Entrepreneurship and Barriers to Scaling Up
Exploring the Entrepreneurial Activities of Newcomers in the Greater Toronto Area
Findings
Semi-structured interviews were conducted with 25 service provider organizations offering resources and support to new entrepreneurs in Ontario. The interviews explored themes such as the types of programs and services available to entrepreneurs; the regulatory environment in Ontario for small businesses; participation of women in entrepreneurship; barriers faced by entrepreneurs, especially for scaling up; and suggestions to improve the environment for entrepreneurship. The research team collected data from a variety of service providers, including Small Business Centres (8), Business Improvement Areas (6), Chambers of Commerce (3), Community Centres (3), Employment Services (3), a Community Fund, and a United Nations entity. Of the participants, 15 were women, and 11 were men. The majority of the organizations interviewed were based in Toronto (15), with other organizations based in Brampton (3), Markham (3), Mississauga (3), and Milton (1).
From March 2019 until June 2020, the research team conducted semi-structured individual interviews with 100 entrepreneurs based in the Greater Toronto Area who had immigrated to Canada within the last 30 years. These interviews were completed to examine the level of entrepreneurial activity among newcomers in Ontario, explore the various pathways to entrepreneurship, and understand the barriers faced by newcomer entrepreneurs. With the assistance of several community organizations, chambers of commerce, and business improvement areas across the Greater Toronto Area, the team collected informative and compelling data from a diverse group of participants. Some interviews were completed over the phone, with the majority being conducted in person at various locations across the Greater Toronto Area. The interviews lasted anywhere from 30 minutes to well over an hour.
Connecting with newcomer entrepreneurs from over 30 countries worldwide, all participants owned small businesses employing fewer than 100 people. Two-thirds of the participants arrived in Canada with some post-secondary education or training, with a third of these participants pursuing additional education in Canada. Only fifteen participants arrived with entrepreneurial experience from their previous country of residence. One-third of the participants reported starting a business in the field they had previously worked. Other participants chose to start their business based on necessity rather than their former training or experience. Participants' businesses spanned several sectors, including business/marketing services, consulting services, financial services, food services, restaurants/bakeries, and software-based businesses.
Participants reported many motivations for starting their businesses, including having family and friends who were entrepreneurs; experiences of credential non-recognition and deskilling; wanting to be their own boss; career dissatisfaction; and the perception of Canada as a good place for business. Participants also faced many barriers when establishing and scaling up their businesses, including widespread financial challenges primarily centred around high start-up costs and the inability to secure loans or alternative funding sources. Other significant barriers included various marketing and sales challenges contributing to difficulty attracting customers; a lack of support from family, friends, and the government; limited personal and professional networks; complications related to hiring employees; and experiences with various forms of discrimination (e.g. racism, accentism, sexism, ageism, homophobia, etc.).
Participants expressed a desire for more newcomer-specific supports in the form of mentorship programs, pre-incubation courses, incubators, accelerators, and financing options. Participants also felt that the government could do a more effective job of communicating with newcomers and connecting them to existing entrepreneurship and employment supports and services upon their arrival. There is also a strong need for more newcomer women entrepreneurs and more supports for women in business in general, particularly for women working in male-dominated industries. Participants need more resources dedicated to assisting women entrepreneurs that want to start families, as there is a notable gap in services regarding affordable childcare and practical maternity leave. Refugees would also benefit from additional programming, as they face significant barriers and arrive under different circumstances than other newcomers.
A structured survey was developed to better understand the different factors supporting entrepreneurship among newcomers. Data was collected from 229 participants. Beyond demographic information collected, the survey covered participants’ motivations for starting their own businesses, significant challenges encountered in the process of evolving their businesses, and the efficiency of existing support systems throughout the Greater Toronto Area.
Men represented 60.1% of the participants who completed the survey. The average age of participants completing the survey was 40. Of all participants, 19.7% self-identified as Latin American, 16.2% as being of European descent, 47.8% as South Asian, 8.7% as Black, and 6.6% as East Asian. The majority of participants (42.9%) entered Canada through an Economic category or were sponsored by family (39.15%). Many participants were highly educated, with 71% reporting a bachelor’s degree or higher. Participants had been in Canada for an average of 12 years; however, almost one-third (28.4%) of participants had been in Canada for 20 or more years. Most participants indicated that their small business targets 'the entire Canadian market.' The most frequent entrepreneurial activities and businesses reported were associated with the Food and Beverage industry (24.9%) and the Business and Finance industry (13.1%). The average time in business among participants was 5 to 7 years, with the mean of yearly earned business income ranging from C$30,000.00 to $34,000.00 Canadian.
