FERENCE WEICKER & COMPANY Impact Assessment of the … · WEI organizations from 2003 to 2008;...

Impact Assessment of the Women Enterprise Initiative (WEI)

Prepared for: Western Economic Diversification Canada October 6, 2008 Prepared by: Ference Weicker & Company Ltd. 550-475 West Georgia Street Vancouver, BC V6B 4M9 Tel: 604-688-2424

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Impact Assessment of the Women Enterprise Initiative Page i

EXECUTIVE SUMMARY

Executive summary The Women’s Enterprise Initiative The Women's Enterprise Initiative (WEI) was established by Western Economic Diversification Canada (WD) in 1994 to encourage the establishment and growth of women-owned and controlled businesses, encourage self-employment and business development, and promote economic equality between men and women. This mandate is supported through:

Introducing and promoting the concept of entrepreneurship to women; Increasing the availability of capital to women-owned enterprises; and Providing services to help women develop experience, expertise, assets and credit track records,

enabling them to increase both the number and strength of women-owned businesses in Western Canada.

WEI is implemented by a not-for-profit organization in each province served by WD, including:

The Women’s Enterprise Centre (WEC-BC), which operates in BC; Alberta Women Entrepreneurs (AWE – the legal name is Alberta Women Entrepreneurs

Association); Women’s Entrepreneurs of Saskatchewan Inc. (WESK); and The Manitoba Women’s Enterprise Centre (MWEC).

Each WEI organization is an independent entity which is named and organized uniquely to reflect the differing needs and client base in each province.

Purpose of the Project The purpose of this project is to conduct an impact assessment of the WD-funded activities of the four WEI organizations covering the five-year period from April 1, 2003 through March 31, 2008. The assessment focuses on both outputs and outcomes:

Key outputs include loans, advisory services, training and information services.

Key outcomes and related performance indicators include the number of businesses created, maintained and expanded, number of jobs created and maintained, increased revenues, leveraged financing, and client satisfaction.

Method of Study We conducted this study in two phases. The primary objective of the first phase was to prepare a detailed work plan that was then implemented in the second phase of the study. In preparing the work plan, we conducted an initial meeting with the Advisory Committee established for the project; compiled available information regarding the funding provided by WD, the services delivered, and the results reported by the WEI organizations from 2003 to 2008; developed a profile of WEI including a program "logic" model; defined the research questions, indicators and data sources; and developed the questionnaires for the impact assessment. We then met with the Advisory Committee to obtain approval of the detailed work plan prior to proceeding with the field research.


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EXECUTIVE SUMMARY

The major component of the field research involved a survey of a sample of 444 WEI clients drawn from across the four provinces. At a confidence level of 95%, a sample of 444 WEI clients achieves a margin of error of about ± 4.6%. Of the 444 clients who participated in the review, 175 were loan clients. These loan clients accounted for 36% of the number of loans and 38% of the value of loans approved over the past 5 years. Other components of the field research included a focus group with clients in each province and interviews with 31 WEI and WD staff, 25 Board Members (current and past), and 30 other stakeholders who work with the target group.

Major Findings and Conclusions The major findings and conclusions arising from our review are as follows: 1. The WEI organizations provide a range of services to women entrepreneurs in Western

Canada.

The key services that are delivered by the WEI organizations include: Capital loans to assist existing businesses and help entrepreneurs create new businesses. WEI

organizations can make loans of up to $100,000 to new or existing businesses. Over the past 5 years, the four organizations have issued 572 loans totalling approximately $22.9 million.

Business advisory services such as assistance with business planning, one-on-one counselling

and business orientation. Over the past 5 years, almost 28,000 business advisory services have been delivered.

Training and skills development through seminars and workshops covering topics such as

marketing, business start up and planning, and financial management. Over the past 5 years, WEI organizations have delivered over 1,700 sessions targeted at over 21,000 clients.

Information services provided as a result of telephone enquiries, walk-ins, consultations, and

information sessions. 2. Clients are generally very satisfied with the services that they receive.

Most clients (60%) reported receiving more than one type of service. Of the clients whom we surveyed, 58% have participated in a training session or seminar, 48% have received one-on-one business counselling, and 42% indicated that they have received a loan under the program. When asked to rate their satisfaction with the assistance received from WEI on a scale of 1 to 5, where 1 is not at all satisfied, 3 is somewhat satisfied and 5 is very satisfied, clients provided an average rating of 4.1. While 75% of the respondents indicated that they are satisfied or very satisfied with the assistance received (a rating of 4 or 5), only 5% indicated that they are not at all satisfied (a rating of 1). The loans, particularly when combined with business advising, are considered the most significant service received by clients. Most loan clients reported also receiving business counselling and, more specifically, reported receiving assistance in the development of a business plan. Clients praised the knowledgeable, friendly staff who not only offered guidance and helpful advice but also provided significant moral support and encouragement. The business planning sessions and training programs offered by the organization were considered well-organized, educational, specifically relevant to women, and affordable.


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EXECUTIVE SUMMARY

Clients who were not satisfied with the assistance they received commented on a lack of follow-up or follow-on services; concerns about staff turnover and/or the capabilities of the staff; and a poor fit between their needs and the focus of the training sessions or seminars (e.g., not tailored to the characteristics of their business or their stage of development).

3. Most of the clients are women between the ages of 35 and 54, well educated, and (at the time

of the interview) currently operating a business.

Of the 444 clients who were surveyed, 309 (70%) are currently operating a business. Most of these businesses are in the service or retail sector, have operated for 4 years or less, employ four or fewer people, and generate revenues of $250,000 or less annually. Most clients have fewer than 5 years of management experience which, in most situations, is directly linked to the operation of their current business.

On average, the businesses which received loans under WEI generate $475,000 in revenues and employ 5.8 people. Businesses which did not receive loan funding currently have revenues averaging $272,000 and employ 2.8 people.

4. The services have had a range of impacts on the clients.

Clients reported that the services have:

Helped them to further develop their business, management and/or personal skills (39% reported a significant impact). Clients reported further developing skills related to business planning, marketing, financial management, business management, and general business knowledge through participating in training programs and seminars, networking with others, and reviewing information and resources the organization has gathered and made available online or through its offices.

Increased their access to other programs and services (38%). The clients reported that the

referrals from staff as well as the information and resources available through the offices, WEI websites, and newsletters have increased their access to information about other programs and services related to networking and mentoring, training, professional development, business development, financial management, marketing, and business planning. The WEI organizations commonly serve as a “front door” through which clients are able to identify and access other programs and services.

Enabled them to network with other entrepreneurs (37%). The WEI organizations facilitate

networking by staging events and seminars as well as informing clients of events, seminars, and workshops (not necessarily staged by the WEI organization) via e-mails, newsletters, phone calls and postings. Clients reported being motivated and inspired by other women entrepreneurs met at networking events. These events and seminars also allowed women to exchange information and build business relations with each other.

Increased their access to information for decision making (35%). Encouraged them to start and/or further develop their own business (34%). Many of the

women said that they had already made the decision to start a business prior to approaching WEI but noted that advisors played a very important role in encouraging them to continue progressing towards that objective. More specifically, clients recognized the motivational and emotional support provided by the WEI staff as well as their technical assistance in areas such


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EXECUTIVE SUMMARY

as business planning and counselling. Staff members were described as positive, supportive, motivational, and professional in their advising and counselling services. The financial assistance and advice, the available information resources and training, the networking opportunities, and help regarding various business issues were also identified by clients as encouraging factors.

Increased access to financing or capital from sources other than WEI (14%). Some clients

indicated that the advisors played an important role in helping them prepare their business plan, which they then took elsewhere, and/or in providing referrals to other sources of capital such as the Business Development Bank of Canada, the Canadian Youth Business Foundation, commercial banks and credit unions, Community Futures, Aboriginal Business Canada, and other local, provincial and federal sources of assistance.

5. The services, particularly the loans, have generated significant economic impacts in terms of

business development.

The loans and assistance provided by WEI to loan clients help businesses become more established and grow. Assessing the impact of this assistance is complicated by the fact that the impacts are not limited to one year (the businesses may continue to grow and prosper well into the future) and most clients receive more than one service that impacts upon them (e.g. they may obtain one or more loans, receive business counselling and participate in training). To address these issues, the methodology focuses on the enterprise, rather than individual services, and then tracks the growth and survival rates of those enterprises going out five years from the time that the first significant assistance is provided. The five-year period was selected because our survey consisted of clients who have received assistance during the past five years. To the extent that the impacts of the assistance provided by WEIs continue to go forward beyond five years, this approach will under-estimate the ultimate cumulative impact of the assistance provided.

The results of the research indicate that:

The revenues of the WEI assisted businesses tend to grow each year that operations

continue. The revenues of the average business receiving loans increased from about $57,000 in the year prior to receiving the loan (most of the businesses are not yet in operation) to $163,000 in the first year to over $550,000 in the fifth year after receiving the loan. Over a five- year period, the average WEI client business which remained in business would generate about $1.9 million in additional revenues.

Business survival rates decline over time. Based on the survey results, loan write-off data

and other research, we estimate the business survival rates for loan clients decline from about 98% in Year One to 75% by Year Five (i.e. 75% of businesses are still operating after five years).

After adjusting for survival rates, we estimate that the average WEI business (including

those which are still operating and those which have ceased to operate) generates revenues of approximately $1.5 million over the five-year period.

The majority of impacts are incremental in that they would not have occurred in the

absence of the support provided by the program. When asked to rate the importance of the WEI services to the establishment and/or development of their business on a scale of 1 to 5, where 1 is not at all important and 5 is very important, loan clients gave an average response of 4.5. On average, these clients estimated that there is only a 34% chance they would have


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EXECUTIVE SUMMARY

been able to develop their business to the extent they have without the assistance of the WEI. Overall, the WEI clients attribute 55% of their current business revenues to the services provided by the WEI.

By extrapolating this analysis to the entire population of WEI loan clients, we estimate that (going out over a five-year period from when assistance is initially provided) the $22.9 million in loan funding issued over the past five years has generated about $660 million in incremental revenues and 8,000 incremental person years of employment. Of this amount, $363 million in revenues and 4,430 person years of employment is attributed by clients to the services provided.

The following table summarizes the estimates on a per business basis and extrapolated to the total

population of loan clients based on the value of loans issued over the past five years.

Estimate of the aggregate economic impacts of the services provided to WEI loan clients

Indicator Per Loan Client Total Population of Loan Clients

Loans

Value of Loans Received $51,693 $22.9 million

Business Activity Over A five-year period

Incremental Revenues Over 5 Years $1.5 million $660 million

Export Revenues $74,000 $33 million

Employment 18.1 person years 8,000 person years

Wages $341,000 $151 million

Investment $171,000 $76 million

Impacts Are Attributed to the Services of WEI

Total Revenues Over Five Years $818,000 $363 million





Over time, the loan clients have invested about $2.35 in their businesses for every dollar in loan funding received. The loan clients estimated that 36% of their investment is incremental in that it would not have been made in the absence of the services received from the WEI organizations.

6. Although difficult to quantify, the non-loan services have also generated significant impacts.

As part of the impact assessment, we also reviewed the impact of non-loan services with a particular focus on business advisory services and training. Because of the soft, incremental nature of many of the services, it is often difficult for clients to quantify the impact that an advisory service or participation in a training program has had on their business. It was not unusual for clients to indicate that they are very satisfied with the services that were provided to them, to feel that it has helped them in starting-up or operating their business by enhancing their confidence or skills as well as providing guidance and useful feedback, but not to be able to provide a reasonable estimate of the economic impact that it had.


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EXECUTIVE SUMMARY

That being said, there were examples where clients reported significant impacts. For example, there were several clients who participated in the survey and/or the focus groups who indicated that their business was very unlikely to have been established without the assistance of the business advisor and/or the training they received. In some cases, these businesses are now generating revenues of $400,000 or more annually.

We interviewed 181 clients who had received training but had not received a loan and 112 clients who had received business advisory services but had not received a loan (some clients fit into both categories). The results of the focus groups and interviews with these clients indicate that:

The services were provided to a mixture of clients who were in the process of starting a

business, were already operating a business or who have not started a business.

Clients are very satisfied with the training that they have received. When asked to rate their satisfaction with the assistance received from WEI on a scale of 1 to 5, where 1 is not at all satisfied, 3 is somewhat satisfied and 5 is very satisfied, the training clients provided an average rating of 4.0. Advisory clients (i.e. non-loan clients who received advisory services) provided an average satisfaction rating of 4.1.

Most training clients believe that the training and other non-loan services they received was

useful to them in the establishment or further development of their business but not critical. When asked to rate the importance on a scale of 1 to 5, where 1 is not at all important and 5 is very important, the average rating was 3.5 and 54% of the training indicated that it was fairly or very important (ratings 4 or 5). Similarly, advisory clients provided an average rating of 3.8 and 59% of the clients indicated that it was fairly or very important.

7. WEI is viewed as successful in achieving its key intended impacts.

When asked what they consider to be the most important indicators for measuring the success of the program, WEI staff, WD representatives, Board Members and other stakeholders identified measures such as the number and value of loans provided, number of clients served and services delivered; the success rate of the businesses assisted, performance of the loan portfolio (e.g., low default rates); the number of jobs created/maintained, the number of new start-up businesses assisted; and the level of client satisfaction.

When asked to rate how effective they believe the program is in terms of the indicators that they identified, on a scale of 1 to 5 where 1 is not at all effective, 3 is somewhat effective and 5 is very effective, the average rating ranged from 3.5 amongst other stakeholders (who tend to be least familiar with the program) to 4.0 amongst WEI and WD staff to 4.3 amongst Board Members. WEI was considered particularly successful in terms of increasing access to capital, assisting large numbers of clients, delivering a range of quality services, aiding in the start up and further development of businesses, improving the success rates of businesses, and raising awareness of the entrepreneurial option for women.

8. The strong capabilities of the staff, the support provided by the Board of Directors and other

volunteers, and strong linkages developed with other programs and services have been key to the success of the WEIs.

A variety of factors were identified through the interviews and focus groups as contributing to the success of the WEIs. These include:


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EXECUTIVE SUMMARY

The professionalism and performance of the staff and CEOs. When asked to identify what

they attribute the success of WEI, the majority of stakeholders, WEI and WD staff, and WEI Board Members identified staff including the CEOs who have strong managerial and leadership skills as well as the effective and proactive staff team who are highly motivated and committed to quality in service delivery. Similarly, in the focus groups, clients praised the commitment of staff to serving women entrepreneurs in the province and their willingness to work hard to ensure that women are in the best position possible to achieve success.

The support provided by a strong Board of Directors and extensive volunteer base. In

2007-08, there were 32 Board Members which is equal to an average of 8 per organization. Over 3,600 hours were contributed by 467 volunteers (including Board Members), equal to an average of about 900 hours per WEI per year. The Board Members bring valuable expertise and a strong commitment to supporting the development of women entrepreneurs. Many of the Board Members play an important role in developing linkages among the WEI, their region and other organizations.

Strong linkages that have been developed with other programs and services. In each

province, there is a wide variety of organizations involved in delivering programs, services, and resources which can be of assistance to entrepreneurs. The WEI organizations work hard to complement these resources by focusing on filling gaps, being active in the community, establishing a strong referral network, and partnering with other organizations wherever possible on specific services, events and activities. The four organizations reported working with 177 partners in 2007-08.

Awareness of its services among the target group. The WEI organizations have continued

to make progress over the past five years in terms of creating awareness of services and raising the visibility of the organization through promoting and upgrading their websites, developing extensive communication lists, attending or hosting events, advertising, and building a strong referral network. Indicators of rising awareness include increases in the number of website hits and telephone inquiries as well as the number of clients served and requests for speaking engagements.

Increasing ability to serve women entrepreneurs from across the province. The ability of

WEI to serve clients from across the respective provinces has improved significantly in recent years. Regional delivery of services is facilitated by delivering services by telephone and the Internet, collaborating with regional organizations, establishment of satellite offices, staff travel, videoconferencing, and staging seminars, workshops, and meetings in various regions.

