Nearly One Million Canadians Want To Open Businesses Within The Next Year

Toronto, ON- According to a recent study conducted by Ipsos-Reid on behalf of the RBC Financial Group, approximately 950,000 Canadians hope to start their own businesses sometime in the next 12 months.

Of the estimated 3.2 million aspiring entrepreneurs in Canada, 29% would like to start their own business in the next year. The long-term benefits aspiring entrepreneurs hope to achieve include: work for yourself (81%); income (68%), specifically extra/supplementary income (51%) and/or becoming wealthy (30%); interested in the work (66%); flexible work hours/easier to manage family commitments (56%); work fewer hours (23%); and take more vacation (22%).

When compared to the main benefits of owning a business reported by current entrepreneurs, some inconsistencies are found. The main difference observed was in regards to income, as only 42% of entrepreneurs mentioned income vs. 68% of aspiring entrepreneurs.

Over half (58%) of aspiring entrepreneurs expect their business will start earning revenue less than a year from when they first start planning it. 42% of aspiring entrepreneurs expect their total household income will increase within the first year of starting their business, while only 34% of entrepreneurs report they experienced an increase in this time period. Similarly, 62% of aspiring entrepreneurs would like their business to account for at least half of their household income, while only 38% of entrepreneurs report this to be the true of their business.

For marketing their businesses, the majority of both aspiring entrepreneurs (80%) and existing entrepreneurs (84%) plan on using `word of mouth'. However, many aspiring entrepreneurs plan on using mediums rarely used by current entrepreneurs, including: web sites (57% aspiring vs. 25% entrepreneurs); paid advertising in magazines and newspapers (49% vs. 25%); direct mail/flyers (42% vs. 18%); internet advertising/pop-ups (22% vs. 9%); and storefront/retail location (21% vs. 9%).

Aspiring entrepreneurs were asked which main challenges they anticipate facing when starting their business. Similarly, current entrepreneurs were asked what main challenges they faced when starting their business. A comparative analysis of their responses suggests aspiring entrepreneurs are more concerned with challenges that entrepreneurs did not frequently encounter, including: getting enough money to start the business (58% aspiring vs. 27% entrepreneurs); tax laws (31% vs. 17%); dealing with government/regulations (35% vs. 26%); dealing with banks (28% vs. 19%); succession planning (27% vs. 5%); and sourcing materials/products (25% vs. 15%).

Demographically, approximately three out of four (72%) aspiring entrepreneurs are currently employed, and 41% have previously been self-employed or owned their own business. 42% usually take three or more weeks of vacation per year, while 30% report taking less than two weeks. 71% plan on initially running their business out of a home office. Fewer than three-in-ten (29%) plan on hiring employees in the first year.

The average age of aspiring entrepreneurs in the sample was 43 years. 36% obtained a degree from a four-year college or completed post-graduate studies. 56% of aspiring entrepreneurs were males.

These are the findings of an Ipsos Reid/RBC Financial Group poll conducted from August 12th to August 16th, 2005. For the survey, a representative randomly selected sample of 1,661 aspiring entrepreneurs and 2,380 current entrepreneurs was interviewed online. With a sample of this size, the results for entrepreneurs are considered accurate to within 1772.0 percentage points while results for aspiring entrepreneurs are considered accurate to within 1772.4 percentage points , 19 times out of 20, of what they would have been had the entire adult Canadian population been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population. For the purpose of this study, "entrepreneurs" are defined as those reporting they either currently own a business or are self-employed, and "aspiring entrepreneurs" are defined as those reporting they do not currently own a business/are not self-employed, and are either "very" or "somewhat" likely to start their own business in the next five years.

Please open the attached PDFs to view the factum and detailed tables.

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For more information on this news release, please contact:

Ray Kong
Ipsos-Reid
(416) 324-2106