Since the financial crisis a few years ago, Canadian women have been leading the charge into entrepreneurship. A new report have highlighted that it’s a boon for the economy when women start businesses.
State of Women in Startups
Canada has been a global trendsetter when it comes to women in business. According to the 2015 State of the Start-up Survey by Sage, a leading provider of business management software and services to small and medium-sized businesses, nearly two-thirds (62 percent) of startups were founded by women in the past 12 months. And they were launched by inexperienced founders.
It’s likely that this trend will continue moving forward, suggests Nancy Harris, senior vice president and general manager at Sage Canada, who cited funding in the recent federal budget.
“Women entrepreneurs are one of the fastest growing segments in the Canadian economy,” said Harris in a statement. “It should be no surprise, then, that the 2015 federal budget rewarded them with the tools they need to continue to succeed, while also influencing and inspiring other women to follow suit.”
The 2015 Canadian federal budget included important tools to help women own and operate businesses. Over the next two to three years, Ottawa will be spending $5 million to help female entrepreneurs overcome the struggles that are often placed in front of them. Portions of this funding will be allocated to business mentorship models for women, expanded online resources and improved networking opportunities for businesswomen.
At a time when the matter of a work-life balance has become a contentious issue in the workforce, the Sage study also found that more than half of female entrepreneurs (51 percent) report maintaining a “great” work-life balance, compared to just 37 percent of their male counterparts.
Other Key Findings
Generation X-ers were also major contributors to the startup industry. This generation, which was accused of being cynical and lazy in their adolescence, accounted for more than half (57 percent) of all new small businesses. Who’s laughing now?
The survey discovered some other important findings regarding Canadian entrepreneurs:
- 52 percent did not create a formal business plan.
- 68 percent did not fund their startup with outside investors.
- 73 percent of startups are turning a profit.
- 59 percent say their biggest motivation to starting a business was being their own boss.
- 75 percent note their parents were not entrepreneurs.
“The Canadian economy survives on small businesses — when they thrive, so do we,” added Harris.
More on Women in Business
Female entrepreneurship isn’t just a Canadian thing, but it’s being spotted worldwide, including our neighbours to the south in the United States.
Last year, American Express reported in its State-Owned Business Report that female-owned businesses have grown 68 percent in the last 17 years, including more than double since 2011. This level of growth has created a major economic impact: female-driven companies have generated approximately $1.5 trillion in revenues.
Back to Canada.
A Statistics Canada & Industry Canada 2013 report discovered that female business leaders are creating thousands of jobs each year. In 2011 alone, women-owned companies established more than 10,000 jobs, an important statistic since job creation is the biggest challenge facing the Great White North.
Despite the level of job creation, women aren’t at the head of larger businesses or corporations. A TD Economics study noted that women are more likely to helm small- or medium-sized enterprises (SMEs), which is between one and 499 employees, than businesses that had more than 500 employees
So why are women successful in business? Perhaps it’s because they’re experimenting with fresh and innovative business models that could very well lead to social change. Catherine Elliott, a business professor at the University of Ottawa’s Telfer School of Management, told the Financial Post last year that women want to support a philanthropic endeavor they believe in rather than just making money.
Final Thoughts
Although many economists posit that women are less likely to embark upon a business venture because of their inherent characteristics, like risk aversion and occupational choice, the latest numbers suggests women are making significant entrepreneurial gains. With women attaining more educational credentials than ever before, we could soon see female-owned businesses everywhere we go.
Photo via Flickr, Creative Commons
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