New study finds Millennial Small Business Owners are looking to disrupt their industries
TORONTO, Oct. 18, 2016 /CNW/ - Eighty eight per cent of small business owners (SBOs) agree passion trumps personal financial gain, and they're willing to take risks to get their passion project off the ground. Despite nearly half (46%) having yet to turn a profit, the vast majority (85%) are willing to take financial risks to grow their business.
Commissioned by American Express Canada, in partnership with Startup Canada, the Millennial Entrepreneur Study sought to uncover the entrepreneurial motivations, mindsets and experiences of millennial SBOs compared with that of previous generations.
Small business owners have their sights set on growth, with nearly all (93%) planning to grow their business within the next year. In addition, nine in ten (90%) believe their offering is superior to their competition and 76 per cent aim to disrupt their industries.
"Millennial entrepreneurs are the next generation of industry disrupters and game changers making real impact in their communities and beyond," says Paul Roman, Vice President & General Manager, Global Commercial Payments, American Express Canada. "They are not just the leaders of tomorrow, they are leaders today."
"What excites me most about millennial entrepreneurship is that we are seeing Canadians from various backgrounds taking risks and starting companies with the goal of pursuing their passions," says Victoria Lennox, CEO and Co-Founder of Startup Canada. "We must now focus on helping millennial entrepreneurs to transform their passions into profit-making companies."
Millennials Feel Married to their Business
Nearly three quarters (74%) of millennial small business owners "feel married" to their business – it's not just the financial commitment, but rather their love and passion for what they do that fosters the matrimonial connection. In fact, nearly one in three (30%) cite the reason they started their business was to turn their passion into a career, compared to 17 per cent who were looking to gain financial independence.
SBOs Concerned over Cash Flow
Enthusiasm alone can't fund a business so it's of little surprise that nearly half of all surveyed (47%) concede that cash flow concerns keep them up at night.
"While it's encouraging to see so many small business owners prioritizing passion over profit, it's important to strike a balance between the two," says Roman. "Cash flow is the life blood of any business, and managing it effectively is the key to long-term success."
While 75 per cent of small business owners manage their own finances, more than half (55%) report difficulties with managing cash flow. In addition, more than one in five SBOs (21%) indicated cash-flow management as the most challenging aspect of managing their business finances. Other top challenges include:
- Accounting/bookkeeping (21%)
- Taxes (16%)
- Budgeting and forecasting (13%)
Money Matters: Financing the Dream
Despite concerns, Canadian millennial SBOs are putting in the extra work and getting creative to fund their dream projects:
- 42 per cent of millennial entrepreneurs surveyed hold a second job.
- Nearly half (48%) report paying themselves below market wage (of those who actually pay themselves a wage).
- 52 per cent of millennials used their personal savings to start their company.
Startup Canada and American Express will continue the conversation on millennial entrepreneurship on the popular Startup Canada Twitter program, #StartupChats, throughout the Fall. On November 2, 12-1 pm ET, entrepreneurs and experts are invited to discuss Managing Small Business Cash Flow. On November 21, 12-1 pm ET, the topic will be combining Passion with Profit. Registration is open for these events at www.startupcan.ca/events.
About the Research
Commissioned by American Express and Startup Canada, the 2016 Millennial Entrepreneur Study was conducted through an online survey from August 16 - September 8, 2016 engaging 511 entrepreneurs from across Canada, representing all age cohorts. Based on the findings of the survey, researchers interviewed a random sample of 30 respondents to dive deeper into the findings. The margin of error for a representative sample of this size (n=511) is ± 4.2 per cent within a 95 per cent confidence interval.
The study, which included a national survey, a correlative analysis conducted in partnership with Ryerson University-based startup Steadfast Beta; and, in-depth interviews with a random sample of entrepreneurs, is available in its full form at www.startupcan.ca/millennialSBOs.
About American Express in Canada
American Express in Canada operates as Amex Bank of Canada and Amex Canada Inc. Both are wholly owned subsidiaries of the New York based American Express Travel Related Services Company, Inc., the largest operating unit of the American Express Company. Amex Bank of Canada is the issuer of American Express charge and credit cards, with outstanding products like The SimplyCash ™ Card from American Express ©, The American Express® Gold Rewards Card, and the American Express® AeroplanPlus® Gold Card. American Express opened its first offices in Toronto and Hamilton in 1853. For more information, visit AmericanExpress.ca or connect with us at Facebook.com/AmericanExpressCanada and YouTube.com/AmericanExpressCAD
About Startup Canada
Startup Canada is the leading national social enterprise supporting and giving a voice to entrepreneurs through online programs, national awards, flagship events, and partnerships with private sector and government to foster a community for startup and small business success across the country. For more information, visit www.startupcan.ca.
SOURCE American Express Canada
For further information: Nicola McGroarty, On behalf of American Express Canada, [email protected], 416-644-2274