Small and medium-sized enterprises (SMEs) play a significant role in the Canadian economy. In fact, SMEs account for over 90% of all businesses in Canada and employ millions of workers (research from Stats Can).
Among these SMEs, a growing number are now owned or led by women entrepreneurs. According to a report from the Women Entrepreneurship Knowledge Hub, women-owned SMEs are on the rise in Canada - though there's still a long way to go to achieve gender parity.
In this blog post, we'll dive deeper into the state of women-owned SMEs in Canada and explore the barriers to growth for Women-owned businesses.
Are you a woman-owned or led business that is looking for consultation on navigating available financial resources, networking, or social impact evaluation of your business? Reach out to us at ASBB for a free consultation here.
The state of women-owned businesses in Canada
There has been growth in Canada regarding women’s representation in business. In 2018, 15% of all SMEs were women-owned, which is an increase from 11% in 2014 (research from the Business Development Bank of Canada). Today, we see 18% of Canadian small and medium-sized businesses are owned by women, accounting for more than 1.5 million jobs across the country. (Research from the Women in Entrepreneurship Report).
This increase is significant considering how rapidly women-owned businesses are gaining market share in the SMEs sector. However, the percentages are still low and there is still a lot of work to be done.
When looking at growth rates, the women-owned SMEs sector is growing faster than the average SME sector. Women entrepreneurs are launching businesses at a rate almost twice as fast as men. The statistics also show that female entrepreneurs are more likely to start their businesses in the service and retail sectors, according to the Women Entrepreneurs Report. The report suggests that closing the gender gap between male and female entrepreneurs could add $150 billion to the Canadian economy by 2026.
The COVID-19 pandemic has had a significant impact on all businesses, but women-owned SMEs have shown remarkable resilience. A study by TD found that women-owned SMEs in Canada are more likely to have pivoted their businesses during the pandemic, with 88 percent of female entrepreneurs making changes to their business models or operations (Research from https://economics.td.com/women-in-business and The Women in Entrepreneurship Report). Many women entrepreneurs have demonstrated adaptability by shifting their businesses online or offering new products and services to meet changing consumer needs. While women continue to face challenges in entrepreneurship, this is something to be celebrated and is a leading indicator that women-owned businesses will continue to gain market share in the SME sector.
Challenges women are facing in owning an SME
While there have been significant strides made by women to ensure success in their entrepreneurship journey, they still continue to face significant challenges such as:
1. Access to Capital: One of the primary challenges women-owned SMEs face in Canada is a lack of access to capital. Women entrepreneurs often face significant barriers in obtaining loans or investment capital, especially if they are unable to provide collateral. Women are subject to systemic bias in the banking sector, resulting in their loan applications being rejected more frequently than those submitted by their male counterparts. More interventions are needed to ensure that women entrepreneurs have access to capital.
2. Work-Life Balance: Many women entrepreneurs face significant challenges in balancing work and family life. Often women bear the majority of responsibilities for household chores and caring for children, which can make it difficult to devote the time and energy required to operate a successful business. More initiatives should be undertaken to support women in managing work-life balance, such as subsidized childcare or flexible work arrangements.
3. Access to Networks: One of the key challenges for women-owned SMEs relates to the lack of access to networks. Lack of access to networks denies women entrepreneurs the opportunity to share ideas, develop relationships, and expand their business ventures. Women entrepreneurs should be actively included in existing networks like business associations, mentorships, and accelerators that will enhance their opportunities for business success.
4. Cultural and Social Barriers: There are cultural and social barriers that make it difficult for women to start and manage their businesses. For instance, some people still believe that women are not suited to lead a business. Gender bias can make it difficult for women to get their ideas heard, attract finance, or access social media channels, thereby limiting their growth potential. To overcome this challenge, society, family, and business partners alike need to celebrate the achievements of women entrepreneurs in the marketplace and work towards encouraging more women to start their own ventures.
5. Government Policies: The Canadian government has implemented various policies designed to boost gender equality and encourage women's entrepreneurship. These include access to loans and grants, tax credits, and setting targets for female representation on boards of large corporations. More needs to be done to ensure that these policies are impactful in addressing the unique challenges faced by women entrepreneurs and that more women become aware of and can confidently access these programs.
What are some current national initiatives for female-owned businesses?
The Canadian government and allied organizations have started to take some steps forward in prioritizing equity, inclusion, and diversity to make entrepreneurial opportunities accessible to everyone, including women. This entails providing the required support, resources, and women-oriented infrastructure to help them start, grow, and expand their businesses. Below are some key areas that have been identified as priorities for women (research from: https://canadiansme.ca/breaking-barriers-making-entrepreneurship-accessible-to-women-in-canada/) :
Ensure women have access to funds and financing options to meet their financial obligations while running a business.
Provide entrepreneurial training and mentorship programs along with educational resources that can help women entrepreneurs develop the skills and knowledge they need to succeed.
Creating networking opportunities that allow women entrepreneurs to connect with other like-minded individuals and share their experiences and insights.
Address the social obstacles that prevent women from pursuing entrepreneurship and establish a more inclusive business environment.
Eliminating roadblocks and improving women’s access to entrepreneurship is a crucial way to mitigate the challenges on both the social and operational fronts. It also has the potential to break barriers towards gender parity and an inclusive business ecosystem to enable female-owned businesses to achieve greater heights.
How can ASBB help organizations and businesses dedicated to seeing women entrepreneurs succeed?
At ASBB Consulting, we are deeply committed to empowering women in the business arena and supporting organizations that champion the cause of women. Recognizing the unique challenges and opportunities that women-owned enterprises and non-profits encounter, we have curated a suite of advisory services tailored to their distinct needs. Here’s how we can make a difference:
1. Customised Market Insights: We equip women entrepreneurs with a nuanced understanding of market dynamics, trends, and consumer behavior, enabling data-driven decision-making that aligns with their business goals.
2. Strategic Advocacy: Our experts delve into systemic barriers hindering women in business. We advise on strategies to advocate for inclusive policy reforms and create conducive environments for women entrepreneurs.
3. Skill Enhancement: ASBB Consulting organizes specialized training sessions and workshops, enhancing essential business competencies such as proposal and grant writing, global market penetration, and labour market analysis.
4. Risk Forecasting: We guide women-owned ventures in preemptively identifying market risks, ensuring that they're well-prepared with robust contingency plans.
5. Expansion Roadmaps: Our team assists in mapping out scalable growth trajectories, be it through diversification, innovation, or geographic expansion.
6. Benchmark and Strategy Analysis: We assess women-led enterprises against industry standards, providing actionable feedback and strategies to gain a competitive edge.
7. Societal Impact Evaluation: For entities focused on driving societal change, we offer insights into gender equality, women’s empowerment, and broader community development objectives.
8. Capacity Building for Nonprofits: For non-profit organizations dedicated to women's causes, we offer specialized advisory on grant sourcing, program design, and impact assessment to amplify their societal reach and efficacy.
In essence, ASBB Consulting stands as a beacon of support for women-owned businesses and nonprofits. We believe in harnessing the potential of women in the entrepreneurial ecosystem, and our tailored services are a testament to this commitment.
If you’re a woman-owned business, reach out to ASBB for help in maximizing the opportunities that Canada has available to you.
Reach out to us here, or send a direct communication through email or phone if you would like a free consultation!