9. There is a strong perceived need for the types of services supported by WEI.

When asked to rate the need for the program on a scale of 1 to 5, where 1 is no need at all, 3 is somewhat of a need, and 5 is a major need, WD and WEI staff provided an average rating of 4.8, WEI Board Members and clients provided an average rating of 4.7, and other stakeholders interviewed provided an average rating of 3.7. Some of the major factors identified by WD and WEI staff, Board Members and other stakeholders as contributing to the strong need for this type of program include:

Difficulties that women face in accessing capital. Factors such as the characteristics of the

businesses (e.g. in the service, retail and hospitality sectors), limited availability of collateral, and credit history can all constrain their access to capital.


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EXECUTIVE SUMMARY

The limited experience of many of those planning to start up a new business.

Rising demand, as reflected in the impressive growth in the number of women entrepreneurs in

Western Canada. 10. Budget limitations were identified as the primary factor constraining the impacts generated

by the program.

As such, the most common recommendation by those involved in the program was to increase the level of operating funding provided. The budget for the program has not increased in recent years. Budget issues limit the level of services that can be delivered, limit the ability of the organizations to market themselves and reach segments which they consider to be underserved, and contribute (or are anticipated to contribute over the next few years) to turnover amongst staff members.

The maximum size of loans that can be provided was also identified as a constraint. The level has not been increased since the program was established. The current maximum of $100,000 constrains the ability of the WEI to loan money to businesses in industries that require higher levels of capital (e.g. manufacturing) than the typical retail, service or hospitality business.

Subject to the availability of increased funding, some of the steps that were identified by the WEIs that could be considered to build on the strong results and further increase the impact of WEI going forward include:

Continue to raise the profile of the program by creating more awareness of the services offered.

Some provinces have particularly highlighted the need to reach out to certain groups such as Aboriginal, immigrant, older and younger women who may be underrepresented as clients.

Continue to work to increase regional access to services across the provinces.

Make greater use of the loan funds that are available. As of March 31, 2008, approximately

49% of the aggregate loan funds of the four organizations were outstanding.

Strengthen partnerships with other business organizations in the province and with WEI offices in other provinces.

Increase access to aftercare services, with a particular focus on identifying businesses at risk

and working with those in a position to expand.

Continue to upgrade and expand the capabilities of the website (e.g. provide greater opportunities for women entrepreneurs to promote their business and interact with each other) while ensuring that the content remains up-to-date.

Expand other services. Suggestions included expanding training services to ensure that

women have the skills to not only start businesses but also expand their business as well as staging more networking events that bring women together in an informal setting.

11. WEI has contributed to achievement of the intended outcomes outlined under WD’s Program

Activity Architecture.

More specifically, as outlined in the previous points, WEI has helped to:


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EXECUTIVE SUMMARY

Improve business productivity and competitiveness by promoting awareness and adoption of

management and business practices as well as facilitating the creation of business networks. Clients report that the wide range of WEI business services have helped them to further develop their business, management and/or personal skills, increased their access to other programs and services, enabled them to network with other entrepreneurs, increased their access to information for decision making, and encouraged them to start and/or further develop their own business.

Increase access to risk capital and business services for entrepreneurs and small

businesses. In addition to the nearly $23 million in loans provided by the four organizations, WEI services have increased access to capital from other sources through assisting women entrepreneurs in the development of business plans and in providing referrals to other sources of capital.

12. The economic return on the investment made by WD has been significant.

WEI organizations have received $18.8 million in operating funding over the past five years. Even without taking into consideration the impacts of their services on non-loan clients, the WEI organizations are generating one person year of employment for every $4,246 in operating funding they receive. On a per dollar of operating funding basis, the loan clients attribute $19.30 in revenues, $0.96 in export revenues, $4.43 in wages, and $1.46 in new investment to the services received from WEI.

Introduction

1 Background

2 Purpose of the Impact Assessment

3 Method of Study

5 Structure of the Report

The Women’s Enterprise Initiative

6 Program Mandate

6 Organizational Structure

7 Types of Services Provided

14 Logic Model

16 Funding Provided by WD

Key Research Findings

17 Increased Access to Services

21 Characteristics of the Clients Served

23 Impacts on the Clients

27 Characteristics of the Client Businesses Served

31 Impacts on the Loan Clients

40 Impacts on the Non-loan Clients

42 Perceived Need for the Program

46 Factors Contributing and Constraining Success

Differences Across Provinces

57 Characteristics of the Clients

58 Characteristics of the Services Received

60 Characteristics of the Businesses


INTRODUCTION

Impact Assessment of the Women Enterprise Initiative Page 1

I. Introduction

A. Background 1. Western Economic Diversification Western Economic Diversification (WD) Canada administers a suite of coordinated programs to bring together industry, community and different levels of government to help businesses successfully adapt to changing market conditions and advance in the global marketplace in order to ensure continued economic growth and prosperity in Western Canada. The programming of WD falls into three strategic categories:

Policy, Advocacy and Coordination, which consists of policies and programs that strengthen the

Western Canadian economy. Policy, Advocacy and Coordination activities are intended to: Foster an improved understanding of Western Canadian economic issues, challenges,

opportunities and priorities through research and analysis; Advance Western Canada’s interests in national policies, priorities and programs through

awareness and outreach exercises with partners and stakeholders; and Facilitate better coordinated economic development activities, policies and programs in the

West through collaboration.

Community Economic Development, which consists of activities aimed at ensuring that the communities in Western Canada are economically viable. Community Economic Development activities involve:

Economic development and diversification initiatives that support communities to sustain

their economies and adjust to changing and often very challenging economic circumstances; and

Infrastructure initiatives to maximize economic, social, cultural and environmental benefits to Western Canadians through investments in public infrastructure in a coordinated manner with provincial and municipal governments.

Entrepreneurship and Innovation, which consists of activities geared toward ensuring that the

business sector in Western Canada is competitive, expanded and diversified and the innovation system is strong.

Entrepreneurship activities are designed to improve business productivity, develop new

markets, promote industry collaboration and alliances, encourage foreign direct investment, and facilitate access to capital; and

Innovation activities help companies with technology adoption and commercialization, build technology linkages, promote applied research and development, foster community innovation, and support the development of a highly skilled technology workforce as well as an extensive knowledge infrastructure.

WD’s programs help to strengthen the economy of Western Canada by promoting diversification of Western Canada's heavily resource-based industrial structure, expansion of the value-added component of current economic output, stable long-term economic growth, improvement in business productivity, and the creation of skilled jobs and technologies that will drive the economies of the future.


INTRODUCTION


2. The Women’s Enterprise Initiative Women play an important role in the creation and operation of small businesses across Canada, yet they often face barriers and a lack of support. To help address these barriers, Western Economic Diversification Canada (WD) established the Women's Enterprise Initiative (WEI) in 1994. Through a series of non-profit organizations operating in each of the four western provinces, WEI provides a variety of unique products for women entrepreneurs including advisory services, training options, networking opportunities, business loans and referrals to complementary services. The organizations have proven to be valuable to women entrepreneurs. A specific recommendation of the 2003 Prime Minister’s Task Force on Women Entrepreneurs report was that the Federal Government should establish Women’s Business Centres throughout Canada, modeled on the WEI organizations supported by WD, which would build on and partner with existing resources. The report also recommended that the Federal Government ensure that the WEI organizations are maintained and provided with long-term support. A 2004 evaluation of the WEI found that: Women entrepreneurs continue to face barriers (e.g. access to capital) related to business start up

and growth; The WEI organizations provide gender sensitive and appropriate services for women

entrepreneurs; Due to their gender specific orientation, the services provided by the WEI organizations are not

duplicated by other members of the WD's Western Canada Business Network (WCBN). In addition to WEI, the WCBN consists of Community Futures, Canada Business service centres, and Francophone Economic Development Organizations;

The WEI organizations fill a particular niche for small loans and support services to women

entrepreneurs in all areas of commerce, especially in retail and service enterprises; There is a need for WD to support the WEI organizations; and

The objectives and activities of the WEI organizations are consistent with WD’s mandate1.

B. Purpose of the Impact Assessment The purpose of this project is to conduct an impact assessment of the WD-funded activities of the four WEI organizations covering the five-year period from April 1, 2003 through March 31, 2008. The impact assessment measures the benefits – positive and negative, intended and unintended – that the WEI has had on their clients and communities. More specifically, it focuses on both outputs and outcomes: Key outputs include loans, advisory services, training and information services.

Key outcomes and related performance indicators include the number of businesses created,

maintained and expanded, number of jobs created and maintained, increased revenues, leveraged financing, and client satisfaction.

1

Evaluation of the Women’s Enterprise Initiative, Goss Gilroy Inc., October 2004


INTRODUCTION


C. Method of Study We conducted this study in two phases. The primary objective of the first phase was to prepare a detailed work plan that was then implemented in the second phase of the study. Phase I: Preparation of the Detailed Work Plan The work that we undertook to prepare the detailed work plan included: Conducted an initial meeting with the Advisory Committee to confirm the scope of the study

and the specific outputs desired. During the meeting, we reviewed the work plan contained in the proposal, the Statement of Work and other key documents to ensure that the purpose, scope and objectives for the assignment are clearly understood, how the assignment is to be undertaken within the stipulated time frame and budget, and the major elements to be contained in the final report.

Compiled available information regarding the funding provided by WD and the services

delivered and results reported by the WEI organizations from 2003 to 2008. We reviewed various documents and relevant files from different sources including reports, operating plans, annual reports, and other statistical and administrative data. We also discussed the process for accessing lists of clients from which a sample could be generated.

Developed a profile of WEI including a program "logic" model. The profile describes the

activities that have been supported and presents a preliminary description of the service delivery model as well as an overview of the target groups. The program model clearly defines the intended outcomes and illustrates the linkages between those outcomes and the activities of WEI organizations that have been supported by WD.

Finalized the research questions and defined the performance indicators and data sources

that were be used in addressing each issue. Developed questionnaires for the impact assessment. We analyzed the information available

from secondary sources as well as the input provided by WD and WEI representatives to determine what information needs can be fulfilled from secondary sources and what information needs must be addressed through primary research. Based upon this analysis, we then developed survey instruments to address the information gaps identified.

Prepared the detailed work plan. We then met with the Advisory Committee to obtain approval of

the detailed work plan prior to proceeding with the field research. Phase II: Field Research The major components of our field research included: Surveyed a sample of 444 WEI clients from across the four provinces. We worked with the

WEI organizations to distribute an e-mail to clients for whom e-mail addresses were available. The e-mail letter referred the clients to the project website where they could complete the survey online. Alternatively, clients were invited to contact us by e-mail, through the website, or by telephone (toll-free) to set up an appointment to complete the survey by telephone. We also obtained lists of clients from Saskatchewan and Alberta (loan clients only) as well as a partial list of BC loan clients


INTRODUCTION


whom were able to call directly. At a confidence level of 95%, a sample of 444 WEI clients surveyed from across the four provinces achieves of margin of error of about ± 4.6%.

As an impact assessment, the most important source of information is the interviews conducted with the clients. Clients can be divided into two major categories: those who received loans (usually in addition to other services) and those who only received other types of services. Of the two categories, loan clients are in the best position to report on economic impacts because loans tend to be more directly associated with changes in economic activity than are softer services such as training or the provision of information. Furthermore, clients are often better able to directly attribute such changes to receiving a loan than to other services. Of the 444 clients who participated in the review, 175 were loan clients. The non-response error tends to be lower amongst loan clients than amongst other types of clients because the contact information is more likely to be up-to-date and loan clients may be more likely to participate because of the perceived significance of the assistance that they received. A limitation of the review is that we were not able to directly approach clients in all provinces but rather had to rely on the willingness of clients, once contacted by WEI, to contact us or complete a questionnaire online. As a result, it is difficult to assess whether the clients who responded to the survey are representative of the overall population. That being said, the overall response among loan clients is generally high ranging from 25% in Manitoba to 47% in British Columbia which adds to the reliability of the data. Furthermore, the characteristics of the loan clients who responded appears to be generally consistent with the profile of clients overall in terms of characteristics such as size of loan. Response Rate Amongst Loan Clients

Province Loan

Respondents Loans

Received Total Loans Approved

Response Rate

British Columbia (WEC-BC) 39 50 107 47%

Alberta (AWE) 52 54 126 43%

Saskatchewan (WESK) 59 66 201 33%

Manitoba (MWEC) 25 34 138 25%

WEI Total 175 204 572 36%

At a confidence level of 95%, a sample of 204 loans from across the four provinces achieves of margin of error of less than ± 5.5%. During the process of analyzing the results, we called back many of the clients (particularly those who had responded online) to confirm the key data provided or to fill gaps in responses.

Conducted interviews with a sample of 31 WEI and WD staff as well as 25 Board Members (current and past) who have been involved in the management, development and delivery of the program. The sample included representatives from each of the four provinces in Western Canada. We also conducted a focus group of Board Members in BC.

Conducted interviews with 30 other stakeholders who may be able to provide an outside

opinion of the impacts of the program. The individuals interviewed included representatives associated with:

Other assistance programs (e.g., Community Futures, Canada Business, Business


INTRODUCTION


Development Bank of Canada, Canadian Youth Business Foundation); Organizations with a focus on women & entrepreneurship; Industry organizations/ associations (e.g., chambers of commerce, economic development

organizations, home based business associations, etc.); and Other selected experts.

The purpose of these interviews was to obtain another perspective on issues such as the need for and impacts of the assistance provided.

Conducted field trips to WEI

offices in each of the four provinces. During each field trip, we conducted interviews with key staff members of the WEI organizations; reviewed background information on any activities (e.g., business advising or training) selected for further review. We also conducted a focus group session with a sample of clients, with a particular focus on the activities selected for further review.

In total, in addition to other participants providing input through the focus groups, 530 people provided input into the impact assessment. A summary of the number of interviews or surveys conducted by province is provided in the accompanying chart. As indicated, the number of people providing input ranged from 111 in BC to 152 in Saskatchewan.

D. Structure of the report The report is divided into four chapters. Chapter II provides the profile of the Women Enterprise Initiative in Western Canada in terms of its

objectives, service delivery model, major activities, program logic model, and budget. Chapter III summarizes the major findings of our review regarding the services provided to

entrepreneurs, the characteristics of the clients served and the impact of the services on them, the characteristics of the businesses served and the resulting economic impacts, the factors contributing to and constraining the success of the program, and the perceived need for the program.

Chapter IV summarizes the results of the client survey by province. The major findings and

conclusions arising from the report are presented in the Executive Summary.

Number of Interviews By Province

13

14

14

15

6

9

7

8

118

129

109

88

0 40 80 120 160

MB

SK

AB

BC

WD staff, WEI staff and Board MembersStakeholdersClients


THE WOMEN’S ENTERPRISE INITIATIVE


II. The Women’s Enterprise Initiative

This chapter provides an overview of the Women Enterprise Initiative (WEI) in Western Canada in terms of its objectives, service delivery model, major activities, program logic model, and budget.

A. Program Mandate Each of the four provinces served by WD (British Columbia, Alberta, Saskatchewan, and Manitoba) has established a WEI organization that is responsible for the administration and delivery of WEI services. The mandate of the WEI organizations is to encourage the establishment and growth of women-owned and controlled businesses, encourage self-employment and business development, and to promote economic equality between men and women. This mandate is supported through:

Introducing and promoting the concept of entrepreneurship to women; Increasing the availability of capital to women-owned enterprises; and

Providing services to help women develop the experience, expertise, assets and credit track

records enabling them to increase both the number and the strength of women-owned businesses in Western Canada.

B. Organizational Structure

Each provincial organization is named and organized uniquely, reflecting the differing needs and client base of each province. WEI is implemented through the four not-for-profit organizations including:

The Women’s Enterprise Centre (WEC-BC), which operates in BC;

Alberta Women Entrepreneurs (AWE – the legal name is Alberta Women Entrepreneurs

Association);

Women’s Entrepreneurs of Saskatchewan Inc. (WESK); and

The Manitoba Women’s Enterprise Centre (MWEC). Each WEI organization is an independent entity which has its own Boards of Directors with broad representation from their respective provinces. A Chief Executive Officer (CEO) is responsible for administrative and operational duties of each provincial WEI organization. The CEO reports to the Board of Directors, which oversees the policy and direction of the organization. Board Members are knowledgeable about business and the challenges that women face as entrepreneurs. Each provincial organization is responsible for its own approach to the delivery of services in order to best meet the needs of its particular economic and demographic client base. The following table summarizes the number of staff, Board Members, volunteers, and volunteer hours reported to WD by the organizations as of March 2008. As indicated, the four organizations reported an average of eleven staff members and eight Board Members.




