The Federal Perspective on Women-Owned Firms Presentation to the Economic Forum On Women Entrepreneurs Ottawa, October 2004 Nancy Graham Director, Policy & Liaison Small Business Policy Branch

2 Overview of Presentation 1. Key small business statistics 2. Profile of women-owned firms in Canada 3. Current federal small business agenda 4. Questions for discussion

3 Key Small Business Statistics

4  There are approximately 2.2 million business establishments in Canada:  1 million are employer businesses (businesses with a payroll)  1,1 million are indeterminate (businesses without employees)  Of the 1 million employer businesses:  98% of the employer businesses have fewer than 100 employees  74% have fewer than 10 employees  57% have only 1 to 4 employees (micro firms)  There are 2.4 million self-employed Canadians. Small Businesses in Canada

5 Small Business as Employer  Approximately 5 million employees on a payroll worked for a small business (fewer than 100 employees).  This represents almost half of the private sector labour force.

6 Self-employment  Increasingly, self-employment is contributing to employment growth. Between 1976 and 2003, it has grown 2.6% per year.  In 2003, self-employment workers represented approximately 14% of the total labour force.  In 2003, the self-employed worked, on average, 40.8 hours per week compared with 35.5 hours for employees.  A third of self-employed persons worked over 50 hours compared with only 5% of employees.

7 Profile of Women-Owned Firms in Canada

8 SME Financing Data Initiative  Created in 1999 in response to the Task Force on the Future of the Canadian Financial Services Sector (Mackay Task Force) which noted a lack of consistent, comprehensive and impartial data on SME Financing.  3 partners:  Finance Canada  Industry Canada  Statistics Canada  3 surveys:  Survey of Suppliers of Business Financing  annual survey starting in 2000  measures supply of financing  covers all financial service providers (census)  Survey on Financing of SMEs  tri-annual survey starting in 2000  measures demand for financing  over 11,000 respondents  Survey of SMEs Needs and Satisfaction  published in 2001  probed the attitudes & perceptions of SMEs owners on issues related to financing  surveyed 10,000 SMEs

9  47% of Canadian SMEs in 2001 had at least one female owner.  2.6 million people were employed by a business with at least one female owner. Profile of Women-Owned Businesses

10 Women and Self-employment  Of the 2.3 self-employed Canadians, over 780,000 are women  From , the number of self-employed women grew by 43% (double the rate of self-employment growth of men)  On average, self-employed men worked 44.7 hours per week, compared with only 33.3 hours for self- employed women.  20% of self-employed women worked over 50 hours per week.

11  85% are micro-businesses, employing fewer than 5 people  they averaged less in sales than those owned by men  nearly half are sole proprietorships Profile of Women-Owned Businesses

12  They are largely concentrated in service industries (81% of all women-owned businesses)  They are largely absent in sectors driving Canada’s growth and innovation – KBI’s and manufacturing Profile of Women-Owned Businesses

13 Small Business Owner Characteristics Women entrepreneurs  54% have a graduate or post- graduate education  32% are under the age of 40  70% have over 10 years of management experience in their business’ industry  56% operate their business out of their home  18% operate in a rural area  7% exported their products or services Men entrepreneurs  47% have a graduate or post- graduate education  21% are under the age of 40  86% have over 10 years of management experience in their business’ industry  56% operate their business out of their home  27% operate in a rural area  13% exported their products or services

14 Current Federal Small Business Agenda

15 Two underlying principles:  Letting the markets function freely – intervene only to fill gaps not served by the private sector  Focusing on client-oriented service improvements using business-like principles of management (e.g. partnering, measuring program effectiveness) Current Federal Approach to Small Business

16 Current Federal Approach to Small Business  Ensuring that the business environment is conducive to growth through:  A stable fiscal situation that translates into lower taxes and interest rates  Framework policies that protect the public interest while fostering innovation and competitiveness  A tax regime competitive with that of the U.S. and other leading economies  Ensuring that limited federal resources are effectively targeted  Subsidies program and grants have been largely eliminated  A shift has occurred towards cost-recovery and repayable contributions  Focus is now on the provision of strategic information

17 Federal Assistance for Small Business  Financing  loan-loss guarantee / credit guarantee  seed financing  risk capital / growth financing  Training /Advisory Services / Networking  general business training / management skills  specialized training e.g. exporting  mentoring  Strategic Information / Research and Analysis  marketplace information  one-stop access to business services and information  dissemination of research finding on common business issues

18 Questions for Discussion  How well do we understand the needs of women entrepreneurs?  Are the needs of women entrepreneurs different from those of their male counterparts? If so, how?  To what extent do general application small business support programs meet the needs of women entrepreneurs?  What is the best way to measure program effectiveness?  Overall, are gender-based programs effective?

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