By Nishant Raina, Small Business Lead, Mastercard Canada
Small businesses have always been at the heart of Canada’s economy. There are more than a million of them across the country, with over 100,000 new ones created every year. Many started out as bricks-and-mortar businesses that expanded into digital commerce. Now, thanks to online content sharing platforms, the next wave of digital entrepreneurship – the creator class – has emerged. While it’s already a significant economic and business force, this new small business segment is growing fast.
The creator class is more than just people with a YouTube channel or influencers who post on TikTok or Instagram. It includes anyone with a desire to turn their passion and skills into profitable business streams by using social media platforms to reach niche sets of consumers, whatever their interests and wherever they are in the world.
It’s estimated the creator class already generates more than $100 billion in economic activity in North America, with more than 22 million people identifying as creators. Mastercard research shows that close to one-third of creators can already be considered “microbusinesses,” with annual earnings of more than $50,000, while six per cent of creators are already generating more than $250,000 a year.
More than three-quarters of Canadians – 78 per cent – are looking to enter into a creator-based business or side hustle and 38 per cent of them have already made the leap. Younger Canadians are particularly keen. Our research shows that two-thirds of creators in North America are under the age of 40. Nearly three out of every four Gen-Zers and 73 per cent of millennials in North America would rather be a creator, entrepreneur or small business owner than work at a traditional corporate job. Of those who have become creators, one in five already consider it their full-time job and more than half are thinking about quitting their day jobs to become a full-time creator.
Two key factors are driving this paradigm shift. First, a growing number of people want to be able to do work they are passionate about. Second, they want to opt out of the traditional corporate or business structure. The COVID-19 pandemic accelerated this shift by causing more business to be conducted digitally and by giving people time to pause and re-evaluate their priorities.
If you’re not a creator or an aspiring creator, you might think all it takes is a smartphone and an Internet connection. That’s certainly how many creators get started, but there’s a lot more to it than that to turn a passion into a business, which is the goal of nearly two-thirds of creators.
Creators share many of the entrepreneurial aspirations of other small business owners and have similar needs for support with such things as content visibility, finances, tools, security protection and education to help them grow their future. But they also face special – and mounting – pressures that call for a new set of supports.
Many creators are “solo-preneurs” who struggle to balance the need to be constantly creating new content with the many other commitments of running a small business and the need to manage multiple platforms to bring their content to life. Our research found that creators in North America are already using an average of nine separate platforms a week, including websites to host content, digital payment tools to accept payments, and creative tools and design programs. Most creators expect even more platforms will be developed over the next three years to help them monetize their passions.
It’s no surprise, therefore, that nearly nine in 10 creators told us they are experiencing burnout. More than 80 per cent said they face financial challenges such as rising costs and inconsistent revenue streams, managing financial operations, and inadequate funding.
We believe big brands have an opportunity to help creators grow their businesses, something the vast majority of creators say they would welcome. One way to do this is by building and cultivating spaces for creators to collaborate with a brand and where the brand can provide support as part of the value exchange. Another way is by investing in creators’ businesses, both financially and with educational support, especially on how to scale and monetize their businesses.
At Mastercard, we’ve been a strong supporter of small businesses for decades. Our needs-based approach – listening to creators and learning from them – allows us to build products, services and solutions to help them succeed.
But we’re not doing this alone. We also work closely with other partners, such as Digital Main Street, to help the creator class by building an “ecosystem of support.”
If we all come together to provide the necessary tools and resources for this next wave of small business, the possibilities are endless.
Just like the imagination and passion of the creators.
