Despite the many challenges faced by Canadian businesses throughout the COVID-19 pandemic, entrepreneurship and new business creation were strong over the last year, according to a new survey by Intuit Quickbooks.
Intuit conducted the survey in April, polling approximately 2,000 Canadians (589 of whom identified as entrepreneurs) about the impact of the COVID-19 pandemic on their businesses, barriers and motivations to entrepreneurship, and how businesses are embracing digital tools.
“Entrepreneurship has continued to grow since the beginning of COVID-19, both because of and in spite of the challenges it presented.”
One in five (21 percent) of Canadians surveyed said they started their business during the pandemic. This reflects approximately two million Canadians, according to Intuit. The number is notable compared to past years, as in 2018 a BDC report found about 44,700 Canadians started a business, which it reported as the highest number in a decade, at the time.
“It’s exciting to see that the entrepreneurial spirit in Canada is alive and well,” Intuit said in its report on the survey. “As our survey reveals, entrepreneurship has continued to grow since the beginning of COVID-19, both because of and in spite of the challenges it presented.”
According to the survey, thirty-nine percent of businesses were started in 2020 because entrepreneurs had more time due to the pandemic, 23 percent were started due to financial pressures faced by the entrepreneur, and 15 percent of entrepreneurs started their businesses because they saw an unmet need in the market.
The survey also revealed that current and aspiring entrepreneurs are open to embracing digital tools, as the pandemic has accelerated tech transformations in a number of sectors. More than half of respondents sell their services online, and nearly 40 percent sell online only.
RELATED: Intuit Canada joins Digital Main Street to support small businesses with digital transformation
The results of Intuit’s survey reflect what has been seen in the Canadian innovation ecosystem. While tech startups saw revenue decline and were forced to scale back their activities at the onset of the pandemic, many found new market opportunities, pivoted their offerings, and saw striking growth. Intuit’s survey revealed that while one-quarter of COVID-19 affected businesses paused or closed their business, 16 percent managed to grow, and 13 percent pivoted.
One such pivot was meeting scheduling platform Zoom.ai, which adjusted its offering from an automated personal assistant to a tool that helps users schedule meetings. Following this change, the startup claimed it saw a surge in new user registrations, customers, and active users.
Another such startup was The Canadian Shield, which spun out of education technology startup InkSmith in March 2020. The Canadian Shield obtained a license from Health Canada to produce medical supplies and opened a 50,000 square-foot manufacturing facility for its medical mask products.
Intuit’s survey also revealed there is a sense of optimism among Canada’s entrepreneurs, with 73 percent having a positive outlook about the future. This finding is in line with a recent report from Wagepoint, which found that 65 percent of Canadian small business owners are optimistic that their business will recover when the pandemic is over.
RELATED: Women-owned businesses suffering greater staff reductions due to COVID-19, report finds
Despite this optimism, other reports from the last year have highlighted that many business owners are still facing unique challenges. This is particularly true for entrepreneurs from underrepresented groups, such as women, visible minorities, and people with disabilities.
Reports from 2020 highlighted that the COVID-19 pandemic has disproportionately impacted underrepresented founders, with 85 percent of underrepresented entrepreneurs in Canada experiencing a loss in revenue, contracts, and cash flow.
Respondents to Intuit’s survey also cited several areas of support needed to succeed post-pandemic, including more government funding and easier access to funding more generally.
The federal government has begun scaling back some of its COVID-19 support programs for businesses, including the Canada Emergency Wage Subsidy, which is set to end in September.
Image source Unsplash.
