By: Hadaf Zubi
Of the 2.4 million businesses registered in Canada at the end of 2011,
1.1 million were small businesses, and they employed 48% of Canadians
in the private sector.
Industry Canada’s most recent estimates put the proportion of
women-owned small businesses at 17%, which would represent about 187,000
firms. Since 2001 the proportion of Canadian women employed in senior
management positions has risen 5%, and the proportion employed in
natural and applied sciences has risen 10%.
The proportion in women in the workforce stayed virtually the same, so
it is surprising that even though the number of professional women
employed in Canada has risen since 2001, the ratio of self-employed
women to men has hovered around a 35-65 split. With more and more women
working in professional occupations, what are the major obstacles
holding them back from starting businesses of their own, and what can be
changed?
The University of Ottawa’s Telfer School of Management’s
“Taskforce for Women’s Business Growth” 2011
report discusses some of the challenges faced by women-owned
businesses, such as the absence of a national women’s entrepreneurial
strategy, a lack of supplier diversity initiatives, and a shortage of
commercial lending. The resolution of these issues would enable more
women to form small businesses, so what is being done to fix these
problems?
Canada lacks a coordinated national women’s economic development
strategy. As the Telfer report suggests, “(A) national strategy would
support increased funding to existing women-focused small business
training programs and program expansion in those regions that do not
currently support such programs, including Quebec, Southern Ontario and
Northern Canada.”
Although it is the centre of the Canadian economy, the GTA has no
women-specific government-sponsored funding program analogous the
Government of Canada-sponsored Women’s Enterprise Initiative Loan
Program. The Program, funded through Western Economic Diversification
Canada, provides loans of up to $150,000, along with advisory services
and networking opportunities for women-owned businesses west of Ontario.
Women-owned businesses in the GTA have access to several networking
and support groups, though. Organizations like The Toronto Business and
Professional Women’s Club, the toronto chapter of the Women’s
Entrepreneurs’s Meetup.com group, or the Hamilton Immigrant Women’s
Centre all provide training and advisory services for women who want to
start or grow their business. The availability of mentorship is
essential to the formation of Women-owned businesses. According to
recent research
by BMO, 83% of potential female entrepreneurs surveyed said having
access to mentors would be important if they were to start their own
business.
A second important element to supporting women’s business growth is a focus on leveraging supplier diversity.
In the USA the Small Business Administration has
set aside small business funding
for Women-owned small businesses (WOSBs) bidding on government
contracts that are under $5 million for manufacturing, or under $3
million otherwise.
In addition to providing loans or loan guarantees, the SBA maintains
Women’s Business Centers in major population centers in every state.
These funding programs were established to help the US Government
fulfill its stated goal of 5% Women-owned procurement.
WEConnect Canada, an organization that certifies businesses as
Women-owned, states that the 5% goal has never been met because of a
lack of consequences. But they still think the program is beneficial,
and that the Canadian government should “establish procurement targets
for SMEs and in particular, women-owned enterprises.“
They go on to suggest that “strategic SME procurement policy is an
under-utilized mechanism to enhance supplier diversity and hence,
Canadian competitiveness.”
Government procurement targets are essential to encourage supplier
diversity on Canadian government contracts, which the Canadian
Federation of Independent Business has consistently pointed out are
perceived by their members as being opaque, if not outright unfair.
A third element that would clear the path for more Women-owned
businesses would be increased access to commercial capital and dedicated
financial resources. Although overall loan volume is growing in
Canada, much of that growth is occurring in Quebec and Alberta. Ontario
loan volumes are declining, especially in the sub-$500,000 space.
Government sponsored Women-focused lending programs, such as those
offered in the USA or other parts of Canada, would certainly alleviate
the cash crunch for Women-owned businesses in the GTA.
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