Across Canada, an interest in entrepreneurial endeavours is subsiding.
According to a report by RBC, self-employment rates are going down and so is the appeal to start one’s own business.
Released on Oct. 5, the report points to a number of factors that have played a role in the “decades-long decline” in individuals wanting to start their own business. Currently, the self-employment rate for businesses with paid staff sits at 13.1 per cent. According to Statistics Canada, that number was just under 15 per cent in 2020 and at around 17 per cent in 2019.
Some of the factors outlined in the report include a stronger labour market, the fallout from uncertainty with the pandemic, and “soaring” inflation. With all the factors playing against a person’s push to start a business, one expert noted it might not be the best time for someone considering to be an entrepreneur.
“When you look at the high-cost pressures that a number of small businesses are experiencing right now with inflation, access to capital… high costs of interest rate, this is probably not an ideal time to be an entrepreneur. (Or) to try to start up a new business,” said Chuck Davidson, president of the Manitoba Chambers of Commerce.
He added that despite the challenges, businesses should be given a climate in which they can succeed.
Janette Jajalla, owner of the Baker’s Bowl Bakeshop in Winnipeg, said that she got started on the entrepreneurial path to join a market that her community was a part of. Having opened her business in 2016, she added there have been challenges. But through it all, she said she’s enjoying it alongside her husband.
“Whatever other small businesses (are) experiencing right now, our business is not an exception… quitting is out of our mind. We started it and have banked in a lot of effort. And not only efforts but resources to this business,” said Jajalla. “This has become our bread and butter.”
Jajalla moved to Winnipeg in 2011. She and her husband carried on their experience in baking to then distribute products for another bakery. The plans for a separate business came when they created their own product lines.
With the pandemic, she added that it wasn’t easy. She mentioned having to cut down on costs and rethink ways to keep their customers coming. She said that the business is now moving into different segments, including collaborating with other companies to put their products out there.
Being a business owner, according to Davidson, is something people take great pride in. It’s something he said people try to take to the next level. He added that programs encouraging business owners to embark on their entrepreneurial journey are great in getting younger Canadians involved. With all the barriers that prevent people from getting on the path of self-employment, he said that such programs need to be supportive.
The RBC report goes further in highlighting the declining interest in business for younger Canadians, aged 35 to 44. That rate sits at 2 per cent currently, down from 3.3 per cent in 1998.
But to Davidson, even if there is a decline in interest, there will always be those looking to start their own businesses.
“It doesn’t matter what community I go into. If individuals identify that there’s a gap or a business opportunity that exists in a community, they’re going to try to take advantage of it,” said Davidson.
“My sense is that once inflation is tempered a little bit, the situation should improve.”
According to the Manitoba Bureau of Statistics, the province had over 43,000 businesses with paid staff as of February this year. Small businesses made up 97.8 per cent of that number. Comparatively, across Canada, the number of businesses with employees was just over 3 million.
For businesses without staff, that number was up at 86,333 in Manitoba. Similarly, nationwide that number was a little over 1 million.
Speaking about people looking to start their own businesses, Jajalla advised finding what works with one’s strengths. She said that challenges can come around, but they should be seen as a opportunity to improve.
“That that as an opportunity to improve yourself and enhance whatever skills you have, so that (they) could turn into benefits,” said Jajalla. “Never give up.”