Small businesses can start on a shoestring, create jobs for private sector, studies show

MONTREAL — The majority of Canada’s small business owners started out with less than $ 5,000 to get up and running, suggests a survey on entrepreneurship.

Intuit Canada said Friday its research found that 58 per cent of small business owners surveyed started out with less than $ 5,000 and 79 per cent started their business with less than $ 20,000.

“Canada is a nation of small businesses,” said Barb Anderson, global product leader at Intuit, an accounting software company for small and mid- sized businesses.

Anderson said 98 per cent of businesses in Canada are smallor medium- sized.

The survey included business owners that had 20 employees or less and were service and product businesses.

Intuit Canada also said 19 per cent of those surveyed took out a loan or line of credit and 18 per cent drained their savings account when they started their businesses.

The first year of business can be a “really tumultuous time” and business owners have to get a handle on money coming in and money going out, she said.

About 85 per cent of new businesses survive one year and that drops to 70 per cent in the second year, Anderson said from Mississauga, Ont.

“One of the key reasons we know that businesses don’t survive is due to poor financial management.”

Intuit Canada said data from Statistics Canada shows that small businesses with fewer than 100 employees created 20,000 jobs in the last year and 48 per cent of the total private sector labour force is employed by small businesses.