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Key Small Business Statistics - April 2004
How many small business entrepreneurs are women?
There is no easy way to precisely determine the number of entrepreneurs in Canada, much less the number of women entrepreneurs. However, it is possible to estimate the number using available data on self-employment and business ownership.
Statistics Canada's Labour Force Survey reports there were 826 000 self-employed women in Canada in 2003, accounting for about one third of all self-employed persons. (While not all of the self-employed would identify themselves as entrepreneurs, the number of self-employed women provides an upper limit for the number of female entrepreneurs.7) Over the past 10 years, the number of self-employed women has grown by 26%, compared with 16% growth in male self-employment.
Another way to count entrepreneurs is through business ownership. The report entitled Small and Medium-sized Enterprise (SME) Financing in Canada8 distinguishes four types of business ownership based on gender: majority female ownership, equal partnership between male and female owners, minority female ownership and no female ownership.
Based on this report, it is estimated that 45% of SMEs or about 647 000 businesses had at least some degree of female ownership in 2000. Of those, some 211 000 were majority owned by women, while 272 000 were owned by an equal partnership between male and female owners.
The report found that SMEs majority owned by women were less likely than other SMEs to employ more than 20 employees and also had started up more recently than firms that are majority owned by men. A large number of SMEs owned by women operated in the wholesale, retail and professional services industries. Women owners of SMEs also tended to have fewer years of experience in the industries in which they operated compared with their male counterparts.
Are women who are majority owners in a business refused bank credit more often than men?
The report, Small and Medium-sized Enterprise (SME) Financing in Canada (2002),9 suggests that women entrepreneurs do not face greater difficulty than men in obtaining bank credit. In the case of SMEs that are majority owned by women, 17% requested debt financing and 82% of requests were approved, while for SMEs majority owned by men, 23% requested debt financing with an 80% rate of approval.
That said, certain characteristics of SMEs majority owned by women appear to make them less likely to request debt financing. Whether businesses apply for financing or not varies greatly across industries and size of the business.
As already noted (see How many small business entrepreneurs are women?), SMEs majority owned by women tend to be smaller and younger relative to SMEsowned by men. In addition, SMEs owned by women are more likely to operate in the wholesale, retail and professional services industries.
Report results showed that SMEs with fewer than five employees had the lowest rate of requests for debt financing and approval rates. SMEs that operated in the wholesale, retail and professional services industries also had lower-than-average rates of requests for debt and lease financing.
In the course of the survey that led to the report, women owners of SMEs who required financing but did not often apply cited difficulties in the application process and the likelihood of their requests not being approved as reasons for not applying. In contrast to these perceptions, the survey found that women owners of SMEs who did apply for debt financing were not required to provide any more documentation to suppliers of credit than were owners of SMEs in general.
The report's results support the conclusion that it is not the gender of a business owner, but rather the sector in which a business operates and its size and age that determine access to financing.
7. Some entrepreneurs, especially if they are on the payroll of their own businesses, may not identify themselves as being self-employed; however, this number is likely to be smaller than the number of self-employed who are not entrepreneurs.
8. Government of Canada, Small and Medium-sized Enterprise (SME) Financing in Canada, 2002, available at http://www.sme-fdi.gc.ca. The report is based in part on Statistics Canada's Survey on Financing of Small and Medium Enterprises, 2000.
9. Government of Canada, Small and Medium-sized Enterprise (SME) Financing in Canada, 2002, available at http://www.sme-fdi.gc.ca. The report is based in part on Statistics Canada's Survey on Financing of Small and Medium Enterprises, 2000.
