The Federal Perspective on The Federal Perspective on Women-Owned FirmsWomen-Owned Firms

Presentation to the Economic Forum

On Women Entrepreneurs

Ottawa, October 2004

Nancy Graham

Director, Policy & Liaison

Small Business Policy Branch

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Overview of PresentationOverview 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

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Key Small Business StatisticsKey Small Business Statistics

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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 CanadaSmall Businesses in Canada

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Small Business as EmployerSmall 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.

Private Sector Employment by Size, 2002

35%

49%

16%

Small Business

Medium Business

Large Business

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Self-employmentSelf-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.

Usual Weekly Hours of Employees and Self-employed, 1987 and 2003

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1987 Employees 2003 Employees 1987 Self-employed 2003 Self-employed

(%)

< 30 hours 30-39 hours 40 hours 41-49 hours 50 hours or more

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.

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Profile of Women-Owned Firms in CanadaProfile of Women-Owned Firms in Canada

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SME Financing Data InitiativeSME 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

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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 BusinessesProfile of Women-Owned Businesses

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Women and Self-employmentWomen and Self-employment

Of the 2.3 self-employed Canadians, over 780,000 are women

From 1991-2001, the number of self-employed women grew by 43% (double the rate of self-employment growth of men)

Usual Weekly Hours, by Class of Worker and Sex, 2003

0%

10%

20%

30%

40%

50%

60%

70%

Male Employees Female Employees Male Self-employed Female Self-employed

(%)

< 30 hours 30-39 hours 40-49 hours 50 hours or more

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.

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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 BusinessesProfile of Women-Owned Businesses

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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 BusinessesProfile of Women-Owned Businesses

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Small Business Owner CharacteristicsSmall Business Owner Characteristics

Women entrepreneursWomen 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 entrepreneursMen 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

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Current Federal Small Business AgendaCurrent Federal Small Business Agenda

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Two underlying principles: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 BusinessCurrent Federal Approach to Small Business

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Current Federal Approach to Small BusinessCurrent 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

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Federal Assistance for Small BusinessFederal 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

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Questions for DiscussionQuestions 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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