CanadianSME Small Business Magazine recently spoke with Don Ludlow, Vice President of Small Business, Strategy & Partnerships at RBC, about the evolving entrepreneurial landscape amidst economic challenges. Despite these hurdles, RBC’s survey highlights a persistent Canadian spirit of entrepreneurship, with a notable surge in Quebec and among younger generations like Gen Z and Millennials. Amidst advice on navigating financial challenges, Don emphasizes the importance of thorough planning, leveraging digital tools, and seeking expert advice, recommending entrepreneurs to explore RBC’s Starting a Business online hub for resources.
Don is the Vice President Small Business, Business Financial Services Strategy and Partnerships at RBC. He is responsible for leading RBC’s Small Business segment and teams. In his role, Don provides strategic oversight in delivering market-leading client experiences through innovative partnerships and differentiated, beyond-banking solutions to help aspiring entrepreneurs and Canadian business owners start, manage and grow their ventures.
Small businesses have navigated more than three years of economic volatility – but even for the most agile and resilient, the current macro environment is particularly challenging. How do you see the sentiment towards entrepreneurship changing or adapting in response to these challenges?
Our recent RBC Small Business survey revealed that despite the many hardships that small business owners have faced over the past few years, Canadians continue to be encouraged by entrepreneurship as being a viable path to financial security and professional fulfillment.
Two in three business owners and aspiring entrepreneurs say they’ve peaked in their career, and business ownership was or is their next step to thrive professionally, while 88 percent believe that due to the rising cost of living, a secondary income is critical for achieving financial freedom and security. Furthermore, 94 per cent of respondents say ‘being one’s own boss’ is the main incentive for starting a business, while 78 per cent feel entrepreneurship is a suitable alternative to traditional nine-to-five desk jobs.
This shows that the drive towards securing one’s future is propelling entrepreneurial aspirations and people are looking to take more control over their lives and careers as the economic environment continues to evolve. Furthermore, the availability of new tools and technologies to support business ownership – either full-time or as a side hustle, is significantly lowering barriers to entry, making entrepreneurship more accessible and effective in generating additional income – which can be a stabilizing force in the face of a slowing economy and a way to prepare for retirement.
Can you share any region-specific or demographic trends in the survey responses that piqued your interest?
The survey revealed a high drive for business ownership in Quebec – significantly above the national average. This points to a thriving entrepreneurial and innovation ecosystem in the region where 94% Québécois reported that they are increasingly looking to convert passion projects into side hustles; 59% say they are continuing or considering entering family businesses and 80% believe entrepreneurship is the logical next step to thrive in their career. Quebec is a world leader in several cutting-edge sectors – from agriculture, mining, and forestry to IT and aerospace and has a diverse and multicultural population with a strong and highly skilled workforce that significantly contributes to its development – especially for entrepreneurship. We believe this diversity creates opportunities across various sectors and makes the region highly attractive for business owners.
It was also interesting to see that the desire for entrepreneurship continues to trend high among Gen Z and Millennials. For most of them, entrepreneurship isn’t just a curious side hobby, it signifies a forward-thinking approach to securing one’s financial future while advancing professionally. Among Canadians, aged 18-34, 84 per cent believe that entrepreneurship is a suitable alternative to a traditional 9 to 5 desk job; 67 per cent have aspirations to scale their small business into a large enterprises and 39 per cent believe that starting a business mid-career is ideal for transitioning from a conventional job. This sentiment shows that younger Canadians are increasingly contributing to a more dynamic and diverse entrepreneurial ecosystem in Canada with their creativity, innovation and willingness to challenge traditional norms.
It can be difficult to know when the time is right to start a business. Did the survey uncover any key indicators on the best time to consider entrepreneurship and what advice do you have to anyone looking to start a business or a side hustle?
While the answer to this question really depends on an individual’s own circumstances and needs, nearly one-third or 31 percent of the business owners who responded to our poll agreed that ‘mid-career’ was a good time to start. This phase of life often brings with it some wisdom on managing and navigating a business along with the passion and time to building something new and meaningful.
My advice for aspiring business owners would be: don’t do it alone. The most important resources are often the people around you – your accountant, lawyer, mentor, or other trusted members of your professional network who can all be valuable for honest feedback, advice, and support. Don’t hesitate to reach out! At RBC, our advisors are always happy to help you manage and grow your business, offer solutions to simplify your day-to-day processes and connect you with other professionals to help you achieve your business goals. Entrepreneurs can access solutions and business advice online through the RBC Starting a Small Business Hub at www.rbc.com/startingabusiness.
Furthermore, I would encourage anyone looking to be an entrepreneur to start with a strong and sound business plan and a good understanding of anticipated cash flow scenarios as early as possible. Start planning, even if it’s just a part-time side hustle today. This will make it a lot easier for you to have exploratory and more advanced planning conversations down the road with your bank, suppliers, other business partners, and even prospective customers. Having a plan will give you more control in guiding conversations, improving your credibility as an owner, and instilling confidence in your business. Business owners can use the RBC Business Plan Builder to get started with building a framework for success.
Finally, follow a steady approach to creating a digitally-enabled business model that can be sustained over the long term. Think about digitizing your supply chain, leveraging data to support decision-making, and streamlining accounting processes using software such as RBC’s PayEdge to keep track of cash flow, forecasting, and automating bill payments.
Faced with rising costs and interest rates, many small businesses may be facing a cash crunch or contending with tighter finances. What advice do you have for them?
For those looking to more closely manage their business’s financial health, consider the following three tips:
Regularly monitor and forecast your cash flow
- Now, more than ever, you need to be reviewing your cash flow frequently. It’s a good idea to implement a cash flow forecasting process on a 13-week cycle to help drive your short-term decisions as they relate to payables, receivables, and inventory.
- To help you monitor your cash flow, RBC offers tools like NOMI for Business, which offers a snapshot of the money going in and out of your accounts, as well as the RBC Business Cash Flow tool which small business owners can use to get an analysis of their current cash flow position.
Digitize your payments to help get funds into your business faster
- Credit and debit card payments, Interac e-transfers, and mobile payment options enable you to speed up payments and these digital options can also minimize fraud and make reconciling your accounts faster and easier.
- Consider solutions such as RBC’s PayEdge which facilitates funding from multiple sources and provides access to all payment types in a single solution.
- Integrate a range of e-commerce services and payment solutions with Moneris to power your business with customized solutions that meet your unique needs.
Explore avenues for financial support
- Futurpreneur provides financing, mentoring and support tools to aspiring business owners age 18-39 to help them manage and grow their business.
- Government grants and incentives may be available to support your business’ projects and plans and GrantMatch can help you identify and apply for relevant grants.
- If your business is looking to setup e-commerce, increase online sales, reduce costs or better manage inventory the Canadian Digital Adoption Program could help with funding.
I encourage business owners to speak with their business advisor to work on tailored solutions that meet their unique circumstances.
Entrepreneurs can also access many of our tools, resources and business advice at RBC’s Starting a Business hub online.