Common challenges in starting and expanding businesses included financial struggles, navigating through regulations and the tax system, choice of location and industry, and marketing and advertising. Technical, business, and language fluency issues; lack of a network; and unfamiliarity with Canada's business culture, though repeatedly mentioned as barriers by participants in the interviews, were less frequently reported in the survey. The need for supportive services in establishing entrepreneurship was reported by 58% of participants, while only 16% of participants reported receiving support outside of their family.
Participants reporting higher yearly income through their own businesses were individuals who have lived longer in Canada, who did not feel the need to access support services, and who are solely self-employed. Other variables of high significance that correlated with participants success – in which success is associated with higher yearly income – included having more Canadian working experience, a higher level of training or education, and a stronger desire to be an entrepreneur specifically. Survey findings suggest that newcomers who are 'pushed' into entrepreneurship due to difficulties finding full-time employment in Canada, dissatisfaction with their previous job, or discrimination will experience less success than entrepreneurs who have not had such experiences.
Resources
The following are resources and programs in Toronto and the Greater Toronto Area that the interview and survey participants in this study described as helpful.
Pre-incubation
Entrepreneurship Connections is a free, intensive training program offered in Toronto, Hamilton, Ottawa, Vancouver, and Moncton, with sessions in both English and Arabic. The program includes in-class training for up to 4 weeks, plus one year of mentorship and networking opportunities.
Entrepreneurship Connections Pre-Arrival (ECP) is a free program that helps you explore how you could use your experience and education to start your own business in Canada so you can decide if starting a business is the right decision for you. This program will provide you with multiple ways to explore entrepreneurship in Canada, including making connections with business experts and other potential entrepreneurs.
The Newcomer Entrepreneurship Hub focuses on the entrepreneurial spirit of newcomers and assists in breaking down barriers by helping them to successfully establish a business and/or obtain employment. Additionally, the Entrepreneurship Hub (eHub) is available to all participants as a free co-working space for start-ups that require the space to establish and/or work on their businesses.
The Entrepreneurship 101 course was created for aspiring founders who want a masterclass in entrepreneurship. This five-week, on-demand online course offers mentorship from experts, and all the tools you need to launch your startup.
Sponsored by the Province of Ontario in partnership with Toronto Employment and Social Services (TESS), the Ontario Works Self-Employment Development Program (OWSED) is designed to assist individuals currently receiving social assistance support to start their own businesses. Participants complete a comprehensive business plan during the training phase of the program. On-going business advisory support is available for a period of one year as clients implement their business plan.The Business Inc. Program, offered at various Toronto Public Library locations, is designed to assist new and early-stage entrepreneurs to develop and grow their businesses. During the program participants will develop an effective business model, have access to a business advisor and other valuable resources, network with other entrepreneurs. The program is offered in the spring and fall.BIZ Futures is a skills development and business support program designed specifically for persons with disabilities who are starting their own business. It combines business skills development workshops with one-on-one advisory support to help participants develop their business plans and launch their business idea. BIZ Futures is sponsored by Ontario Disability Supports Program – Employment Supports, ODSP-ES.
The Global Business Centre (GBC) is an integral part of the Labour Market Access program. GBC clients come from many different backgrounds; each having their unique needs and plans. Our Business Advisors provide counsel and training on the establishment of new businesses in Canada in the areas of legislation, economy, taxation, resource management, marketing and business communication, networking and any other business related topic. We have a team of 3 Business Advisors who assist each client independently. Clients, together with the Global Business Centre team, have established a large and active network to encourage business relations and growth across many sectors.
The Newcomer Entrepreneurship Hub (NEH) is a program for Greater Toronto Area-based newcomers to Canada interested in gaining knowledge, experience, and support in learning how to open a business in Canada. NEH supports newcomers in all stages of the business cycle through offering training by industry professionals, networking and testing opportunities, and business mentorship.
YWCA Toronto offers a certificate series for newcomer women eager to turn their hobbies, talents or small business ideas into a viable home-based business. The Entrepreneurial Skills for Home-based Businesses series will cover the critical aspects of running a business and help you understand how to earn money through self-employment.
