 61 per cent of Canadians age 55 and over.
When asked about creating a business idea the tables were turned.
Eighty-four per cent of respondents age 55 and over were more inclined to say that coming up with a successful business idea is easy compared to only 62 per cent of respondents between the ages of 18 and 34.
Of the 42 per cent that said they were going to start a business within the next two year, a total of 91 per cent said they would hire their own staff and 82 per cent said they would manage client services.
Tech as an SMB enabler
IT hardware and software tools can be an enabler for many SMB start-ups.
IDC Canada estimates overall tech spending in 2010 will be around $3.4 billion. As much as 61 per cent of that will go to hardware purchases, another 22 per cent to tech services, and about 17 per cent will be spent on software products.
Hardware purchases are broken down as follows: PCs and laptops, 45 per cent; peripherals, 32 per cent; servers, 11 per cent; networks, eight per cent; storage management four per cent.
“The market today is filled with IT hardware and free or low-cost software that can help business owners automate many time consuming tasks that take them away from principal activities of building their business,” Anderson of Intuit said.
Chief among the chores that many entrepreneurs find unsavory, said the manager for the accounting software company Intuit, is handling financials. “People simply do not go out and start their own business because they want to do accounting.”
Unfortunately, she added, majority of businesses tend to fail because of poor cash flow management.
Anderson said business owners typically want to concentrate on developing products and services, meeting clients or selling.
Accounting software tools like QuickBooks can help SMB owners cut down time spend in tracking down incoming and outgoing cash. These tools can help prepare cash flow statements that will be easier for the business’s accountant to work with.
The tools are not meant to replace a professional accountant but it will help them provide higher level services other than bookkeeping, said Anderson.
“The software will cut down on the time the accountant spends sorting through your cash flow. Your accountant can then provide you with higher level service such as taxation and financial advice,” she said.