Pattie Lovett-Reid: Canadians seeing opportunity in entrepreneurship
When reality and dreams may not always align.
Small business owners, in many cases, have been crushed during the pandemic. The survival rate, according to the Canadian Federation of Independent Business (CFIB), stands at 1:6. In other words, 180,000 businesses may permanently have to close their doors as a result of the damage sustained during the pandemic.
To make matters worse, the average small business owner has approximately $160,000 in COVID-related debt because government support programs have covered only about one-third of their losses.
These number are staggering and it would be reasonable to think these stats were enough to discourage anyone from starting up their own business.
But no so fast.
A new survey, titled the RBC Small Business Poll, found that despite the pandemic's harsh impact on the economy, the optimism around becoming an entrepreneur is still alive.
Here are a few of the highlights:
- 55 per cent of Canadians polled said they have thought about owning a business - highest level since 2017
- 41 per cent of aspiring entrepreneurs has said the pandemic has made them more likely to want to start a business
- 58 per cent believe the pandemic has created new opportunities
To be fair, I get it. In terms of employment, a corporation can let you go at anytime. However, a small business owner can pivot and look for new targets and opportunities. In other words, they may have more control over their destiny.
In fact, according to the RBC survey, 69 per cent perceive business ownership as an option that offers more control over their career than traditional employment. And perhaps it is this sense of control that has 41 per cent of respondents saying the pandemic has made them more likely to want to start a business.
Is this optimism misplaced? I hope not.
As an economy, we should applaud and support this mindset. Small businesses represents half of Canada's GDP and 60 per cent of private sector employment. Over 92 per cent of businesses in Canada are small or medium-sized.
Does the dream of entrepreneurship still really make sense?
Dan Kelly, president and chief executive officer of the CFIB, told me via email, “fortunately, many young people are turning to entrepreneurship and self-employment, often rejecting the confines of 9-5 employment. Like all periods of societal change, the pandemic will cause people to rethink how they do business and reveal new opportunities, particularly as many long-term businesses close their doors."
However, while the desire is there, the reality is those who did best during the pandemic were salaried employees.
Bottom line - if small businesses are going to thrive the economy needs to open, possibly government programs extended and Canadians need to walk the talk and support local.
In the meantime, many business still need to pivot and embrace new ways of doing business. Their financial survival is going to depend on it.