Canadian businesses are facing a historical turning point. Over the next 10 years, more than three-quarters of companies will undergo ownership changes. With the average age of entrepreneurs nearing 60, it simply comes down to demographics. As Canadians, we need to find a way for these businesses to transition to new ownership.
Canada is also welcoming a historic number of newcomers to the country with over 1.3 million immigrants having moved to Canada in 2021, the largest proportion recorded in a Canadian census.
These two trends offer an opportunity to unleash a new wave of investment and growth for our country.
Entrepreneurs: A Central Part of Our Economy
There are over one million small and medium-sized businesses in Canada; these represent 99.8% of the country’s businesses. They produce 43% of the total value of Canadian exports, employ 88.3% of the country’s private-sector workforce, and account for about 50% of Canada’s GDP. There’s no doubt that Canadian entrepreneurs play a vital role in our country’s economy.
“Through the growth of immigration, Canada now has access to a group of entrepreneurial newcomers with in-depth knowledge, education, and ambition.”
The Potential of Immigrant Entrepreneurs
Immigration now makes up for 96% of all population growth, and this trend is expected to continue. Through the growth of immigration, Canada now has access to a group of entrepreneurial newcomers with in-depth knowledge, education, and ambition.
They’re already making an impact on the Canadian economy. In fact, immigrants represent 33% of all business owners today. Additionally, the number of newcomer entrepreneurs increased by 22% from 2006 to 2018.
The challenge for Canada is how to connect immigrant entrepreneurs with the businesses whose owners are looking to sell.
How Can We Support Immigrant Entrepreneurs With Potential Business Transitions?
It’s essential to ensure a smooth transition between our entrepreneurs looking to retire and new business owners, including immigrants. So, how can we support newcomers with a desire to acquire businesses? Here are three key steps that I believe are necessary to make this happen.
1. Access to financing
When newcomers arrive in Canada, they often arrive with little to no credit or banking history. This leads to newcomers being unable to access the proper financing to acquire or start businesses. This applies both to equity and other sources of financing.
“When newcomers arrive in Canada, they often arrive with little to no credit or banking history. This leads to newcomers being unable to access the proper financing to acquire or start businesses.”
There are organizations and crown corporations across the country looking to help provide newcomers with financing options to promote entrepreneurship. These organizations offer credit assessments that review newcomers’ business experience before they arrive in Canada. Having these assessments then allows them more opportunities to demonstrate their stable financial history and acquire financing. It is vital to support these initiatives to foster the next generation of entrepreneurs. Federal and provincial financial crown corporations can also play an important role – BDC and Investissement Quebec, for example, are already active.
2. Access to specific Canadian financial knowledge
Navigating a foreign financial structure is a challenging aspect of immigrating to a new country and requires newcomers to be educated about Canada’s economic landscape.
“Providing networking opportunities designed for immigrant entrepreneurs so they can get accounting and legal support and procurement opportunities is vital.”
These entrepreneurial newcomers have financial literacy in abundance but need to understand the Canadian system. What they need now are connections, local knowledge, and mentorship. Providing networking opportunities designed for immigrant entrepreneurs so they can get accounting and legal support and procurement opportunities is vital to their future success.
3. Access to diverse support that reflects the immigrant journey
Connecting new immigrants with established professionals who share a common immigration journey, history, culture, and language can ensure a smoother transition for immigrant entrepreneurs settling in Canada. By sharing a level of commonality with such experts, they can relate and get a real-world example of what the end journey of their immigration to Canada could look like.
Given the circumstances, these steps would allow us to take an active role in an immigrant’s transition from newcomer to established entrepreneur.
Creating More Support for Canada’s Immigrant Entrepreneurs
Business transitions – ensuring the transfer of ownership of Canadian SMEs as the current generation of entrepreneurs retire – are of critical importance to our economy. As Canadians, we should aim to tap into the entrepreneurial talent that is arriving in our country. Imagine what would happen if we were able to help facilitate the process for newcomers to acquire and start businesses. I look forward to the wave of growth, investments, and job opportunities this could unleash.