Enterprise Toronto is a one-stop source to start and grow your small business. A team of small business advisors can help entrepreneurs make the right decisions during their business start-up and help develop management capabilities as their business venture grows. Services are free and include expert advice including one-to-one business plan consultation; personal assistance with business registration, name searches, and incorporation; coaching for a range of business challenges, from raising capital, managing cash flow, and accounting to hiring and managing staff, marketing, and social media; access to unique training and networking opportunities, including the annual Small Business Forum and weekly seminars featuring industry experts; information on government programs and business incubation services and access to resources including a subscription to Enterprise Toronto's Small Business Newsletter as well as the City's small business resource library.
Incubators & Accelerators
The DMZ at Ryerson University is one of Canada’s largest business incubators for emerging tech startups. The top-ranked university incubator in North America and third in the world, it helps startups succeed by connecting them with customers, advisors, influencers and other entrepreneurs. The DMZ is open to all startups that meet its criteria — no Ryerson affiliation is required. Startups must: be addressing an important economic or social problem, make innovative use of technology, and have a prototype (at minimum) that is already in the market with or is ready to launch. Once accepted, startups receive four months of access to tailored connections, mentorship, dedicated work space and programming (after which they can pay a membership fee to stay on). Since launching in 2010, the DMZ has incubated more than 230 startups that have collectively raised over $140 million and fostered the creation of more than 2,090 jobs.
The Fashion Zone is an incubator for fashion-inspired startups! Working with Ryerson University's students, alumni, faculty and our growing network of industry professionals, the Fashion zone is focused on launching Canadian fashion businesses. Through a supportive framework and multi-level participant model, the Fashion Zone matches Mentors, Associates and Apprentices to a Fashion zone company, allowing them to apply their existing skills and develop new ones, while accelerating a fashion business. The Fashion Zone also accepts research projects that have a focus on fashion innovation. An extensive resource bank ensures it is able to cater to all fashion-inspired businesses. Ranging from physical equipment, to workspace, mentors and multiple types of advisors, the Fashion Zone helps its clients create and test their products, consult with professionals, commercialize innovative ideas and grow their fashion businesses. Examples of businesses accepted - Wearable Tech, E-commerce, Mobile Applications, Women's Wear, Men's Wear, Children's Wear, Textile Innovations, Functional Apparel (sport, medical, etc), Accessories, Fashion Buying, Magazines, and Visual Arts.
EDGE is a vibrant community of people from all backgrounds and walks of life who believe entrepreneurship can make lasting change in society. We support changemakers as they explore entrepreneurial approaches to creating a more equitable and sustainable world. In collaboration with our partners, EDGE provides new and growing ventures with mentorship, learning programs and support to access funding. EDGE is a gateway to Sheridan’s innovation resources and offers physical and virtual communities where impact entrepreneurs can thrive.
LatAm Startups is a non-profit accelerator in Toronto that works exclusively with international startups. A designated sponsor for Canada’s Startup Visa program, LatAm Startups is a pioneer in bringing the world’s top startups to Canada and helping them scale globally from Toronto.
Financial
The Business Development Bank of Canada is a Crown corporation and national development bank wholly owned by the Government of Canada. Its mandate is to help create and develop Canadian businesses through financing, growth and transition capital, venture capital and advisory services, with a focus on small and medium-sized enterprises.
Community Credit Union has a commitment to keep funds working locally by employing people from within the community and by providing Personal and Commercial loans to members and their small businesses. Our profits stay in our communities, reinvested in our local economies. Putting members first is our credit union’s number one priority. That means that instead of looking for ways to maximize profits for shareholders, Community Credit Union is always looking for ways to help our members make the most of their finances.
Web-based
StartUp HERE Toronto is a collaborative economic development initiative launched to support the growing startup and innovation community in Toronto. The purpose of StartUp HERE Toronto is to connect entrepreneurs to programs, resources and events to help them start, grow and scale their business in Toronto, no matter the sector, be it food, fashion, music or manufacturing.
BizPaL is an online source of information on permits and licences. Launched in 2005, BizPaL is jointly managed by a partnership involving governments at the federal, provincial, territorial and municipal levels. Provinces, territories and hundreds of municipalities have collaborated together to provide you with the permits and licences that may be required to start and grow your business.
Other
Summer Company is a program of the government of Ontario that helps young people between 15 and 29 years old start and run their own summer business by providing funding, advice and services. The province’s Small Business Enterprise Centres and selected non-profit organizations in your community deliver the program. If you’re accepted into the program, you’ll receive: an award of up to $3,000, a first payment of up to $1,500 for start-up costs, a second payment of up to $1,500 once you’ve successfully completed the program, hands-on coaching, and mentoring from business leaders in your community and from your program provider. You also get to keep any profits generated through the operation of your business.