Reported number of staff, board members and volunteers as of March 2008

WEC-BC AWE WESK MWEC

Number of Staff 13 9 11.5 11.5

Number of Board Members 7 8 7 10

Number of Volunteers 212 10 227 18

Hours Committed by Volunteers

1,888 672 564 494

Source: data reported to Western Economic Diversification In addition to the Board Members, volunteers may be involved in the delivery of various services and activities. For example, the training programs in BC make extensive use of storytellers to bring real life examples to the learning process. Storytellers are local women business owners who volunteer their time and are willing to tell their stories to the audience in a facilitated discussion format. Similarly, volunteers in Saskatchewan work with the organization either as a mentor offering her specific experience and enthusiasm or as a guest speaker at the monthly Lunch & Learn and Breakfast Series seminars to share her expertise. The four organizations provide services throughout their respective provinces from offices located in nine communities.

Location of Offices by Province

WEC-BC AWE WESK MWEC

Kelowna (head office) Vancouver Victoria

Calgary (head office) Edmonton

Saskatoon (head office) Regina

Winnipeg (head office) Thompson

The WEI organizations are responsible for marketing efforts to promote small business, administering their organization and participating in Pan-Western activities. Each provincial organization operates at arm’s length from WD, but provides WD with regular financial and operational reviews.

C. Types of services provided Each WEI organization delivers a range of services including business services (business advisory, training and skills development, information services and referrals, and networking and mentoring) and capital lending. A brief description of the services in each of these areas is provided below. 1. Business Services WEIs deliver a range of technical support, training and information services to women entrepreneurs who are starting, purchasing, or growing a small business. These services include:

Business Advisory services such as:

Assistance with business plans;




Business planning and counselling; and Export readiness and supplier development.

Training and Skills Development services in areas such as:

Self-employment skills; Marketing; Strategic planning; and Financial management.

Networking and Mentoring services such as:

Peer mentoring groups; One-to-one mentoring; and Mentor Advisory Forums.

Information Services and Referrals including:

Access to government programs; Access to business libraries; Access to business databases; and Electronic links to municipal, provincial, regional and federal sites and Canada

Business Service Centres in the respective provinces. Some examples of each type of service are provided in the following table.

Examples of Services Provided

Type of Services Example of Services

Business Advisory

Working with clients on a one-to-one basis, providing services in all areas of business management and development, from start-up and expansion issues to dealing with barriers

Hosting business orientation sessions

Training & Skills Development

MWEC offers various fee-paying seminars and various workshops including: o Start up to Sustainability sessions: introductory sessions for

women in the early stages of business start-up and those considering entrepreneurship as a career option

o Experienced-Expanding sessions: facilitated by the members of Certified Management Consultants of Manitoba. The “Experience Speaks” sessions are geared to women at the growth and expansion stage of their business

AWE offers a How to Outsell Big Companies workshop: focusing on how to outsell big companies by mastering time management and specific strategies to close the maximum amount of sales

WEC-BC offers Going Solo! For Aspiring Entrepreneurs: an exploration to the world of entrepreneurship and business start-up using real-world examples to help participants develop a vision for their business and investigate potential gaps in business plans




Type of Services Example of Services

Networking & Mentoring

WESK offers three types of mentorship programs including : o Pan-West Business-to-Business Linking Program: links a

member with a non-competing business owner in Western Canada from the same industry

o Raj-Manek Business Mentorship Program: one-on-one mentoring by experienced business owners and executives to protégés

o Mentoring Circles: provides an opportunity for members who are existing business owners to meet on a regular basis providing a forum to share business experiences, serve as a sounding board, provide feedback, and generally act as a support group

WEC-BC also offers three types of mentorship programs including: o Peer Mentoring: provides women entrepreneurs the personal

contact with others in the community who are facing the same challenges. A group of up to eight women meet under the supervision of a facilitator (experienced entrepreneur) who acts as an overall supervisor and mentors the group

o One-on-One Mentoring: links an experienced mentor to a mentee who is in the first two years of business and is motivated to work towards business success

o Mentoring Advisory Forum: organized in a way such that two or three mentors participate in a 90 minute forum by telephone via a teleconference line held by WEC-BC to discuss a specific topic with pre-registered women entrepreneurs

Information

Distributing eNewsletters Answering phone or e-mail inquiries Providing referrals to learning guides and associated coaching

sessions and other resources Developing self-directed, web-based loan information sessions

The mentoring program in BC is funded by the Provincial Government rather than WD. WESK is unique from the other organizations in that it is a fee-paying membership-based organization. Members have access to business advisory services, membership referrals, mentoring, use of the boardroom, advertising (office display bulleting), an online member directory, and other benefits. As of March 31, 2008, WESK had 860 members. On an annual basis, the four WEI organizations reported the number of services for the three types of business services they provide. These include: Business Advisory services, defined to include services provided on an individual basis such as assistance with business plans, business counselling, and specific skills counselling; Training and skills development services, defined to include the number of participants/clients trained; and Information services, reflecting the number of times that WEIs provided information services to clients as a result of telephone enquiries, walk-ins, consultations, and information sessions. A summary of the number of reported business services over the past five years is included in the table on the following page.




WEI Business Services Performance April 2003 – March 2008

Business Advisory

Training & Skills Development

Information Services Regional

WEI Year Services

provided to clients

Training sessions delivered

Number of clients trained

Services provided to

clients

Website visits

03/04 1,483 42 626 2,015 101,027 04/05 1,281 135 3,302 4,939 65,750 05/06 1,328 109 3,310 9,484 69,924 06/07 1,116 36 879 11,930 131,078 07/08 3,021 62 806 12,078 303,837

British Columbia (WEC-BC)

Total 9,712 384 8,923 40,446 671,616 03/04 1,171 96 2,061 18,808 N/A 04/05 1,142 100 1,548 18,445 N/A 05/06 1,018 99 537 27,351 N/A 06/07 4,461 192 616 25,860 27,615 07/08 1,258 29 348 2,893 21,494

Alberta (AWE)

Total 9,050 516 5,110 93,357 N/A 03/04 750 101 749 1,826 44,155 04/05 940 83 567 1,867 47,966 05/06 2,185 130 993 2,303 68,977 06/07 1,957 84 735 2,130 69,154 07/08 1,671 86 728 2,731 76,798

Saskatchewan (WESK)

Total 7,503 484 3,772 10,857 307,050 03/04 599 49 639 11,820 7,199 04/05 632 56 676 10,397 9,289 05/06 591 52 543 9,577 17,053 06/07 748 92 1,140 10,367 31,278 07/08 1.079 123 898 5,684 43,872

Manitoba (MWEC)

Total 3,649 372 3,896 47,845 108,691 03/04 3,906 288 4,075 35,145 N/A 04/05 3,995 374 6,093 35,648 N/A 05/06 5,122 390 5,383 48,715 N/A 06/07 8,996 404 3,370 50,287 259,125 07/08 5,971 300 2,780 23,386 446,001

WEI Total

Total 29,914 1,756 21,701 192,505 N/A

2. Access to Capital WEIs provide capital to assist existing businesses for expansion as well as help entrepreneurs create new businesses. The maximum amount of a loan is $100,000 throughout the four provinces. To be eligible, the applicant must be: A woman who owns and controls a business2 that is registered and located in the particular Pan-

West province; A Canadian citizen or Permanent Resident; Residing in the particular province; and In good standing with WEI on any existing financing.

2 Ownership and control is typically defined as at least 51% management control over the operations of the business across the provinces, with the exception of Manitoba where ownership must be 50%. Alberta Women Entrepreneurs (AWE) has also specified owning at least 50% of voting shares or 50% partnership interest in addition to the 51% management control. Detailed specifications may vary amongst the provinces.




Furthermore, in making loans, the organizations commonly consider the following criteria: Business Plan and three years financial projections that demonstrate the viability of the business

venture; Two years audited financial statements for an existing business or if purchasing an existing

business; Good credit history of all shareholders/partners; Owners contribute certain amount of equity investment into the business; and Ability to provide collateral to secure the loan.

The application and evaluation process for capital lending is often done in three stages. These are: Business Advising Stage: The woman entrepreneur works with a business advisor who will

assess her business needs, identify the loan requirements, determine whether or not her request meets the lending criteria of the WEI, help the applicant on the development of a business plan, and whether more information is required.

Loan Application Stage: The Loan Application form is submitted and a credit review is performed

on all shareholders/partners. As part of the loan assessment, business advisors at WEI organizations also review the applicant’s business plan.

Final Review Stage: In the final stage, the entrepreneur’s loan application is assessed, taking into

consideration issues such as the viability of the business venture; management and operational capacity; marketability and consumer acceptance of the product/service; repayment capacity; credit history; collateral security; owner equity; and capacity to financially contribute to the business. The length of time it takes to approve or decline the loan depends on the amount of money being requested, the complexity of the business plan, and the speed at which the applicant is able to respond to information requests from the WEI Business Advisor.

As clients make repayments, the principal and at least a portion of the earned interest is returned to the general loan fund for future use. Over the past five years, the four WEI organizations have approved and provided 572 loans totaling $22.9 million. According to the data reported by the organizations: The average value of loan approved was $40,106, ranging from $34,414 in Manitoba to $48,827 in

BC. A client may have received more than one loan over the five-year period.

The loans created or maintained over 2,000 jobs over the five years, which is equal to about 3.7 jobs per loan. Approximately one job was reported as created or maintained for every $10,750 in loans provided;

The loans were leveraged with $20.7 million in funding from other sources, which represents about

$0.90 for every dollar in loans approved under the WEI; and 54% of the loans were approved to new businesses while 46% were approved for existing

businesses. A summary of capital lending performance by province is provided in the table on the following page.




Capital lending performance indicators by province for the period April 1, 2003 to March 31, 2008

CAPITAL LENDING SERVICES

Loans to business

Regional WEI

Year Number of loans

approved

Value of loans

approved

Amount leveraged

Jobs created/

maintained New Existing

03/04 26 $1,276,964 $0 96.5 15 1004/05 23 $1,113,900 $622,500 147.5 16 605/06 20 $1,231,576 $190,200 87.5 15 506/07 17 $639,500 $1,843,371 42.5 6 1107/08 21 $962,500 $2,357,595 107 10 11

British Columbia (WEC-BC)

Total 107 $5,224,440 $5,013,666 481 62 4303/04 23 $522,000 $315,000 64 12 1104/05 48 $1,480,377 $861,000 194 28 2005/06 28 $996,405 $1,202,250 72 22 606/07 9 $362,617 $281,850 18 4 507/08 18 $983,379 $1,861,146 75 14 4

Alberta (AWE)

Total 126 $4,344,778 $4,521,246 423 80 4603/04 44 $1,853,165 $1,095,849 83 28 1604/05 46 $1,961,877 $1,836,851 122 29 1705/06 40 $1,619,150 $1,376,825 206 24 1606/07 35 $1,581,035 $1,171,000 141 9 2607/08 36 $1,607,250 $1,881,603 142 14 22

Saskatchewan (WESK)

Total 201 $8,622,477 $7,362,128 694 104 9703/04 34 $1,195,137 $1,147,715 103 16 1904/05 25 $902,899 $183,259 122 9 1505/06 31 $900,750 $551,800 87 18 1306/07 24 $841,500 $318,859 80 15 907/08 24 $908,815 $1,601,435 143 15 9

Manitoba (MWEC)

Total 138 $4,749,101 $3,803,068 535 73 6503/04 127 $4,847,266 $2,558,564 346 71 5604/05 142 $5,459,053 $3,503,610 586 82 5805/06 119 $4,747,881 $3,321,075 453 69 5006/07 85 $3,424,652 $3,615,080 282 34 5107/08 99 $4,461,944 $7,701,779 467 53 46

WEI Total

Total 572 $22,940,796 $20,700,108 2,134 319 251

Over the past five years, there has been a significant increase in leveraged funds. The rise of leveraged funds can be attributed, especially in the last three years, to the fact that WEIs have introduced more stringent reporting requirements to ensure they account for all investment dollars. The chart on the following page shows the five-year trend of loans, leveraged funds, and total investment (equal to the value of the loan and leveraged funds) made by WEI loan clients.




FIVE-YEAR TREND OF LOANS, LEVERAGED FUNDS, AND TOTAL INVESTMENT BY WEI

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

2003/2004 2004/2005 2005/2006 2006/2007 2007/2008

Th

ou

sa

nd

s

Value of loans Leverage Total investment

The size of individual loans approved over the past five years ranged from $1,000 to $100,000. As indicated below, according to the individual loan data supplied to us by each WEI organization, approximately two-thirds of approved loans are for less than $50,000 in value including 25% which are between $10,000 and $24,999 in value and 28% which are between $25,000 and $49,999.

Distribution of Loans Approved

$0 to $4,999

5%

$5,000 to $9,999

8%

$25,000 to $49,999

28%

$50,000 to $74,999

16%

$10,000 to $24,999

25%

$75,000 and over18%

We also obtained data on the recent status of loans from each WEI organization. According to this data, 50% of the loans issued over the past five years are still active, 39% have been paid in full and 11% have been written off or in default. The pie chart on the following page shows the recent status of loans issued over the past five years.




Status of Loans Issued Over the Past Five Years

Paid in Full39%

Active50%

Written-Off/ In Default11%

The four organizations have written off approximately $1.7 million in funding, which is equivalent to 7.5% of the value of the loans approved over the past five years. This does not necessarily mean that 7.5% of the value of the loans issued over the past five years has or will be written off over time; some of the loans which have been written off over the past five years were made prior to the five year period while portions of the loans currently active may yet be written off. As of March 31, 2008, the value of loan funds of the four WEI organizations totaled about $16.3 million of which $7.7 million was outstanding. The remainder was generally held in short-term investments.

Value of loan funds and loans outstanding,

March 31, 2008 ($ million)

WEC-BC AWE WESK MWEC Total

Loans Outstanding $1.7 $2.0 $3.2 $1.6 $8.5

Cash and Short-term Investments

$2.4 $2.0 $2.1 $2.2 $8.7

Total Value of the Loan Funds

$4.1 $4.0 $5.3 $3.8 $17.2

Sources: Financial statements of the organizations

D. Logic Model A program model illustrating the interrelationships between the business services activities, outputs, and intended impacts is provided on the following page. As indicated, in the short-term, the services supported under WEI are intended to increase access to capital, leverage of funding from other sources, support further development of business, management and personal skills, increase networking activity, increase awareness of and access to other programs and services, and increase access to information for business decision making. Over the medium-term, it is intended that the services will result in development and maintenance of businesses, improvement in management practices, and increased economic activity (e.g. revenues, employment, wage, investment, exports, etc). Over the longer term, the Initiative will contribute to further development and diversification of the Western Canadian economy.




Program Logic Model dor the WEI

Activities Marketing of the programs and

services

Loan application review & portfolio

management

Training and skill

development programs

Networking and

mentoring services

Business

advisory services

Information services

Outputs Loans Training Events Business Planning

Advice and Information

Short-term Impacts Increased access

to capital

Leveraging of funding from other sources

Development of business,

management and personal skills

Increased

networking

Increased awareness of and

access to programs and

services

Increased access to information for

business decision making

Intermediate Impacts

Development & maintenance of businesses

Improved management practices Increased economic activity

(revenues, employment, investment, etc)

Longer Term Impacts and

Effects Development and diversification of the Western Canadian economy




E. Funding Provided by WD WD has provided three types of funding for each WEI organization: Contributions to the Loan Fund. Each organization could receive up to $5 million in loan funds,

which flowed over a ten-year period between April 1995 and March 2005. None of the organizations received the full amount, with Saskatchewan, BC and Alberta each receiving about $4.2 million. These loan funds, which are conditionally repayable, are provided to the organizations for the sole purpose of lending to women-owned and controlled businesses.

Operating Funding. WD provides annual funding for operating costs under the terms of an

agreement which expires on March 31, 2010. The original agreement for operating funding expired in 2000, was renewed for another 5 year term to 2005, and then extended to 2010. Under the existing agreement, each organization can receive up to $975,000 annually.

