The BMO Entrepreneur Report: Canadian Business Owners Spent an Average of $165,065 to Start Their Business
OREANDA-NEWS. A new poll released today by BMO Bank of Montreal found that microbusinesses - those with 10 employees or fewer - spent an average of \\$120,000 to get started, while business owners with 11-49 employees needed an average of \\$345,000.
The poll, conducted by Pollara revealed that:
- Half (51 per cent) of business owners with fewer than 10 employees were able to start their business with \\$100,000 or under, and one in ten needed only \\$2,500 or under.
- By comparison, only one fifth (22 per cent) of business owners with 11-49 employees got their business off the ground with \\$100,000 or under.
In addition, the poll found that majority (80 per cent) of business owners said that one of the biggest challenges when starting their business was earning enough money to support both their business and family until business was profitable.
"Statistics show that insufficient capital is one of the main reasons small businesses struggle to get started and achieve success," said John MacAulay, Head, Canadian Commercial Banking, BMO Bank of Montreal. "It is critical that these establishments - which are vital components of our economy - are receiving the advice and resources they need to make the right decisions when starting and maintaining their businesses."
Mr. MacAulay noted that in 2012, BMO made \\$10 billion available to businesses across Canada, an initiative set to run until the end of 2015. "BMO is committed to providing Canadian business owners - no matter their size or how long they've been in business - the right tools and support to help them achieve long term growth and success," he added.
Three Quarters of Canadian Business Owners are Currently Turning a Profit
According to data collected by Industry Canada, only half (51 per cent) of businesses survive their first five years. Just over half (53 per cent) of business owners said their financial resources have grown since inception; the percentage of those in business 3-5 years was slightly higher (58 per cent) versus businesses under two years old (46 per cent).
|How long does it take business owners to turn a profit?|
|Total business owners||Those in business 2 years or less||Those in business 3-5 years|
|Under a year||54||%||63||%||49||%|
|More than 5 years||1||%||1||%||--|
Furthermore, two thirds of business owners said they are very confident in their ability to manage finances and expenses. And while almost all (94 per cent) of business owners said they check their cash flow balances monthly or more frequently, more than one third (38 per cent) of survey respondents reported they commonly experience cash-flow problems.
"Maintaining healthy cash flow is critical to business sustainability and growth," said Mike McDerment, co-founder and CEO of FreshBooks. "Too many small business owners track their performance using Word and Excel, putting them at risk of making errors through manual data entry. Thankfully, there is new technology designed specifically for small business owners to help them simplify business management so they can focus on growing their business and doing the work they love."
In June 2015, BMO announced a partnership with FreshBooks, the #1 cloud-based accounting software designed exclusively for service-based small business owners. This collaboration enables BMO customers to link their accounts to and access FreshBooks' software to easily conduct their day-to-day operations and streamline their business process.About BMO Financial Group
Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of approximately \\$672 billion as of July 31, 2015, and more than 47,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.