A new study provides a revealing glimpse into the world of women-owned small businesses in Canada, as well as the funding challenges they encounter.
Visa Canada has published a new study titled The State of Canadian Women’s Entrepreneurship, which draws from a survey of almost 895 business owners and decision makers, of which 243 were women business owners.
When asked about their motivations for starting a business, 44% of female business owners cited a desire to achieve financial independence. Nearly the same number (42%) identified flexibility, and an equal number were looking for a better balance for work and family life (36%) and a chance to create their own environment (36%). “Making money,” cited by 29%, fell just outside the top five.
When it comes to starting their business, 22% said they had difficulty raising capital/funding, making it the third top answer behind “growing as fast as I needed” (23%) and “finding the tools to grow and manage my business (32%).
Focusing on how female small and medium business owners fund their business, the survey revealed that only 14% used a business loan; 5% received partial funding from investors; 5% requested all of the funding from one investor; and 3% requested it from multiple investors.
However, nearly three quarters (73%) of female entrepreneurs self-funded their businesses. The report attributed it to the fact that many women-led businesses grow from hobbies, so they do not require seed capital or outside funding as much as men do.
For 31% of women entrepreneurs who participated, the need for funding doesn’t end immediately. They said that even after the business is established, they still find raising funds a challenge to run the business; the problem shares second place with “sustaining long-term success.” Another 37% cited “finding new customers” as a problem, making it the top concern among women business owners.
As for the question of where they would choose to direct more funding, the participants gave a variety of answers. The most said they would focus on advertising and marketing (19%), followed by increasing or growing their safety net (17%).
Other top answers included investing in newer technology (13%); creating new products (10%); hiring more staff (9%); and providing better benefits to employees (7%).
The survey also asked female business owners what topics they would look for from a workshop offered by an outside source. They found that 33% would be interested in learning to use social media to promote their businesses; 30% would like to know how to grow their business through digital marketing; and 23% would like to know how to access additional funding. Controlling and tracking spending was also a point of interest for 12% of participants.
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