Project Funding. The organizations may also be eligible to receive funding from WD for various

projects such as special events, seminars, programs, and other initiatives. Over the past five years, the funding provided by WD to the four organizations has totalled $22.3 million of which operating funding has made up the largest percentage.

WEI funding by province for the period from April 1, 2003 to March 31, 2008

WEC-BC AWE WESK MWEC Total

Operating $4,811,825 $4,101,809 $4,914,880 $4,981,700 $18,810,214

Capital $850,000 - $800,000 $850,000 $2,500,000

Projects $543,290 - - $410,099 $953,389

Total $6,205,115 $4,101,809 $5,714,880 $6,241,799 $22,263,603

Source: Western Economic Diversification The table below summarizes funding (all three types combined) provided by WD by province and by year.

WEI funding by year for the period from APRIL 1, 2003 TO MARCH 31, 2008

2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 Total

WEC-BC $866,009 $1,503,414 $1,682,308 $1,144,766 $1,008,618 $6,205,115

AWE $529,716 $880,843 $975,000 $975,000 $741,250 $4,101,809

WESK $1,039,237 $1,357,963 $1,475,000 $901,138 $941,542 $5,714,880

MWEC $1,497,670 $1,525,212 $1,093,009 $1,103,718 $1,002,190 $6,241,799

Total $3,932,632 $5,267,432 $5,225,317 $4,124,622 $3,713,600 $22,263,603

Source: Western Economic Diversification


KEY RESEARCH FINDINGS


III. Key Research Findings

This chapter summarizes the major findings of our review regarding the services provided to entrepreneurs, the characteristics of the clients served and the impact of the services on them, the characteristics of the businesses served, the resulting economic impacts, the factors contributing to and constraining the success of the program, the perceived need for the program, and differences in results across province, types of clients and types of businesses served.

A. Increased Access to Services

The major findings of our review regarding the services utilized by the clients, the frequency of interaction of clients with the organizations, and the level of satisfaction with the services are as follows: 1. The programs provide a range of services to assist women entrepreneurs.

Most clients (60%) reported receiving more than one type of service. Of the clients whom we

surveyed, 58% have participated in a training session or seminar, 48% have received one-on-one business counselling, and 42% indicated that they have received a loan under the program. The chart below summarizes the percentage of clients who reported receiving the various types of services.

SERVICES RECEIVED BY THE CLIENTS SURVEYED

12%

14%

35%

42%

48%

58%

0% 10% 20% 30% 40% 50% 60% 70%

Participated in a mentoring program

Pathfinding to identify other business resources

Assistance in the development of a business plan

Received a loan

Business counselling (one-on-one)

Par ticipated in a training program/seminar

Percent of clients interviewed rece iving service

Examples of other services identified by clients included receipt of newsletters and other

publications, meetings, conferences, and other events, and business awards. 2. On average, the clients estimated that, over the past 5 years, there has been 11 occasions

during which they have participated in counselling, training, mentoring or seminar sessions provided by or arranged through WEI organization and/or contacted the organization in person or by telephone to obtain information.

As indicated in the chart, most clients have utilized the services of the organization (excluding loan services) 5 or fewer times. However, 9% of the clients identified

NUMBER OF CONTACTS OVER THE PAST 5 YEARS

6 to 1019%

5 and under49%

25 and over9%

11 to 2515%

None8%




themselves as frequent users having been in contact with the organization 25 or more times over the past five years. Those who reported no contact with the organizations related to counselling, training or information services generally consisted of loan clients who received loans but did not report receiving other types of assistance.

3. Loans provided by the WEI assist client businesses in different stages.

On average, the loan clients reported receiving $51,693 in loans (an average of $42,318 per loan) during the past five years. Of the loans provided to the 175 loan clients we interviewed, 16% totalled $10,000 or less, 26% totalled between $10,000 and $25,000, and 58% totalled more than $25,000. The 175 loan clients who participated in the survey reported receiving 204 loans, totalling $8.6 millions in value. Taken together, the value of loans received by these clients represents 36% of the number of loans approved and 38% of the value of loans approved over the past five years. Of the 204 loans issued to these clients:

109 (53%) were made to start up operations; and

95 (47%) were made to businesses which were already operating.

In some cases, clients both received a start up loan and subsequently received a further loan or loans once they were established. On average, clients interviewed received 1.2 loans at a value of $51,693. The loan clients indicated that the loans they received were used to:

Start up new operations either in the form of a new business or new operations within their

existing business (identified by 57% of the loan clients);

Expand production (35%);

Cover working capital/operating costs (20%);

Fund market development (9%); and

Fund the development and/or commercialization of new products (5%).

Other uses reported by the loan recipients included buying an existing business, purchase of assets, renovation and relocation, and technical services and upgrades.

4. Most clients (75%) have been very satisfied with the assistance they received through WEI.

When asked to rate their satisfaction with the assistance received from WEI on a scale of 1 to 5, where 1 is not at all satisfied, 3 is somewhat satisfied and 5 is very satisfied, the clients provided an average rating of 4.1. As indicated in the chart below, while 75% of the respondents indicated that they are fairly or very satisfied with the assistance received (a rating of 4 or 5), only 5% indicated that they are not at all satisfied (a rating of 1).




LEVEL OF CLIENT SATISFACTION REGARDING WEI ASSISTANCE

5% 6%14%

23%

52%

0%

10%

20%

30%

40%

50%

60%

1 - Not at allsatisfied

2 3 - Somewhatsatisfied

4 5 - Verysatisfied

Clients who were satisfied with the assistance they received noted that: The knowledgeable, friendly staff not only offered guidance and helpful advice but also provided

significant moral support and encouragement (identified by 174 clients); The organization increased their access to resources and information. Clients noted that a

wealth of information is available on site and on the organization’s website, questions were answered promptly, and they were kept informed of upcoming seminars and networking opportunities through regular e-mails and phone calls (121 clients);

The business planning sessions and training programs offered by the organization were well-

organized, educational, interactive, practical, specifically relevant to women, tailored to the audience (e.g. demographics, business or professional experience, and geographic region) and affordable (47 clients);

The organization provided them with financial support that was crucial to their business and

guided them through the loan process. In addition, some clients highlighted the flexible payment options and terms (42 clients); and

The mentoring and networking opportunities enabled them to meet other successful women

entrepreneurs, learn from each other, and develop business relations (26 clients). Clients who were not at all or not very satisfied with the assistance they received (a rating of 1 or 2) commented on: A lack of follow-up or follow-on services (identified by 21 clients); Concerns about staff turnover and/or of the capabilities of the staff (21 clients);

That the training sessions or seminars were not relevant to their needs (e.g., they were more

tailored to the needs of small, start-up businesses rather than established businesses – noted by 14 clients);

Concerns about the location (e.g. in major centres/out of reach for clients in rural communities)

and/or timing of events, training or seminars (8 clients); and

Concerns about the lengthy process or eventual outcome associated with the loan applications (5 clients).




As would be expected, clients who interact more often with the organizations tended to be the most satisfied. For example, the average satisfaction rating amongst clients who have been in contact with the centres 25 or more times over the past 5 years was 4.5. The average satisfaction rating amongst clients who have been in contact with the centres 5 or fewer times was 4.1. The women who attended the focus group sessions, drawn primarily from those who received business counselling or participated in training, also indicated a high level of satisfaction with the services received. These clients characterized the WEI staff/instructors as friendly, readily available to talk or meet with them, and capable of providing both technical support and encouragement to the clients in their efforts to move forward with their business. Only a few of the focus group participants expressed concerns with services they received. Similar to the results of the interviews, these concerns related to lack of a formal process for following up with the clients and specific concerns that they did not receive a loan or support for their business plan/concept. A few women also mentioned that, because of staff turnover, they had several business advisors which made the process of preparing their business plan more difficult. Despite the staff turnover, these women were happy with the service they received.

5. Loan clients tend to have received a wider range of services, been in more frequent contact with the organizations, and be somewhat more satisfied with the services than are other types of clients.

To compare the satisfaction of clients who have received different services, we divided the clients into four groups: Loan clients include those who have received loan funding, often in addition to other

services; Non-Loan clients include clients who have received services other than loan funding; Counselling clients include those who have received business advisory services possibly in

addition to other services including a loan; and Training clients include those who have participated in at least one training session,

possibly in addition to other services including a loan.

It is to note that the clients groups are not mutually exclusive and are categorized solely for the purpose of comparison of satisfaction and impacts perceived. As indicated in the table below, satisfaction levels tend to be high amongst all four groups, ranging from 3.9 amongst non-loan clients to 4.5 amongst loan clients.

Reciept of services by client group

Measures/ Type of Clients Loan Non-Loan Counselling Training

Number of Respondents 175 269 204 246

Percentage Receiving Services Received a loan 100% 0% 45% 27%

Business counselling 53% 42% 100% 48%

Development of a business plan 46% 25% 48% 33%

Training program or seminar 37% 67% 58% 100%

Mentoring program 10% 13% 14% 14%

Pathfinding to identify other resources 10% 16% 17% 15%

Average Number of Contacts Made 14.1 8.4 13.2 12.3

Average Satisfaction Rating 4.5 3.9 4.3 4.2




A small majority of the loan clients reported receiving business counselling and, more specifically, reported receiving assistance in the development of a business plan. Two-thirds of the non-loan clients had participated in a training program or seminar.

B. Characteristics of the Clients Served The demographic characteristics of the WEI clients who participated in the survey are summarized below: 1. Most of the WEI clients (85%) are between the ages of 25 and 54.

In comparison to the general population of women in Western Canada aged 20 years and older as reported in the 2006 Census, WEI clients are more likely to be in the 35 to 44 years and 45 to 54 years age ranges.

Age Characteristics of Clients

Demographic Characteristics Loan Non-Loan General

Population

20 to 24 years 2% 1% 9%

25 to 34 years 23% 20% 17%

35 to 44 years 34% 30% 20%

45 to 54 years 29% 36% 21%

55 to 64 years 12% 13% 15%

65 years or older 1% 1% 19%

Total 100% 100% 100%

In comparison to non-loan clients, loan clients are somewhat more likely to be aged 25 to 44 years and somewhat less likely to be 45 to 54 years of age.

2. WEI clients tend to be more educated than is the general population of women in Western

Canada. Whereas 50% of the female population in Western Canada identified their education level to be high school or under, over 80% of the WEI clients reported some form of post-secondary education (e.g. college, university, or post-graduate level of education). Non-loan clients were much more likely to indicate that they had a university degree than were loan clients.

Education Level of Clients

Education Level Loan Non-Loan General

Population

Less than high school 2% 1% 21%

High school 16% 8% 29%

College or diploma program (2 years and under)

44% 33% 27%

University degree and above 38% 58% 24%

No response - 1% -

Total 100% 100% 100%




Clients who reported a college diploma, university degree, or post-graduate degree were asked to indicate whether their diploma/degree is related to business management. One-third of the loan clients and 30% of non-loan clients indicated that their diploma/degree is related to business management.

3. Loan clients tend to have somewhat more experience in business management than do the non-loan clients. One-fifth (19%) of the non-loan clients indicated that they have no experience in the business field as compared to only 6% of the loan clients. The loan clients who reported no business experience are in the process of starting up their business.

Level of Business Experience

Business Experience Level Loan Non-Loan

None 6% 19%

Less than 2 years 10% 15%

2 to 5 years 28% 23%

6 to 10 years 25% 19%

11 to 15 years 12% 10%

Over 15 years 20% 15%

Total 100% 100%

For most clients, their experience is directly linked to the operation of their current business.

4. Most clients found out about the program through word-of-mouth, referrals from other

organizations, or the Internet.

When asked how they first found out about the WEI organization, clients most commonly identified word-of-mouth referrals from friends, family, or colleagues. In comparing the two groups, loan clients were more likely to be referred to the program by another organization or government while non-loan clients were more likely to find out about WEI services through advertisement or story and the Internet.




How did you first find out about the Centre?

0%

13%

30%

31%

4%

8%

11%

17%

27%

7%

6%

6%

16%

6%

19%

19%

0% 10% 20% 30% 40% 50%

Trade show

Other

Referred by government

Pamphlet/brochure

Advertisement or story

Internet

Referred by another organization

Word of mouth

Non-loan clientsLoan clients

Examples of other organizations that provided referrals included: Various business centres (e.g., the Business Link in Alberta, Small Business BC, Canada

Manitoba Business Centre, the Canadian Youth Business Foundation); Local women’s networks (e.g., Saskatoon Women’s Network, Women Business Owners,

Women Entrepreneurs of Canada, Enterprising Mom’s Network); Community Futures Development Corporations (CFDCs);

Other community resources (e.g., economic development offices, chambers of commerce,

YWCA, career centres, schools, and business courses);

Financial institutions (e.g., commercial banks, credit unions); and

Accountants and other business services.

Examples of government organizations that were mentioned by clients include Western Economic Diversification, Business Development Bank of Canada, Aboriginal Business Canada, Indian and Northern Affairs Canada, Service Canada, and public education and training institutions and programs. The other category includes phonebooks, driving or passing by the facility, networking events or workshops, and postings.

C. Impacts on the Clients We asked the clients to rate the impacts that the services they received had on themselves. The major findings are summarized as follows: 1. The WEI clients reported that the services had a wide range of impacts on them.

Using a scale of 1 to 5, where 1 is no impact at all, 3 is somewhat of an impact, and 5 is major impact, the clients were asked to rate the impact that the services they received have had on them in terms of:




Increasing their access to other programs and services; Helping develop their business, management and/or personal skills; Encouraging them to start their own business; Enabling them to network with other entrepreneurs; Increasing their access to information for decision making; and Increasing their access to financing or capital from sources other than the organization.

As indicated below, the impacts that were rated highest are in the areas of skills development, increasing access to other programs and services, and enabling them to network with other entrepreneurs. The chart also highlights the percentage of clients who rated the impact as a 4 or 5 (i.e. a major impact). It should be noted that the average ratings are reduced by the fact that each type of impact is not relevant to each client; for example, only a percentage of the clients would be looking for services which would assist them in accessing other sources of funding or further developing their business management skills.

PERCEIVED IMPACTS GENERATED BY THE SERVICES IN TERMS OF:

2.7

2.9

3.0

3.1

1.9

3.0

14%

34%

35%

37%

38%

39%

0 1 2 3 4 5

Access to other sources of funding

Encouraging them to start their ow n business

Increased access to information for decision making

Enabling them to netw ork w ith other entrepreneurs

Increasing access to other programs and services

Helping develop business management skills

Average Rating w here 1 is no impact at all, 3 is somew hat of an impact, and 5 is a major impact

0% 20% 40% 60% 80% 100%

% rated the impact as a 4 or 5 (major impact)

The types of impacts identified by the client are highlighted below:

Helping develop business, management, and/or personal skills (average rating of 3.1)

Clients reported further development in skills related to business planning, marketing, financial management, business management, and general business knowledge through training programs, seminars, networking opportunities, and review of materials. Clients noted that training sessions helped them to learn how to access information and resources relevant to their particular sector, better understand possible business structures, organizational issues and legal issues, utilize market research to define their target markets and understand the competitive environment, and gain confidence in carrying out their business. The marketing workshops offered by the organization helped clients in developing marketing and promotional strategies for their businesses. Financial management sessions were reported to assist clients to acquire bookkeeping skills, understand tax issues, and read and prepare financial statements. The general business management and networking seminars allowed them to improve their personal skills in managing and recruiting employees, as well as




developing connections with other women entrepreneurs and business opportunities. In addition to the sessions, the information and resources the organization has gathered and made available online were also recognized as a useful tool in developing business and management skills.

Increasing access to other programs and services (average rating of 3.0)

The clients felt that the staff, information and resources available through the offices as well as the WEI websites and newsletters increased their access to information about other programs and services related to networking and mentoring, training, professional development, business development, financial management, marketing, and business planning. Some of the programs that the clients specifically mentioned gaining access to include the Canadian Youth Business Foundation, Aboriginal Business Canada, programs at the YWCA, the Self-Employment Program (SEP), commercial banks, business consultants, business services centres, local women entrepreneur networks, and libraries. A few clients commented that having the organization as a “front door” through which they were able to identify and access other programs and services was particularly useful. Clients who attended the focus group sessions confirmed that the WEI services had increased their access to other programs and services in the community. Most had worked with a business advisor who helped them to identify their needs and make use of referrals. Several women indicated that the advisor has helped them with a business plan which they were then able to use to apply for a loan through another institution.

