Promoting small business and entrepreneurship across Ontario
A new web site and newsletter is now available from the provincial Ministry of Small Business and Entrepreneurship.
Check out the web site at http://www.sbe.gov.on.ca/ontcan/sbe/en/home_en.jsp and the newsletter at http://www.sbe.gov.on.ca/ontcan/sbe/en/news_sbbeat_en.jsp
From the first issue of the Small Business Beat ....
A SNAPSHOT of small business
Opening a small business is a big decision. It requires belief in your product, understanding the market, establishing a business structure, often assuming financial risk and, ultimately, setting out on your own. But are you really alone? Not at all! In taking this step, you also become a member of the vast and highly supportive network that is the small business community of Ontario.
So what defines this community that you’ve joined? What is a typical small business? How do most businesses get started?
Most businesses in Ontario are very small, with close to three-quarters employing fewer than five people. For statistical purposes, the Province of Ontario categorizes a business as “small” if it is a goods-producing firm with fewer than 100 employees or a service firm with fewer than 50 employees.
Companies above that size, with up to 500 employees, are considered medium-sized. The popular term “SME” (small and medium-sized enterprise) combines all of these components of the economy into one sector. Together, SMEs make up 99 per cent of Ontario’s businesses and account for more than 50 per cent of Ontario’s jobs.
Currently, about 340,000 SMEs operate across the province. While each firm is critical to Ontario’s economic growth and job creation, a small number of leading-growth firms make a very large contribution to employment. Between 1997 and 2000, for example, 2.7 per cent of Ontario’s small and medium-sized enterprises created 60 per cent of all new jobs in the province.
Small businesses run the entire gamut of the business spectrum from retail to manufacturing, from the service industry to the IT sector, as entrepreneurs find unique niches in the marketplace. Entrepreneurs also come to small business in different ways. Statistics show that more than 50 per cent of Ontario’s small business owners start their firms from scratch, about 25 per cent start with the purchase of an existing business, 20 per cent start with the takeover of a family business, and another five per cent are spin-offs.
Financing options also vary with most SMEs using a combination of resources. About 75 per cent of SMEs use a line of credit to finance their operations. More than one-third have a term loan. About 25 per cent use mortgages, personal loans and credit. Loans from family or friends remain the financing method of choice for about one in 10 small businesses.
Starting your own business requires a leap of faith. But the many positive attributes—including independence and the ability to balance work and family—are attractive, and many Ontarians appear eager to take the plunge. A recent survey by the Canadian Federation of Independent Business cites entrepreneurship, at 43 per cent, as the leading choice of Ontarians as the most rewarding career path.