Intuit Study Finds Majority of Canadian Small Businesses Started With
Less Than $5,000
MISSISSAUGA, ON, Oct. 10, 2012 /CNW/ - Canadian small business owners
have always been known for doing a lot with a little. Now, a new survey
from Intuit Canada, makers of QuickBooks®, the No. 1-selling small business accounting software in Canada, shows how our bootstrapping entrepreneurs are getting the
The survey was conducted to gain insights from successful small business
owners at different stages in the entrepreneurial lifecycle and found
that the majority (58 per cent) of Canada's small business owners
started out with less than $5,000.
"Canada's entrepreneurs have invested their lives to pursue their
dreams," said Jeff Cates, managing director of Intuit Canada. "This
study provides an opportunity for all of us to better understand what
it takes to run a successful small business. Insights like these help
Intuit design products and services focused on helping start-ups make
the most of their initial financial investment."
A majority of small business owners reported making a risky financial
decision when they started out. A total of 19 per cent said they took
out a loan or line of credit, 18 per cent drained their savings
account, and 15 per cent maxed out their credit cards.
The study also found that one-in-three small business owners
underestimated the amount of time they would spend on financial
"All the money in the world won't help a budding entrepreneur who
doesn't understand basic accounting principles," said Mark Simpson,
professor, Institute of Entrepreneurship and Community Innovation,
George Brown College in Toronto. "While the allocation of resources
might change based on the business, the bedrock principles of
understanding cash flow, knowing your customers and minimizing risk
remain. Small business owners can set themselves up for success by
embracing these principles and investing in the right financial
The Critical First Year
The first year can be both difficult and rewarding for small business
owners. Respondents said that:
Getting started is tough: One-in-three (34 per cent) admitted that their
first year was their hardest.
Perseverance paid off: The majority of Canadian entrepreneurs (57 per
cent) felt they were successfully up and running within a year.
Customers reward: Making a profit (43 per cent) and getting their first
customer (30 per cent) where their greatest accomplishments in their
first year of business.
Turning a passion into a viable business is the goal for many, but it
doesn't come without some hard lessons learned. When looking back on
year one, successful small business owners wished they had:
Learned financial management - 17 per cent.
Found a mentor - 15 per cent.
Created a business plan - 14 per cent.
Sought professional advice earlier - 11 per cent.
"When I first started my business, I quickly realized that working on
multiple projects and revenue streams meant I needed to get a handle on
my finances and develop a better understanding of my business," said
Jerry McIntosh, owner of McIntosh Media in Toronto. "I was hesitant at
first, not knowing a thing about accounting, but I found QuickBooks to
be very intuitive and in no time I was navigating the program,
developing reports and issuing invoices."
Is $5,000 Enough?
Experts emphasize the importance of spending time and money on planning
and education in order to get off to a good start.
"The first year of a business is critical. Preparing yourself, by doing
market research, attending conferences, or enrolling in a business and
financial management course, is a great way to build a solid foundation
for your business," said George Brown College professor Simpson. "Above
all, entrepreneurs need to develop a network, forge relationships, and
make face-to-face connections. These are the investments that will see
you through those inevitable rough patches, and lay the foundation for
The full report is available at quickbooks.ca/5000.
Canadian Entrepreneurs by the Numbers
Data from Statistics Canada shows that small businesses (those with less
than 100 employees), play a vital role in the economic success of our
600,000 - Jobs created over the last decade by small businesses.
20,000 - Jobs created in the last year by small businesses.
48 per cent - Portion of the total private sector labour force employed
by small businesses.
42 per cent - Portion of private sector GDP in Canada contributed by
At the same time, data shows these fledgling new businesses remain
85 per cent survive one year.
70 per cent survive after two years.
51 per cent survive after five years.
About the Survey
Angus Reid Public Opinion conducted an online survey between Aug. 16-21,
2012, among a representative sample of Canadian small business owners
recruited from the Angus Reid Forum, Canada's leading online national
access panel. The margin of error for a sample of this size is plus-or-minus 4.4 per
cent, 19 times out of 20, and the results have been statistically
weighted according to Statistics Canada's most current age, gender,
region, and education Census data.
About Intuit Canada
Intuit Canada ULC is a leading provider of business, financial and tax
management solutions for small- and mid-sized businesses, consumers and
accounting professionals. Its flagship products and services, including
Quicken®, QuickBooks®, QuickBooks® Enterprise Solutions, SuccèsPME,
TurboTax, and ImpôtRapideMC, simplify personal finance, accounting
software and tax preparation and filing.
Additional offerings include ProFile®, a professional tax preparation
software suite, the QuickBooks ProAdvisor Program and the Intuit
Developer Network for professional users and developers. All are
provided by Intuit Canada or through its partners.
Intuit Canada has employees across Canada and offices in Edmonton, AB,
and Mississauga, ON. Intuit Canada is an affiliate of Intuit Inc.,
which is listed on the Nasdaq.
Stay up to speed with QuickBooks in Canada on Twitter (@quickbooksCa), or like us on Facebook (facebook/QuickBooksCanada).