Enabling them to network with other entrepreneurs (average rating of 3.0)

The WEI organizations facilitate networking by staging events and seminars as well as informing clients of events, seminars, and workshops (not necessarily staged by the WEI organization) via e-mails, newsletters, phone calls and postings. Clients reported being motivated and inspired by other women entrepreneurs that they met at networking events as well as training workshops, luncheon meetings, and mentoring groups held by the organization. These events and seminars also allowed women to exchange information and build business relations with each other. A few clients mentioned that the provincial organizations and/or WD had featured their stories in publications or videos which attracted and connected them with other potential women entrepreneurs with similar interests. This impact was most commonly identified by those who had participated in training programs, mentoring programs or events. Clients who had only received a loan or business counselling services were less likely to report an impact in terms of networking with other entrepreneurs. The entrepreneurs who attended the focus group sessions commented that they would appreciate even more opportunities to network with other women business owners. They acknowledge that it can be difficult to find the time to attend events outside work hours but still feel that networking is important. A few women noted that they sometimes feel intimidated at events held by other organizations, such as chambers of commerce, because many of the members have been in business for a long time. In addition, some of the women have non-traditional businesses (the wellness area, for example) and feel nervous about promoting themselves at these events. In some provinces, clients suggested that the WEI websites could be used to enable women




entrepreneurs to network with each other. This could involve having a discussion board and an option of posting a business profile. As an example, in Saskatchewan, members are able to browse profiles of all members and make contacts with each other.

Increasing access to information for decision making (average rating of 2.9)

When asked what helped them to access information for decision making, clients identified sources including staff and resources available at the office, business planning sessions, financial management workshops, marketing workshops, networking seminars, and the information on the website.

In general, clients felt that knowing where to find information and acquire professional assistance greatly increased their access to information for decision making. The WEI organization was able to not only directly connect them with various books and contacts relevant to their business but also help clients find out about a range of information available and where to access it. The entrepreneurs who attended the focus groups stressed that one of the most important roles of the business advisor is to give them the tools to make a decision. They recognized that the WEI is an excellent resource and, if the advisors do not have the information the client needs, they will work with the clients to identify the appropriate resources.

Encouraging them to start their own business (average rating of 2.7)

Many of the women who had already made the decision to start a business prior to approaching WEI noted that advisors played a very important role in encouraging them to continue progressing towards that objective. More specifically, clients recognized the importance of the motivational and emotional support provided by the WEI staff as well as their technical assistance in areas such as business planning and counselling. The staff members were described as positive, supportive, motivational, and professional in their advising and counselling services.

The women entrepreneurs who attended the focus groups said that the role of the business advisor is to assist them in making a good decision rather than necessarily encouraging them to start a business if they are not ready or do not have a feasible business idea. A few women in the focus groups were in that position. One woman, for example, abandoned her original business idea once she realized there was little market for her product. She is currently working with a business advisor on a new plan.

Increasing access to financing or capital from sources other than WEI (average rating of

1.9)

The low ratings reflect that most clients were not looking for capital from sources other than WEI loans when they approached the organization. However, some clients indicated that the advisors did play an important role in helping them prepare their business plan, which they then took elsewhere, and/or in providing referrals to other sources of capital such as the Business Development Bank of Canada, the Canadian Youth Business Foundation, commercial banks, Community Futures Development Corporations, credit unions, Aboriginal Business Canada, and other local and federal assistance.




2. The ratings provided by loan clients were relatively consistent with those provided by non-loan clients.

As shown in the chart on the following page, loan clients were somewhat more likely to identify increasing access to financing from other sources as an impact while non-loan clients were somewhat more likely to identify impacts related to management, business and personal skill development, increased access to information for decision making, and increased access to other programs and services as impact.

The chart also show the impacts reported by clients who participated in training sessions or used the services of a business advisor. Not surprisingly, clients participating in training programs or seminars were those most likely to report impacts related to the skills development and networking.

D. Characteristics of the client businesses served The key characteristics of the businesses operated by the clients who were surveyed are summarized below: 1. Of the 444 clients who were surveyed, 309 (70%) are currently operating a business.

When asked to identify the current status of the business for which they received assistance, 85% of the loan clients and 59% of the non-loan clients indicated that the business is currently operating.

CURRENT STATUS OF THE BUSINESS

Loan Client Non-loan Clients

Current Status of the Business Number Per cent Number Per cent

It is currently operating 149 85% 160 59%

It is still in the planning stage but not yet operating 11 6% 81 30%

It was being planned but now will not proceed 0 0% 17 6%

It has temporarily stopped operations 2 1% 4 1%

It has permanently stopped operations 11 6% 0 0%

Other 2 1% 9 3%

Total 175 100% 269 100%

For loan clients, the other category includes businesses that were sold. For non-loan clients, the other category consists primarily of clients who were using the services solely for information and/or education purposes (i.e. they had no intention to start a business).

2. Of the businesses that are currently operating, most are in the service or retail sector, have

operated for 4 years or less, employ four or fewer people, and generate revenues of $250,000 or less annually.




Comparison of Average Ratings on Impacts Between Client Groups with Percentage of Clients who Rated the Impact 4 or 5 (Major Impact)

2.0

3.0

3.2

3.2

3.3

3.3

1.9

2.9

3.2

3.4

3.3

3.4

2.1

2.7

2.7

3.0

2.9

2.8

1.8

2.7

3.1

3.1

3.1

3.2

0 1 2 3 4 5

Increasing access tofinancing from other

sources

Encouraging them tostart their own

business

Increasing access toinformation for

decision making

Enabling them tonetwork with others

Increasing access toother programs and

services

Helping developmanagement and

business skills

Average ratingsWhere 1 is no impact at all, 3 is somewhat and 5 is major impact

Non-Loan Clients

Loan Clients

Training

Counselling

* The groups are not mutually exclusive. Loan clients include those who have received loan funding often in addition to other services; Non-Loan clients include clients who have received services other than loan funding; Counselling clients include those who have received business advisory services (possibly in addition to other services including a loan; and Training clients include those who have participated in at least one training session (possibly in addition to other services including a loan).

11% rated major

18%

11%

15%

39% rated major

36%

42%

44%

39% rated major

34%

45%

44%

40% rated major

29%

41%

42%

33% rated major

37%

36%

42%

41% rated major

35%

48%

47%




The following table compares the characteristics of the businesses of loan and non-loan clients.

Comparison of the characteristics of businesses

operated by loan and non-loan clients

Characteristics of the Businesses Operated Loan Clients Non-Loan Clients

Number of Businesses Currently Operating 149 160

Sector

Manufacturing 8% 4%

Retail 29% 16%

Wholesale 4% 3%

Primary Production 1% 0%

Construction 1% 2%

Real Estate or Insurance 0% 2%

Accommodation, Food and Beverage 8% 4%

Professional Services 31% 47%

Other 18% 24%

Total 100% 100%

Years in Operation

Less than 1 year 8% 15%

1 to 4 years 47% 46%

5 to 9 years 30% 23%

10 to 24 years 13% 13%

25 years or more 2% 3%

Total 100% 100%

Average 5.7 years 6.0 years

People Employed in the Organization

1 to 4 63% 84%

5 to 9 21% 8%

10 to 19 13% 7%

20 or greater 3% 2%

Total 100% 100%

Average 5.8 employees 2.8 employees

Projected Revenues for the Current Fiscal Year

$0 to $25,000 6% 32%

$25,001 to $50,000 12% 15%

$50,001 to $100,000 20% 20%

$100,001 to $250,000 17% 12%

$250,001 to $500,000 21% 10%

Greater than $500,000 24% 11%

Total 100% 100%

Average $475,266 $272,473

Comparison to Previous Years

Projected Revenues for the Current Year (excluding new business with no previous comparables)

$465,025 $357,842

Previous Year Revenues $405,271 $318,233




Characteristics of the Businesses Operated Loan Clients Non-Loan Clients

Average Increase in Revenues 15% 12%

Revenues and Wages Per Employee

Number of Employees 5.8 2.8

Average Revenues Per Employee $81,942 $97,312

Average Wages Per Employee $18,795 $29,670

Export Sales

Percentage of Companies Reporting Export Sales 17% 11%

Export Revenues as a Per Cent of Total Revenues 5% 7%

Investment

Average Investment Per Business $171,335 n/a

Average Revenue Per Dollar Invested $2.31 n/a

As indicated, the size of the average business operated by loan clients tends to be significantly larger than the average business operated by non-loan clients, generating revenues of $475,266 (as compared to $272,473 for non-loan clients). On average, the loan clients are projecting that their revenues are increasing by 15% this year over last year while non-loan clients are projecting an increase of 12%. The size of the average business operated by loan clients also tends to be significantly larger than the average business operated by non-loan clients in terms of employment, with an average of 5.8 employees (as compared to 2.8 for businesses of non-loan clients). These levels of employment equate to an average of one employee for $18,795 in wages paid and $81,942 in revenues for the businesses of loan clients and an average of one employee for $29,670 in wages paid and $97,312 in revenues for the businesses of non-loan clients. The average wages per employee is low because of the nature of the operations (e.g. lower paying retail and service jobs), the part-time or seasonal nature of some of the work, and the fact that the employment levels include the entrepreneur who does not necessarily draw compensation or significant compensation in the form of wages.

Most loan clients also reported data on the amounts invested in their business (including equity and any loans including WEI loans). According to the clients surveyed, the loans represent about 30% of the approximately $171,000 on average, that has been invested in these businesses. This means that $2.35 has been invested in the businesses for every $1.00 provided in WEI loans. Based on the reported revenue levels, the average revenue is equal to $2.31 for every $1.00 invested in the business.

The other sources of financing most commonly identified by the loan clients include funds invested by the client or partners, commercial lenders, and family and friends.




OTHER MAJOR SOURCES OF FINANCING BY NUMBER OF LOAN AND NON-LOAN CLIENTS

2%1%

1%

10%

55%63%

6%

6%

32%

15%

9%3%

18%

4%

0% 20% 40% 60% 80% 100%

Private sector equity investors

Provincial government sources

Other

Other Federal government sources

Family/friends

Commercial lenders

Self/Partner

Non-Loan ClientsLoan Clients

Other sources of financing identified by the clients include internally generated funds, education loans, and vendor financing.

E. Impacts on the Loan Clients At the time of the survey, 149 of the loan clients were operating businesses, 11 were still in the final planning stages and expected to be operating this year, and 15 businesses had ceased operations (temporarily or permanently including those which had been sold). The chart below traces the evolution of the businesses from the first contact.

As indicated, when the loan clients first approached the WEI centre, 35% were operating businesses and 65% were not. Of that 35%, 33% are still operating and 2% have ceased operations. Of the 65% who were not yet operating, 60% subsequently started up operations of which 55% are still operating and 5% have ceased operations or were sold. The annual revenues of the 59 businesses that already existed when they initially approached the WEI organization for a loan ranged in size from under $10,000 to over $1,000,000.

Status of the Loan Client Prior To and After Receiving Assistance

Operating (35%)

Ceased Operating (2%)

Continuing (33%)

Not Operating (65%)

Started Up (60%)

Not Yet Operating (5%)

Still Operating (55%)

Ceased (5%)




A major objective of our survey of clients was to develop an estimate of the economic impact (in terms of revenues and employment) that the assistance provided to WEI clients has had. It is important to not only track changes in the client businesses over time but to also obtain input regarding the extent to which those changes are attributable to the services provided by WEI organizations. In reviewing the economic impact, we focused most heavily on loan clients because those are the clients most likely to be impacted by the services and for whom the impacts are most easily measured and extrapolated. To assist us in this regard, we asked the loan clients a series of questions related to issues such as:

The value of the loan or loans received; How long the business has been operating; The status and revenues of the business when the first service (usually a loan) was provided that

significantly impacted the business; The size of the business in the previous fiscal year (e.g. revenues, employment, wages and

exports) and the estimated revenues for the current fiscal year; Total investment in the business to date; and How important the service provided by the WEI was to the development of the business and how

likely it is that the clients would have been able to obtain the loan from another source in the absence of the program (expressed as a probability percentage). We also asked clients to estimate the level of revenues that would have been generated and the level of investment that would have been made in the absence of assistance from the program.

Our methodology focuses on defining the cumulative economic impacts that are generated by a typical WEI loan client business in the first five years after receiving assistance. A five-year period was selected because our sample was drawn from clients who have received assistance during the past five years. To the extent that the impacts of the assistance provided under WEI continue to go forward beyond five years, this approach underestimates the ultimate cumulative impact of the assistance provided. To estimate the five-year cumulative impact of the assistance provided, we divided the methodology into the following series of five steps:

The first step was to determine the growth rate in the revenues of the typical client business over a five-year period.

The second step was to estimate the survival rates of the typical client businesses over a five-year

period. What per cent of the businesses survive and how does that change over time? The survey results provided an indication of survival rates. However, we also had to adjust for the fact that the businesses which were surveyed tend to have higher survival rates than do those which we could not reach (i.e. the non-response error).

The third step was to calculate the net economic activity of the client businesses. Taking both the

growth rates and survival rates into consideration, what level of revenues does the typical client business generate over a five-year period?

The fourth step was to determine the extent to which the economic activity can be attributed to the

assistance provided by the WEI. In effect, based on the survey results, how much of this activity can the loans and other services provided through WEI take credit for?

The fifth step was to extrapolate the results to the larger population of loan clients who have been

assisted. To do so, we simply took the average impact per client and multiplied it by the value of loans provided over the past five years.




The results of each of the five steps are presented below. 1. The revenues of the WEI assisted businesses tend to grow each year that operations

continue.

To illustrate the growth pattern, we have developed a scatter diagram that shows the revenues reported by the loan clients by the number of years it has been since the first important service (usually a loan) was received through WEI. The data for the Year 0 represents the revenue in the year prior to the assistance being provided.

Revenues of Operating Business by Number of Years Since They Were First Assisted Under WEI

$0

$500

$1,000

$1,500

$2,000

$2,500

0 1 2 3 4 5 6

Th

ou

san

ds

Number of years since first important service

Rev

enu

es (

$)

As indicated, the revenues of the businesses tend to increase over time. In the following chart, we have developed a regression line based on the revenue data provided above (including outliers not shown in the chart) and used it to calculate the cumulative revenues that would be generated by clients over a period of five years.

Cumulative Revenues per Client by Year by Client Category

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

0 1 2 3 4 5 6

Tho

usan

ds


Rev

enu

es (

$)

Annual Cumulative

Over a five-year period, the average WEI client business which remained in business would generate about $1.9 million in revenues. In calculating the cumulative line, we have also adjusted




for any revenues generated by the businesses prior to receiving assistance from WEI. 2. Business survival rates decline over time but are difficult to estimate because of the non-

response error.

The second step was to determine the survival rates of the typical WEI client business over a five-year period. As noted earlier, about 8% of the businesses we surveyed have ceased operations (temporarily or permanently) or have been sold. The survey results overstate the actual survival rates because of the non-response error. Representatives of businesses which are no longer in operation are less likely to participate in the survey because the contact information maintained by the WEI is less likely to be up-to-date and, even when contacted, these clients may be less willing to respond.

In attempting to adjust for these factors, we have taken into consideration:

The default rate on loans. As noted in Chapter II, of the loans issued over the past five years, 50% are still active, 39% have been paid in full and 11% have been written off. These figures overstate survival rates to the extent that not all currently active loans will be paid in full and not all businesses which stop operating default on their loans. For the three provinces which provided detailed data on the status of each loan made over the past five years, the write-off rate increased from 0% amongst loans issued in fiscal 2008 to 4% amongst those issued in fiscal 2007, 5% amongst those issued in fiscal 2006, 16% amongst those issued in 2005, and 17% amongst those issued in fiscal 2004. In other words, 83% of the loans approved five years ago have not been written off.

The results of a recent survey conducted by WEC-BC. In April 2008, WEC-BC followed

up on loans awarded to businesses prior to 2004 and found that 73% were still actively in business 5 years after receiving their initial loan.

