Despite a financial downturn that’s lasted nearly two years, Canadians are still eager to set up their own business, a recent cross-country survey reveals.
One in three Canadians are interested in striking out on their own.
Of this number, 35 per cent are likely to pursue that dream, according to a survey conducted by Angus Reid Public Opinion for Intuit Canada, makers of the tax software Quickbooks.
The survey, conducted from February 26 through March 1, queried 1,000 Canadians in an attempt to gauge their “entrepreneurial spirit”.
“I was surprised at the enthusiasm Canadians still have to for starting their own business,” Gene Lewis, general manager for Intuit told ITBusiness.ca
At the same time, however, Lewis noted that Canadian entrepreneurs are being held back by two major roadblocks: inability to find financing; and the daunting task of accounting, taxation, payroll and invoice management.
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Top startup motivators
Of Canadians interested in launching a business, 22 per cent said the recession had no impact on their plans and were determined to forge on.
“Potential business owners are driven by a strong sense of creating their own fortunes,” said Lewis,
When asked what motivates them, survey respondents listed the following drivers:
- Control over their own destiny – 52 per cent
- Not having to work for someone else – 41 per cent
- Ability to make more money – 37 per cent
- A better quality of life – 29 per cent
- A sense of accomplishment – 24 per cent
- 18 – 34 year olds (46 per cent)
- 35 – 54 year olds (38 per cent)
- 55+ year olds (17 per cent)
Flexibility in their day was considered the best part of starting one’s own business.
While more men than women are interested in launching out on their own (41 per cent vs. 25 per cent), women are more likely to value the sense of accomplishment that comes from doing so (27 per cent vs. 21 per cent).
Men more than women think a better quality of life is the best part of starting a business (12 per cent vs. 7 per cent).
However, interest in becoming an entrepreneur appears to decrease with age:
Although the recession has dampened both consumer and corporate spending, the downturn has not completely wiped out the Canadian entrepreneurial spirit, said Paul Edwards, director, SMB and channel strategies for analyst firm IDC Canada in Toronto.
For example Statistics Canada surveys from 2009 indicate as many as 5,500 small businesses shut down last year.
Edwards said these businesses were mostly in the one to four and five to nine employee range, which are considered most vulnerable in a recession.
“Some businesses were actually able to grow to the next level — such as the 10 – 19 employee range — which registered a growth of more than 1,000 businesses for the same period,” Edwards pointed out.
Technology as an enabler
For many small businesses and startups, technology is a great enabler, according to Edwards.
“For small businesses, especially those with one to three employees, technology helps automate a lot of chores and allows the workers to concentrate on business generating task,” he said.
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The IDC analyst said technology use varies greatly from business to business, but typical it’s used to: manage finances, the IT backend, as well as in areas such as HR, customer relations, sales and marketing, and production.
Edwards agrees with Intuit’s finding’s that capital funding is the biggest challenge for startups.
“Without a question funding is a big roadblock. For example, the number one hindrance for technology purchase is price,” he said.
Top tech purchases for SMBs
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, 8 per cent; storagem 4 per cent.
The high cost of hardware and software products are pushing a growing number of Canadian small firms to consider cloud-based technologies and software-as-a-service models, Edwards said.
“From a cost standpoint, one of the main advantages of SaaS and cloud services is there is no large capital outlay required. Businesses can pay a monthly fee for the service,” he said.