Canadian entrepreneurs are overlooking valuable support resources for growth and enhancement
Innovation is a key ingredient in any entrepreneurial venture. But according to a new report from BMO Wealth Management, Canadian business owners are not taking full advantage of all the financing and support networks for innovation that are available to them.
According to the report titled Innovation: Creating wealth through business improvements, the top three reasons for implementing innovation among business owners are meeting client needs (70%), creating better a product or service (66%), and maintaining the growth and sustainability of the business (61%).
“One of the reasons why about half of such businesses fail in their first five years may be that Canadian businesses generally underperform in the area of innovation,” BMO said. “Business owners over 55 … are much more focused on customer demands (74%) than on creating better products or services (54%).”
Business owners may be falling short on innovation because they’re not maximizing the opportunities available to them. BMO found that 61% of small-business owners in Canada have never applied for funding to support innovation, compared to 6% who have. Among those surveyed, 33% said they didn’t want to incur debt, 25% believed the process is too complicated, and 22% expressed fear of being turned down.
As for other support opportunities, 42% of business owners surveyed said they had some knowledge of government grants but weren’t sure how to apply, while 32% were not even aware that grants were available. And outside of technology companies, 64% of Canadian entrepreneurs are not aware of accelerators, incubators, and hub networks that support innovation.
"Small business owners should seek out and take advantage of the resources available to help drive their businesses forward profitably," said Chris Buttigieg, Director of the Wealth Institute at BMO Wealth Management. "Innovation and profitable business changes don't necessarily require a significant financial investment, and simple, low-tech innovations can help keep things fresh for customers, employees and the business."
Innovation may also help to ensure a major piece of many entrepreneurs’ retirement plans: the sale of a business, which is successful in only a small percentage of cases. But the BMO report noted that owners may want to consider investing personal and retirement funds in other industries or regions outside their own business areas, as well as put money away for the future every year.
“These funds should be invested in a diversified way to fund long-term goals such as retirement,” BMO said. “Professional advice is key when making investment, diversification, retirement and wealth planning decisions.”