The results of previous studies we have conducted. For example, when we conducted an

assessment of the impacts of CFDCs in 2002, we obtained loan clients lists and were able to survey a larger sample of 808 loan clients. Taking into consideration, the survey results, loan default rates, and the percentage of businesses that we were not able to find (e.g. number out of service/no listing in the telephone directory), we estimated that the actual survival rate after five years could range from about 60% to over 75%.

Based on this information, we have roughly estimated that survival rates would range between 83% (which corresponds to the percentage of loans approved five years ago that have not been written off) and 67% (taking into consideration that not all businesses with active loans or who have paid off loans will still be in business after 5 years). It should also be noted that businesses which are no longer in operation are not necessarily unsuccessful; there are a variety of reasons why businesses may no longer be in operation related to factors such as the entrepreneur moving on to another business or obtaining employment, competing priorities, or health.




Estimated Range in Survial Ratesby Number of Years Since Assistance First Provided

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

1 2 3 4 5


% C

urr

entl

y o

pera

ting

Upper Band Lower Band

For the purpose of calculating the accumulated impacts in this study, we assumed that the actual survival rate is at the mid-point of the range (i.e., a survival rate of 75% after five years).

It is interesting to note that these survival rates are significantly higher than those of the typical business. According to Statistics Canada’s Longitudinal Employment Analysis Program (LEAP)3 which tracked the survival rates amongst businesses established between 1994 and 2003, 72% micro-businesses (fewer than 5 employees) in Canada were still operating after the first year, 46% were operating after three years, and only 35% were operating after five years. Similarly, 70% of small businesses with 5 to 99 employees in Canada were still operating after the first year, 46% were operating after three years, and 38% after five years. The following chart compares our estimated survival rates with Statistics Canada’s LEAP survival rates.

Comparable Small Business Survival RatesOur Estimates and Statistics Canada's LEAP Survival Rates

0%

20%

40%

60%

80%

100%

1 2 3 4 5Duration of Business (Year)

Sm

all

Bu

sin

es

s S

urv

iva

l R

ate

s (%

)

StatsCan Micro-Enterprises AverageStatsCan Small Business AverageOur Estimates

3 Key Small Business Statistics, Industry Canada, January 2008




3. After adjusting for survival rates, we estimate that the average WEI business (including those which are still operating and those which have ceased to operate) would generate revenues of approximately $1.5 million over the five-year period since the first important key service was provided.

The following chart shows the cumulative revenues of the typical firm, the estimated survival rate of the businesses (we have adopted the midpoint of the upper and lower bands from the previous table), and the product of the average annual revenues and the survival rates which is referred to as the adjusted cumulative revenue line.

Adjusted Average Cumulative Revenues of Businesses including Both Operating Businesses and Those That Have Ceased Operations

$0

$500

$1,000

$1,500

$2,000

1 2 3 4 5

Th

ou

san

ds


Re

ve

nu

e (

$)

0%

20%

40%

60%

80%

100%

% C

urr

en

tly

op

era

tin

g

Cumulative revenue Adjusted cumulative revenue Survival rate

If we assume that there is one person year of employment for every $81,942 in revenues, which is consistent with the data reported by the businesses surveyed, the average business would generate about 18.1 person years of employment over a five-year period. The wages associated with this employment would total about $341,107 over the five-year period. Export sales are estimated to total about $75,000 (assuming the export market accounts for 5% of sales revenues).

4. The majority of impacts generated by the services provided are incremental in that they

would not have occurred in the absence of the support provided by the program. To obtain data to be used in assessing incrementality, we asked the loan clients to estimate how

likely it is they would have been able to obtain their loans from another source (e.g. from banks or other financial institutions) if the program had not been available, how likely it is that they would have been able to develop their business to the extent that they did in the absence of the services received under WEI, and what they estimate their revenues would have been without those services. To provide an alternative perspective, we also asked WEI Board Members, staff and other stakeholders to estimate how likely it is that loan clients would have been able to obtain their loans elsewhere. The results indicate that:

The clients were, on average, only 34% confident that they could have obtained their loans

elsewhere (e.g. from banks or other financial institutions) if the program had not been available. Sixty-one per cent of the clients considered the prospects of obtaining financing elsewhere to be very unlikely (0% or 25%) due to their limited credit history or lack of collateral (identified by 41 loan clients), concerns of banks regarding the risky nature of the start up businesses (identified by 27 loan clients), perceived reservations in lending to women




or youth (identified by 8 loan clients), and the high level of risk associated with their sector (e.g., restaurant, retail, web services – identified by 6 loan clients).

ESTIMATES OF LOAN CLIENTS REGARDING THE LIKELIHOOD

OF OBTAINING THEIR LOAN ELSEWHERE

16%Loan clients

16%Loan clients

40%

Loan clients 21%

Loan clients 7%

Loan clients

0%

20%

40%

60%

0% 25% 50% 75% 100%

Likelihood of Obtaining Loan Elsewhere

% o

f Clie

nts

The responses of WEI Board Members, staff and other stakeholders suggest that the loan clients overestimate their ability to obtain loans from other sources. As indicated below, other stakeholders estimate that, on average, there was a 22% likelihood that loan clients could have obtained a loan from another source if the WEI loan has not been available while WEI Board Members provided an average estimate of 21%. WEI staff who felt comfortable estimating the likelihood provided an average estimate of only 5%. In general, these groups indicated that most loan clients would not have been able to obtain funding from other sources given the nature of the business and concerns regarding collateral or credit histories. It was noted that, even if the clients had been successful in obtaining a loan, the amounts may have been less, the interest rates higher, and the repayment conditions more stringent or less flexible which would have reduced the success achieved by the business. Although WEI does ask loan clients to guarantee the loan with any available capital, staff said they commonly ask for less than what banks require. In addition, the staff said that they are able to be more flexible with respect to repayment of loans. If a woman entrepreneur is unable to make a payment, the WEI is better able to work with her to keep the business on track.

Most loan clients believe that the loans and services they received have been very important

to them in the establishment or further development of their business. When asked to rate the importance on a scale of 1 to 5, where 1 is not at all important and 5 is very important, the average rating was 4.5 and 74% of the respondents indicated that it was very important.

AVERAGE RATINGS ON THE LIKELIHOOD OF

CLIENTS OBTAINING LOAN ELSEWHERE

5%

21% 22%

34%

0%

10%

20%

30%

40%

50%

WD & WEI staff WEI Boardmembers

Otherstakeholders

WEI clients




IMPORTANCE OF THE LOANS AND SERVICES RECEIVED BY PERCENTAGE OF LOAN CLIENTS

4% 2% 5%15%

74%

0%

20%

40%

60%

80%

100%

1 - Not at all 2 3 - Somewhatimportant

4 5 - Veryimportant

% o

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ts

On average, the businesses estimate that there was only a 34% chance that they would have developed their business to the extent that they did in the absence of the program. As indicated below, 41% of the clients felt that there was no chance of developing the business to this extent in the absence of the program whereas 12% felt that the loans and services had no impact on the eventual development of the business.

ESTIMATES OF LOAN CLIENTS REGARDING THE CHANCE OF DEVELOPING BUSINESS TO THIS EXTENT WITHOUT WEI ASSISTANCE

12%Loan clients

16%Loan clients

41%Loan clients

19%Loan clients 13%

Loan clients

0%

10%

20%

30%

40%

50%

60%

0% 25% 50% 75% 100%

Percentage chance of developing business to this extent in the absence of the Program

% o

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ts

This is not to say that the businesses would necessarily not have developed at all in the absence of the program. When asked to estimate what their revenues would have been in the absence of the services received, the loan clients reported that their revenues would have declined by 55% on an aggregated basis (i.e. revenues would have been equal to 45% of current levels). Larger businesses tended to be less likely to attribute their development to the service received. Similarly, the clients reported that the level of funding invested in their business (including debt and equity) would have declined by 36% on an aggregated basis (i.e. investment would have been equal to 64% of current levels). The investment would have declined less than the revenues because the loan clients believe they still would have invested funding from other sources and could possibly have replaced some or all of the WEI loans with alternative funding.

Using these figures, we estimated the extent to which the revenues of each client (or the change in

revenues if the business was already existing prior to receiving services) are attributable to the services received from the programs. More specifically, we have estimated that 55% of the




revenues and employment generated by these businesses over a five-year period are incremental in that they would not have occurred in the absence of the program. Therefore, we estimate that the services provided to each WEI loan client have, on average, over a five-year period generated:

Over $818,000 in revenues including $40,000 in export sales; About 10 person years of employment; and $187,600 in wages.

Given that the average client we surveyed received an average of $51,693 in loans, we therefore

estimate that the loans result in about $15.82 in incremental revenues for every dollar in loans provided and generate about 1 person year of incremental employment for every $5,179 in loan funding provided over a five-year period. Similarly, we have assumed that 36% of the investment (an average of $61,680 per loan client) is attributable to the services received from the programs.

5. By extrapolating the survey results to the entire population of WEI loan clients, we estimate

that (going out over a five-year period from when assistance initially provided) the $22.9 million in loan funding approved over the past five years has generated about $660 million in incremental revenues and 8,000 incremental person years of employment.

The following table summarizes the estimates on a per business basis and extrapolated to the total

population of loan clients based on the value of loans issues over the past 5 years.

Estimate of the aggregate economic impacts of the services provided to WEI loan clients

Indicator Per Loan Client Total Population of Loan Clients

Loans

Value of Loans Received $51,693 $22.9 million

Business Activity Over A Five-Year Period

Incremental Revenues Over 5 Years $1.5 million $660 million





Impacts Which Can Be Attributable to the Services of WEI

Total Revenues Over Five Years $818,000 $363 million





These figures underestimate the total economic impacts of the programs because they do not

include the impacts associated with clients who receive technical assistance but do not receive a loan under WEI.




The WEI organizations have received $18.8 million in operating funding over the past five years. Even without taking into consideration the impacts of their services on non-loan clients, the WEI organizations are generating 1 person of year of employment for every $4,246 in operating funding they receive. On a per dollar of operating funding basis, the loan clients attribute $19.30 in revenues, $0.96 in export revenues, $4.43 in wages, and $1.46 in new investment to the services received from WEI.

F. Impacts on the non-loan clients As part of the impact assessment, we also reviewed the impact of non-loan services with a particular focus on business advisory services and training. Each WEI organization employs business advisors who may work with clients on a one-to-one basis and host business orientation sessions. In addition, the organizations are involved in delivering a range of training programs. In 2007-08, the 4 organizations provided nearly 6,000 counselling services to clients and delivered 300 training sessions involving almost 2,800 people. Many of the training sessions are delivered in partnership with other organizations. To develop a better understanding of these services, we:

Interviewed WEI staff members who are involved in delivering the services; Conducted focus groups with clients who have received these services; and Reviewed the results of the clients surveyed regarding clients who received these services.

Because of the soft, incremental nature of many of the services, it is often difficult for clients to quantify the impact that an advisory service or a training program has had on their business. It was not unusual for clients in the focus groups or interviews to indicate that they were very satisfied with the services that were provided to them, to feel that it had helped them in starting up or operating their business by enhancing their confidence or skills as well as providing guidance and useful feedback, but not to be able to provide a reasonable estimate of the economic impact that it had. That being said, there were examples where clients reported significant impacts. For example, there were a number of clients who participated in the survey and/or the focus groups who indicated that their business was very unlikely to have been established without the assistance of the business advisor and/or the training they received. In some cases, these businesses are now generating revenues of $400,000 or more annually. With respect to the training that had been provided, we interviewed 181 clients who had received training but had not received a loan. The results of the focus groups and interviews with training clients (i.e. non-loan clients who received training) indicate that:

The training was provided to a mixture of clients who were in the process of starting a business, were already operating a business or who have not started a business. At the time of the survey, 64% of the training clients were operating businesses, 27% were still in the planning stages, 5% had been planning to start a business but will not be proceeding, 3% had been involved only for information purposes, and 1% had ceased operations.

Clients are very satisfied with the training that they have received. When asked to rate their

satisfaction with the assistance received from WEI on a scale of 1 to 5, where 1 is not at all satisfied, 3 is somewhat satisfied and 5 is very satisfied, the training clients (i.e. non-loan clients who received training) provided an average rating of 4.0. Participants in the focus groups indicated that they found the training to be very useful to them in developing skills in areas such as marketing and in encouraging them to move forward with their business.




Most training clients believe that the training and other non-loan services they received was

useful to them in the establishment or further development of their business but not critical. When asked to rate the importance on a scale of 1 to 5, where 1 is not at all important and 5 is very important, the average rating was 3.5 and 54% of the respondents indicated that it was fairly or very important (ratings 4 and 5). Of those who could provide an estimate, the training clients estimate that there was a 70% chance that they would have developed their business to the extent that they did in the absence of the program. As indicated below, 3% of the clients felt that there was no chance of developing the business to this extent in the absence of the services while 37% felt that the services had no impact on the eventual development of the business.

ESTIMATES OF TRAINING CLIENTS REGARDING THE CHANCE OF DEVELOPING BUSINESS TO THIS EXTENT WITHOUT WEI ASSISTANCE

37%Trainingclients

27%Trainingclients

21%Trainingclients

13% Trainingclients

3%Trainingclients

0%

10%

20%

30%

40%

50%

60%

0% 25% 50% 75% 100%


% o

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Training clients were also asked to identify their current revenues and to roughly indicate what their revenues would have been in the absence of the assistance provided. Based on the responses, we estimated the extent to which the revenues of each training client are attributable to the services received from the programs. Taken together, we have estimated that 8% of the revenues generated by the training clients could be attributable to training and other non-loan services received. Because clients who had more extensive interaction with the WEI organizations are those more likely to respond to the survey, these results would likely not be representative of the total population of clients who received training services.

We interviewed 112 clients who had received business advisory services but had not received a loan. The results of the focus groups and interviews with the advisory clients (i.e. non-loan clients who received business advisory services) indicate that:

The advisory services were provided to a mixture of clients who were in the process of starting a business, were already operating a business or who had not started a business. At the time of the survey, 57% of the advisory clients were operating businesses, 34% were still in the planning stages, and 7% will not be starting up, 1% had no intention to start a business, and 1% had ceased operations.

Clients are satisfied with the business advisory services that they have received. When

asked to rate their satisfaction with the assistance received from WEI on a scale of 1 to 5, where 1 is not at all satisfied, 3 is somewhat satisfied and 5 is very satisfied, the advisory clients (i.e. non-loan clients who received advisory services) provided an average rating of 4.1. The entrepreneurs highlighted that the advisors provided much needed encouragement,




access to various resources and tools, help in the development of a business plan, and assistance in making good decisions.

Most advisory clients believe that the business advisory and other non-loan services they

received have been important to them in the establishment or further development of their business. When asked to rate the importance on a scale of 1 to 5, where 1 is not at all important and 5 is very important, the average rating was 3.8 and 59% of the respondents indicated that it was fairly or very important (ratings 4 or 5). Of those who could provide an estimate, the advisory clients estimate that there was a 66% chance that they would have developed their business to the extent that they did in the absence of the program. As indicated below, 3% of the clients felt that there was no chance of developing the business to this extent in the absence of the services whereas 27% felt that the services had no impact on the eventual development of the business.

ESTIMATES OF ADVISORY CLIENTS REGARDING THE CHANCE OF DEVELOPING BUSINESS TO THIS EXTENT WITHOUT WEI ASSISTANCE

27%Advisoryclients

30%Advisoryclients

24%Advisoryclients

15%Advisoryclients

3%Advisoryclients

0%

10%

20%

30%

40%

50%

60%

0% 25% 50% 75% 100%


% o

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ts

Based on the responses given, we estimated the extent to which the revenues of the advisory clients are attributable to the services received from the programs. Taken together, we have estimated that 6% of the revenues generated by the clients could be attributable to the advisory and other non-loan services received. Again, these results may not be representative of the total population of clients who received advisory services.

G. Perceived need for the program Most representatives who were interviewed as part of the impact assessment believe that there is a strong need for the types of services provided through the Women’s Enterprise Initiative program. When asked to comment on the need of such a program on a scale of 1 to 5, where 1 is no need at all, 3 is somewhat of a need, and 5 is a major need, WD and WEI staff provided an average rating of 4.8, WEI Board Members and clients provided an average rating of 4.7, and other stakeholders interviewed provided an average rating of 3.7.




