Small biz not accessing funding to support growth: BMO report

Small business owners are not taking advantage of available resources to help their businesses innovate and grow. In fact, 61% have not pursued government grants to support innovation, finds a BMO Wealth Management report.

Reasons for not applying include:

• not wanting to incur any debt (33%);
• believing that the process of acquiring funding was too complicated (25%); and
• fear of being declined (22%).

Additionally, 64% are not aware of the network of accelerators, incubators and hubs available to help them innovate. This response was cited significantly more by women (74%) than men (55%).

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Why innovation is important

The report also examined why small business owners implement innovation in their businesses. Meeting client needs was cited as most important (70%), followed by creating a better product or service (66%) and maintaining growth and stability of the business (61%). The responses from women and older business owners were more client centric, while men and younger business owners had a higher focus on creating better products or services.

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The report offered innovation tips for small business owners:

• Join a support network of business owners with different opinions and backgrounds
• Consider a balanced approach in a personal wealth plan that includes investing personal and retirement funds in other industries and regions to reduce risk

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• Only a small percentage of businesses are sold when a business owner chooses to retire, so consider investing a small amount each month through a monthly purchase plan, which will allow for automatic and consistent contributions throughout the year to help fund long-term goals such as retirement.
• Insure yourself against unforeseen events, such as illness, to keep the business running and pay staff until the business owner recovers.

About the report: An online sample of 1,005 Canadian small business owners were surveyed between Nov. 29 and Dec. 2, 2017 with. The overall probability results for a sample of this size would be accurate to within +/- 3.01% at the 95% confidence level.

Download the full report here.