AVERAGE RATINGS ON THE NEED FOR THIS TYPE OF PROGRAM

3.7

4.7

4.7

4.8

0 1 2 3 4 5

Other Stakeholders

WEI Clients

WEI Board Members

WD & WEI Staff

Where 1 is no need at all, 3 is somewhat of a need, and 5 is a major need

The major factors identified by WD and WEI staff, Board Members and other stakeholders as contributing to the strong need for this type of program include:

Difficulties that women face in accessing capital. Capital was, by a wide margin, the issue most commonly identified by all of the groups interviewed as a major barrier facing women entrepreneurs. The key factors that were identified in our interviews and focus groups as constraining access to capital include:

Characteristics of the businesses. Women tend to own firms in slower growth sectors

that banks consider to be high risk, such as the service, retail and hospitality sectors, for which access to financing is generally more challenging for businesses to obtain. Banks often do not loan money for these types of businesses or will not loan money for inventory. As noted by the profile of client businesses, WEI regularly loans money to start up and expand businesses in these ‘high-risk’ industries. In addition, WEI works with banks to provide additional loan money for inventory and other business expenses that the bank is not willing to cover.

Earnings. On average, women in Canada still earn one-third less than men. For example,

only 17% of self-employed women make more than $30,000 a year, compared with 42% of men.

Availability of collateral. This lower earning power, combined with the need to withdraw

from the labour force to bear and raise children for periods of time, can contribute to women having less access to personal savings and assets they can use to help finance their businesses. Banks still assess risk primarily on the basis of whether or not the potential borrower has assets that can be used to provide collateral for loans.

Credit history. According to WEI staff, some women still do not have adequate credit

because family finances have been in a spouse’s name4. The banks will require women to have a spouse or parent, if available, co-sign for their loan or will ask for a considerable amount of capital to guarantee the loan (house, for example). Some women are only offered a line of credit which is not the same as having a loan to fund the business. The WEI assesses not just a woman’s credit history, but also her character and business plan to determine if the applicant qualifies for a loan.

4 Most staff feel this may change in the future as more younger women choose to become entrepreneurs; at the moment, the majority of clients are still women in their forties.




Mentioned less often but still considered a barrier is the perceived lack of credibility (stereotypes) that women business owners may face when they approach traditional lending institutions. Although attitudes toward women in business are changing, some women reported to WEI staff that they have had difficulty dealing with some banks.

The limited experience of those planning to start up a new business. As noted earlier,

many of the women entrepreneurs had very little business management experience prior to starting their business. As such, access to knowledge and information regarding issues such as business planning and available resources was identified as another barrier. Staff reported that many women are unsure about the first steps they should take when starting a business. As well, WEI staff reported that clients often do not have a lot of work experience and lack basic business skills such as bookkeeping and managing an office. The WEI in each province works with clients to identify their needs and provide direction to the resources that are available.

Competing priorities. Women may face significant work-life balance issues, particularly with

respect to the family. The impressive growth in the number of women entrepreneurs in Western Canada, which

has helped foster community growth and economic development. Between 1981 and 2001, the number of women entrepreneurs in Canada increased by 208% as compared to the 38% increase amongst men. As of 2002, one-third of self-employed Canadians were women. Women in Canada now make up a larger share of the self-employed segment than in any other country. According to Statistics Canada’s Labour Force Survey reports, there were 877,000 self-employed women in Canada in 2006, accounting for about one-third of all self-employed persons. Between 1996 and 2006, the number of self-employed women grew by 18% compared with 14% growth in male self-employment5.

The findings of our interviews are consistent with past research. A 2004 report by The Foundation of Canadian Women Entrepreneurs found that obtaining financing to support their business establishment and growth still remains a challenge to women regardless of their country or location. A recent survey (published in February 2008) of 500 residents and 150 women small business owners in BC, commissioned by WEC-BC, found that:

38% of residents disagreed with the statement that “women are usually able to get access to the capital they need to succeed in their own business”, while 49% agreed and 13% indicated that they do not know.

63% of BC residents and 52% of women entrepreneurs recognized that women business owners

in BC face more barriers than men. Other common barriers mentioned by the women entrepreneurs surveyed in the study include financial needs (15%), skills and personal development (11%), and time management issues (11%), which are consistent with our research findings6.

Barriers can be particularly acute for women based in smaller rural or northern communities. A 2005 research study involving MWEC investigated the changing needs of rural and Northern women in Manitoba through the use of discussion groups, focus groups and a survey. The study found that the access to credit

5

Key Small Business Statistics, Industry Canada, January 2008 6 BC Public Perceptions of Entrepreneurship for Women and Women Entrepreneurs Access to Financing Study, Mustel Group, February 2008




and financing is a significant problem for rural and Northern women in Manitoba. Many financial institutions are reluctant to lend capital to women because they may lack the required history and collateral. In addition, the average income levels reported by rural and Northern women are significantly lower than the Manitoba average. Rural and Northern women interviewed identified the lack of child care as the major barrier that prevent them from obtaining higher education, which in turn reduces their opportunities of getting employment or starting their own business. Other barriers included limited access to training supports as well as information on what programs were offered and the intricacies of getting approval to attend7. The 2003 Prime Minister’s Task Force on Women Entrepreneurs report found that women entrepreneurs continue to face gender specific barriers for start up and growth stages of their businesses and these barriers inhibit the full economic growth potential of this segment of the Canadian society. The Task Force report stated that there is still a huge need for support services and programs specifically geared to women entrepreneurs. The Federal Government was identified as playing an essential role in ensuring that the needs of women entrepreneurs are addressed, without which a significant segment of the Canadian economy will be left underdeveloped. It quoted data from the OECD and the World Bank confirming that countries with an active women’s entrepreneurial community enjoy a higher standard of living and are better places to live. When asked why there is a strong need for a program such as WEI in their province, clients responded that:

WEI offers significant counselling/advising assistance and training support for women who want to start their own business which is not available from any other source. By providing potential women entrepreneurs with assistance in planning their business, developing their business/management skills, counselling and advising, and network opportunities, WEI gives women an opportunity to pursue and realize their goal (identified by 197 clients).

The emotional and motivational support of WEI staff and mentors gives women entrepreneurs

confidence and encouragement. Clients felt comfortable in asking any questions and discussing any issues with their advisors without fear or pressure. Some clients recognized that there still exists an uneven playing field and stereotype for women to succeed in the business world and that other business organizations have tended to overlook the potential in women (identified by 137 clients).

The organization offers the vital financial assistance women require to start or expand their

businesses while commercial banks often decline their loan application due to limited credit history, collateral, and work experience. Some respondents praised WEI for focusing on the validity and feasibility of the business rather than just numbers (91 clients).

Some clients indicated that the growing economy has created many business opportunities

and there is a growing trend of young women entrepreneurs. Having resources available not only helps potential women entrepreneurs but also generates positive economic impacts including job creation (48 clients).

The organization increases access of women to information and resources as a “front door”

or “one-stop shopping” source where questions are answered, directions are given, and referrals are made in a timely manner. Some clients noted that, even though they do not access the services frequently, knowing that the organization is there when they need help is very important

7

Changing Needs of Rural and Northern Women in Manitoba, Women’s Enterprise Centre of Manitoba, May 2005




(44 clients). The networking events and seminars can inspire women entrepreneurs and provide

opportunities to interact with and learn from other women entrepreneurs. A number of clients noted that there are limited opportunities to network with women in business and the seminars allow them to connect with others who have similar interests and build business relations (24 clients).

Lastly, some clients felt that the organization is able to understand the challenges women

face in achieving work-life balance, particularly the responsibilities women may have in taking care of their family (12 clients).

H. Factors contributing and constraining success The major findings of our review regarding factors which contribute to and constrain the impacts of the program are as follows: 1. WEI is viewed as successful in achieving its key intended impacts. We first asked WEI staff, WD representatives, Board Members and stakeholders to identify what

they consider to be the most important indicators for measuring the success of the program. The key indicators were considered to be:

The number and value of loans provided; The number of clients served and services delivered; The success rate of the businesses assisted (particularly the survival rates of businesses

which received a WEI loan); The performance of the loan portfolio (e.g., default rates); The number of jobs created/maintained; The number of new start-up business assisted; The level of client satisfaction; Awareness of the WEI organization and services; and The number of members (Saskatchewan only).

Some WEI staff stressed that, in addition to the quantitative indicators on which they report to WD, it is important to consider softer, more qualitative indicators of success such as the impact on decision making. For example, it was stressed that it is just as important to help a woman entrepreneur reach a decision not to proceed with a business that will not be successful because of market, financial, or personal issues as it is to help a new business become established.

We then asked WEI staff, WD representatives, Board Members and stakeholders to rate how

effective they believe the program is in terms of the indicators that they identified, on a scale of 1 to 5 where 1 is not at all effective, 3 is somewhat effective and 5 is very effective. The average rating ranged from 3.5 amongst other stakeholders (who tend to be least familiar with the program) to 4.0 amongst WEI and WD staff to 4.3 amongst Board Members.




3.5

4.0

4.3

0 1 2 3 4 5

Other Stakeholders

WD & WEI Staff

WEI Board members

Where 1 is not at all effective, 3 is somewhat effective, and 5 is very effective

EFFECTIVENESS OF THE WEI PROGRAM

WEI was considered particularly successful in terms of increasing access to capital, assisting large numbers of clients, delivering a range of quality services, aiding in the start up and further development of businesses, improving the success rates of businesses, and raising awareness of the entrepreneurial option for women. It was also noted that, as a group, the businesses assisted by WEI make a notable contribution to the economy of Western Canada. With respect to raising awareness of the entrepreneurial option for women, it is interesting to note that progress is being made. A survey commissioned by WEC-BC found that:

Not only does 96% of the general public agree that entrepreneurship is a valuable option for

women, people also recognize that it is a valuable option for women at any age or life-stage (93%), as well as a valuable option for women of any ethnic background (94%).

In comparison to the previous baseline study conducted in 2006, the 2008 survey revealed that

the public awareness of accomplished women in business in BC increased significantly from 41% in 2006 to 63% in 2008.

When asked to identify areas where the program had been somewhat less successful, the areas most commonly identified related to reaching out to a particular segment (e.g. Aboriginal women, older women, and smaller communities), establishing a high profile for the program, and accessing the funding needed to expand the services it provides.

2. When asked to identify which types of services or support have been most important in

terms of generating these impacts, the most common response was capital lending followed by business counselling.

As highlighted earlier, women face significant challenges in accessing other sources of capital. It was noted that business counselling services, provided pre-loan (e.g. assistance in developing a business plan prior to applying for a loan) and/or post-loan (e.g. business aftercare), strongly complement the capital lending function by helping to improve business success rates and enhance the performance of the loan portfolio. The combination of loans and business counselling is considered unique to WEI and not offered by traditional lending institutions. Through the WEI, clients can work with a business advisor to develop a business plan which outlines the business idea, market, resources required, development plans, and income projections. According to both staff and clients, the resulting plans tend to be very detailed and often take weeks or months and several reviews to complete. Some entrepreneurs find the process onerous but, in




the end, very valuable. The plan addresses details that many new business owners would otherwise miss, which could affect the ultimate success of the business. For example, clients in focus groups noted that this process enabled them to develop a much better understanding of their market as well as the full cost structure and margins inherent in their business. If the WEI staff did not offer this service, women would have to develop a business plan on their own or hire a consultant. Training programs and seminars, networking, mentoring and general encouragement are considered important but were identified less frequently as the key services in terms of generating impacts. It was noted that training can prepare entrepreneurs who are just starting a plan and need some basic skills or can be targeted at more experienced entrepreneurs who wish to further develop their skills through more advanced training. One key to the importance of these services is that they are focused specifically at women. In the opinion of some staff and clients, “women do business differently” than men (e.g. it was suggested that women may be less aggressive, somewhat more risk adverse, and more open to assistance and advice). With respect to general encouragement, it was noted that “sometimes a woman entrepreneur just needs to pick up a phone and call someone for support”.

3. The professionalism and performance of the staff and CEOs combined with the guidance

provided by the Board of Directors is a key contributor to the success of WEI.

When asked to what they attribute the success of WEI, the majority of stakeholders, WEI and WD staff, and WEI Board Members identified staff including the CEOs who have strong managerial and leadership skills as well as the effective and proactive staff team who are highly motivated and committed to quality in service delivery. Similarly, in the focus groups, clients praised the commitment of staff to serving women entrepreneurs in the province and their willingness to work hard to ensure that women are in the best position possible to achieve success.

The CEO and staff are supported by a strong Board of Directors and extensive volunteer base. In 2007-08, there were 32 Board Members which is equal to an average of eight per organization. Over 3,600 hours were contributed by 467 volunteers (including Board Members), equal to an average of about 900 hours per WEI per year. The Board Members bring valuable expertise and a strong commitment to supporting the development of women entrepreneurs. Many of the Board Members play an important role in developing linkages between the WEI, their region and other organizations.

4. The WEI organizations have benefited significantly from the development of strong linkages

with other programs and services.

A key driver of the success achieved by WEI is the relationships which have been developed with other organizations. When asked to rate how successful WEI has been in establishing strong linkages with other programs and services on a scale of 1 to 5, where 1 is not at all successful, 3 is somewhat successful and 5 is very successful, WEI and WD staff provided an average rating of 4.8 while Board Members provided an average rating of 4.2.




4.2

4.8

0 1 2 3 4 5

WEI Board Members

WD & WEI Staff

Where 1 is not at all successful, 3 is somewhat and 5 is very successful

SUCCESS OF THE PROGRAM DEVELOPING STRONG LINKAGES WITH OTHER PROGRAMS AND SERVICES

In each province, there are a wide variety of organizations involved in delivering programs, services, and resources which can be of assistance to entrepreneurs. Examples of some of the other resources that were identified by clients, stakeholders, staff and Board Members are listed in the table below.

Examples of other programs and services to assist women entrepreneurs

Province Examples of Programs and Services Identified

British Columbia

Aboriginal Business Canada Aboriginal Capital Corporations/Advisory Services Business Development Bank of Canada Canadian Youth Business Foundation Chambers of Commerce Commercial Banks/Credit Unions Community Futures Development Corporations Service Canada (Self Employment Program) Small Business BC

Alberta

Canadian Youth Business Foundation Commercial Banks Community Futures Development Corporations Roaring Women The Business Link Women in Home Office YWCA

Saskatchewan

Aborignial Business Canada Business Development Centre Business Development Bank of Canada Business Info Source Business Plan Competition Canadian Youth Business Foundation Chambers of Commerce Commercial Banks Community Futures Development Corporations Regional Economic Development Authority SaskNative Economic Development Corporations Saskatchewan Indian Equity Fund




Province Examples of Programs and Services Identified

Manitoba

Aboriginal Business Canada Angel Network C/MBSC Canadian Youth Business Foundation Commercial Banks/Financial Institutions Community Futures Development Corporations Regional Economic Development Authority Service Canada Women Business Owners of Manitoba

The WEI organizations work hard to complement these and other resources by: Focusing on filling gaps. The services provided by the WEI organizations are designed to fill

specific gaps with respect to the types of services delivered, the target groups, and the ways in which they are delivered. Stakeholders saw very little overlap between the services of WEI and those of other organizations. While other organizations (e.g. CFDCs, BDC and financial institutions) may offer loans, they differ with respect to terms, approval criteria, the focus on women, and support services available (e.g. business counselling and help with business planning). No overlap was identified in other areas such as training or mentoring, which tend to be unique in terms of the content, focus and means of delivery. WEI staff noted that, before moving forward with new initiatives, products and services, they generally look to other organizations to determine what services are already available and whether there are opportunities to partner with or build on the efforts of other organizations.

Being active in the community. For example, other stakeholder organizations regularly

interact with WEI staff through mechanisms such as relationships with the CEO and other staff members, attendance at women’s networking and general business events, newsletters and other communications, and co-location. The stakeholders whom we interviewed included a cross-section of representatives associated with other programs (e.g., Community Futures, Canada Business, Business Development Bank of Canada, Canadian Youth Business Foundation), other organizations with a focus on women & entrepreneurship; and industry organizations and associations (e.g., chambers of commerce, economic development organizations, home based business associations, etc.). All of the representatives who were interviewed had interacted with WEI staff at some point and, therefore, were at least somewhat familiar with the program. When asked to rate their familiarity with the WEI program, the 30 stakeholders provided an average rating of 4.0 on a scale of 1 to 5, where 1 is not at all familiar, 3 is somewhat familiar and 5 is very familiar.

02

5

13

10

0

3

6

9

12

15

1 - Not at all familiar

2 3 - Somewhat familiar

4 5 - Very familiar

FAMILIARITY WITH THE WEI AMONGST STAKEHOLDERS




Establishing a strong referral network. Each province has an extensive referral list. For example, each province has developed a relationship with the Canadian Youth Business Foundation so that young entrepreneurs who work with WEI advisors become aware of the Canadian Youth Business Foundation as a loan option. In addition, the WEI staff regularly work with traditional lending institutions (banks and credit unions) to increase the funding available to women entrepreneurs. Other service providers with whom WEI is particularly active in terms of referrals include Community Futures, BDC, and regional business or female entrepreneurial organizations. Nineteen of the 30 stakeholder organizations reported that they make referrals and/or receive referrals from the organization on a regular basis. These referrals commonly focus on loan and financial assistance (identified by 13 respondents), business planning (8), networking and mentoring (5), training (4), counselling (3), and general information (2).

Partnering with other organizations wherever possible on specific services, events and

activities. Staff in each province noted that they partner with organizations to ensure that services are complementary rather than competitive and take advantage of opportunities to share resources and support each other in planning and organizing activities and events. The WEI organizations reported that they partner with a variety of organizations in delivering training programs, conferences, networking events, and other services in their respective provinces such as Community Futures, Canada Business Services Centres, chambers of commerce, women’s business networks, the Business Development Bank of Canada, provincial governments, Junior Achievement, Canadian Youth Business Foundation, financial institutions, colleges and various media outlets. The four organizations reported working with 177 partners in 2007-08.

NUMBER OF PARTNERS IN 2007-08 BY PROVINCE

WEC-BC AWE WESK MWEC OVERALL

71 50 35 21 177

Almost one-half of the stakeholder organizations (14 of 30) who were interviewed reported that they have partnered with WEI in planning, organizing, and delivering training workshops and/or networking events. Examples of joint projects included delivering presentations and shared training workshops, co-sponsoring events, sponsoring awards for members, video-conferencing, and bringing in speakers.

5. Other factors that contribute to the effectiveness of WEI include the success in meeting

client needs, the ability to create awareness and provide services across the provinces, and the balance of services provided.

The WD staff and the WEI staff and Board Members were asked to rate the success of WEI with respects to various aspects of service delivery (on a scale of 1 to 5, where 1 is not at all successful, 3 is somewhat and 5 is very successful) including: Creating awareness of its services among the target group; Serving women entrepreneurs from across the province; Meeting the needs of its clients; and Providing an appropriate balance of pre-care, capital, and aftercare services.

The results are outlined below.




4.0

4.4

3.6

3.9

4.2

4.2

4.5

4.6

0 1 2 3 4 5

Providing an appropriate balance of pre-care, capital, and aftercare services

Meeting the needs of its clients

Serving women entrepreneurs from across the province

Creating awareness of its services

Where 1 is not at all successful, 3 is somewhat and 5 is very successful

AVERAGE RATINGS ON THE SUCCESS OF PROGRAM DELIVERY IN:

WD & WEI StaffWEI Board Members

The major comments provided by those interviewed are highlighted below: Creating awareness of its services among the target group

On average, the Board Members provided an average rating of 3.9 while WD and WEI staff

provided an average rating of 4.6 regarding success achieved in creating awareness. The WEI organizations have continued to make progress over the past five years in terms of creating awareness of services and raising the visibility of the organization through promoting and upgrading their websites, developing extensive communication lists, attending or hosting events, advertising, and building a strong referral network. Indicators of rising awareness include increases in the number of website hits and telephone inquiries as well as the number of clients served and requests for speaking engagements. Some regions, particularly BC, Alberta and Saskatchewan, are specifically targeting certain groups such as Aboriginal, immigrant and young women who have been underrepresented as clients.

Other research indicates that awareness differs somewhat across the provinces. A recent 2008

survey commissioned by WEC-BC found that 10% of the general public and 25% of women entrepreneurs were aware of the Women’s Enterprise Centre (BC). Nearly four in ten of the women entrepreneurs who were aware of the WEC-BC reported that they have used the services of the organization. On the other hand, a 2008 survey8 commissioned by Women’s Enterprise Centre of Manitoba found that 28% of the general public, 34% of women province wide, and 43% of women in Winnipeg were aware of MWEC.

Serving women entrepreneurs from across the province

Board Members provided an average rating of 3.6 while WD and WEI staff provided an average

rating of 4.0 regarding the success achieved in serving clients from across the province. The ability of WEI to serve clients from across the provinces has improved significantly in recent years. Regional delivery of services is facilitated by:

Responding to inquiries and delivering services by telephone and e-mail. The advisors said

that much of the counselling/advising can be done over the phone or through e-mail;

Collaborating with organizations across the province;

8

Women’s Enterprise Centre of Manitoba: Awareness and Appeal, Probe Research, March 2008




Having satellite offices;

Staff who travel outside of the office to various parts of the province;

Videoconferencing with clients in rural areas (often using the videoconference capabilities of

Community Futures);

Staging seminars, workshops, mentoring circles (which bring together rural women to network and support each other) and meetings in various regions, often in partnership with local or province-wide organizations;

Distributing materials through the website; and

Distributing newsletters.

While some representatives felt that there is room for improvement, particularly with respect to

reaching out into smaller communities, most representatives felt that the organizations have been very effective given the resources available.

Meeting the needs of its clients


rating of 4.2 regarding the success in meeting the needs of clients. Through the interviews and focus groups, clients generally reported a high level of client satisfaction. Critical to the success of the program is the ability of staff, particularly business advisors, to identify needs and to have the tools or resources needed to meet those needs. Staff commented on the positive feedback that they received and the long-term relationships which are established. It is becoming more common for women to obtain assistance in starting a business and then return a few years later for assistance in expanding the business. Staff acknowledged that they cannot always meet the needs of clients; for example, clients may simply not meet the criteria to obtain a loan.

Providing an appropriate balance of pre-care, capital, and aftercare services


rating of 4.2 with respect to delivering an appropriate balance of pre-care, capital, and aftercare services. Staff often work extensively with clients during the process of business planning and preparing loan applications. Some representatives suggested that, if additional resources were available, they would like more of an emphasis to be placed on aftercare to facilitate long-term relationships with clients and likely reduce the potential for write-offs in the loan portfolio. At the present time, aftercare typically involves a review of submitted financial statements and occasional site visits. Staff suggested increasing access to more advanced courses and individual services specifically relevant to women entrepreneurs who have been in business for a while. Staff in each of the provinces indicated that there has been an increase in the number of expansion loans made and suggested that this trend should continue.

6. Budget limitations were identified as the primary factor constraining the impacts generated

by the program.

The budget for the program has not increased in recent years. In fact, expenditures for some of the WEI organizations have actually declined in recent years; the terms of previous agreements with




WD had allowed unused budgets to be carried forward which means that annual expenditures increased in the later years. Budget issues: Limit the level of services that can be delivered (the organizations are continually expected

to do more with a budget that is declining in real terms);

Limit the ability of the organizations to market themselves and reach segments which they consider to be underserved (e.g. Aboriginal, immigrant, younger and older women as well as smaller communities); and

Contribute (or are anticipated to contribute over the next few years) to turnover in staff

members who are able to move to higher paying positions with other organizations. Concerns about staff turnover are particularly high in Alberta and BC, where the job market is very competitive and the cost of living can be high. Staff turnover was one of the most common concerns about the program identified by clients.

The maximum size of loans that can be provided was also identified as a constraint. The maximum level has not been increased since the program was established. Some felt that the current maximum of $100,000 constrains the ability of the WEI to loan money to businesses in industries that require considerable capital compared to smaller retail or hospitality businesses. Women-owned manufacturing and mining companies were given as examples. At times, WEI has been able to work around this constraint by brokering larger deals where they partner with banks and other lending institutions. However, this is not always possible and it can pose difficulties for clients who have to deal with several different institutions.

7. Various suggestions were received from each of the groups interviewed regarding how WEI

could be improved.

While many of these initiatives are planned or already underway, the suggestions for improvement which were received from clients include: Work to improve the current services, workshops, seminars and business consulting services

that are offered (identified by 58 respondents). It was suggested that offering more options in terms of times and dates would increase participation. Clients noted that services are typically offered during business hours which can make it difficult for them to attend and add to the cost. Clients also suggested that there should be more opportunities for networking, mentoring, free consulting, and more one-on-one counselling;

Clients felt that the loan application process could be improved. Suggestions focused on

reducing the administrative burden associated with loan applications, streamlining the process and waiting times, increasing the overall size of loans, reducing fees and interest rates, and supplying clients with additional information on other funding sources (36 respondents);

Focus on staffing issues. Some clients commented on turnover among staff, situations where

staff were considered unfriendly, and inconsistency of the necessary skills, knowledge and/or experience of staff (26 respondents);

Increase access to workshops, seminars and staff support in rural areas (14 respondents); Raise the profile of the program by creating more awareness of the services offered




(identified by 12 respondents); Create a database of reputable businesses which clients can use to access essential services

and as a networking tool (5 respondents); and Offer specialized services to Aboriginal and immigrant women (3 respondents).

Recommendations for improvement from stakeholders include:

Increase funding to build more resources, expand services to the rural communities, and

ensure that programs are sustainable; Raise the profile and awareness of the program by increasing the marketing budget,

promoting the program in the business community, and generating broader program visibility; Increase the use of technology to expand program capacity and functioning as well as ensure

that services are reaching rural areas; Develop a better understanding of cultural diversity and the needs of immigrant and

Aboriginal clients; and Improve the services offered by staff and reduce the level of turnover.

Recommendations for improvement from Board Members include:

Increase funding so that the program can increase the size of loans, expand its services, and

provide greater stability in programming; Enhance the accessibility of its services across all communities in the province and reach out

to women in rural areas; Foster and strengthen partnerships with other business organizations in the province and with

the WEI offices in other provinces; Increase the number of staff; Continue to meet needs of clients over time with an increasing focus on aftercare services

including follow-up; and Increase awareness by expanding promotion and marketing, holding more events, and

reaching out to high school students who may be potential clients.

The most common recommendations for improvement suggested by staff include:

Continue to upgrade and expand the capabilities of the website (opportunities for women entrepreneurs to promote their business and interact with each other) and ensure that the content remains up-to-date;

Stage more networking events that bring women together in an informal setting. Talks,

discussion groups and receptions were mentioned as potential networking events;




Increase the level of interaction across the provinces. Currently, there are conferences and meetings for staff to get together but more opportunities to share experiences and work toward common goals would be beneficial;

Increase availability of aftercare services. This is an area identified by all provinces as being

overlooked. It was suggested that provinces should continue to develop and implement aftercare strategies to identify businesses at risk and work with those in a position to expand; and

Expand training services to ensure that women have the skills not only to start businesses,

but also to expand their business (such as advanced marketing and accounting programs).


DIFFERENCES ACROSS PROVINCES


IV. Differences Across Provinces To develop a deeper understanding of the survey results, we cross-tabulated client responses by the four provinces in terms of characteristics of clients, characteristics of the services received, and characteristics of the businesses. It is to note that the figures are calculated based on our survey results; conclusions drawn based on the smaller sample sizes of each province have limitations and may not represent the general population. The results are presented in the following pages.

A. Characteristics of the clients Some of the key trends in the characteristics of clients observed from the cross-tabulation include: The age and level of experience of clients in business management did not vary significantly across

province. Clients in British Columbia are more likely to report a college diploma as their highest level of

education whereas university degree or post-graduate degrees were more commonly reported in other provinces. BC clients are those most likely to report a business related diploma or degree.

While clients in BC and Alberta commonly found out about WEI through Internet, clients in

Saskatchewan and Manitoba were more likely to become aware of the organization through word-of- mouth and advertisements or stories.

Characteristics of the clients

Characteristics BC AB SK MB OVERALL

Number

Number of Clients Surveyed 88 109 129 118 444

Age

Younger than 24 years 2% 1% - 4% 2%

25 to 34 years 26% 20% 20% 18% 21%

35 to 44 years 36% 35% 26% 30% 31%

45 to 54 years 28% 29% 40% 34% 33%

55 to 64 years 9% 14% 13% 14% 12%

65 years or older - 1% 1% 1% 1%

Total 100% 100% 100% 100% 100%

Highest Level of Education

Less than Grade 12 2% 1% 2% 2% 2%

Grade 12 12% 7% 17% 8% 11% College or diploma program (2 years

or less) 47% 39% 33% 32% 37%

University degree 39% 53% 47% 59% 50%

Don’t know or no response - - 1% - 0%

Total 100% 100% 100% 100% 100%

Diploma or Degree Related to Business Management

Yes 36% 32% 24% 28% 30%





Years of Experience in Business Management

None 14% 9% 10% 19% 13%

Less than 2 years 10% 13% 14% 15% 13%

2 to 5 years 24% 24% 23% 25% 24%

6 to 10 years 20% 21% 24% 19% 21%

11 to 15 years 12% 13% 9% 9% 10%

Over 15 years 15% 20% 18% 15% 17%

Other 2% 1% - - 1%

Don’t know or no response 4% - 2% - 1%

Total 100% 100% 100% 100% 100%

How Client Found out about WEI

Word-of-mouth 16% 19% 32% 28% 25%

Referred by another organization 26% 20% 12% 20% 19%

Internet 25% 23% 5% 12% 15%

Advertisement or story 6% 7% 18% 14% 12%

Pamphlet/brochure 6% 6% 9% 9% 7%

Referred by government 11% 8% 4% 9% 8%

Other 3% 9% 5% 7% 6%

Tradeshow 2% 2% 3% 2% 2%

B. Characteristics of the services received Some of the key trends observed in the characteristics of services received include: Clients in Saskatchewan and Manitoba are more likely to have participated in a training program or

seminar. None of the clients in Manitoba reported participating in a mentoring program. Clients who responded from Manitoba are the least likely to have received a loan.

On average, loan clients made more contacts with the WEI organization than non-loan clients did

except in Saskatchewan, where non-loan clients on average made more contacts with the organization (which is likely due to its membership structure).

Non-loan clients in Alberta tended to be somewhat less satisfied with WEI services and less likely to

believe that assistance played an important role in the development of their business. Clients from all regions saw a strong need for the program. Loans tend to account for a higher percentage of the total investment made by businesses in

Saskatchewan and Manitoba (i.e., be less leveraged). Clients in Manitoba were more likely to report that the services increased their access to other

programs, services, and training sessions, and encouraged them to start up operations.




Characteristics of the services received


Number

Number of Clients Surveyed 88 109 129 118 444

Type of Clients

Non-loan 56% 52% 54% 79% 61%

Loan 44% 48% 46% 21% 39%

Percentage Receiving Services

Business Counselling 47% 38% 47% 52% 46%

Business Plan Development 24% 31% 41% 33% 33%

Training Programs 44% 48% 60% 66% 55%

Mentoring Program 13% 9% 23% 0% 12%

Pathfinding to identify other resources 14% 11% 11% 19% 14%

Average Number of Contacts over the Past 5 Years

Non-loan 7.1 4.1 18.5 4.2 8.4

Loan 14.9 12.4 13.7 17.0 14.1

Average Ratings on Importance of the Various Types of Assistance Provided by WEI

Non-Loan 3.7 2.4 3.4 4.2 3.4

Loan 4.6 4.3 4.7 5.0 4.6

Average Ratings on Satisfaction with WEI Assistance

Non-loan 4.0 3.0 4.0 4.2 3.9

Loan 4.8 4.1 4.6 4.5 4.5

Average Ratings on the Perceived Need for the Program

Non-loan 4.8 4.4 4.7 4.8 4.7

Loan 4.9 4.7 4.8 5.0 4.8

Likelihood of Developing Business to this Extent Without WEI Assistance

Non-loan 78% 84% 79% 77% 80%

Loan 32% 39% 34% 28% 34%

LOAN CLIENTS

Loan Profile

Average Loan Amount $45,504 $36,176 $45,455 $41,294 $42,318 Average Loan as Percentage of Capital Investment

28% 21% 45% 39% 31%

Role of the Loan

Start up Operation 45% 49% 63% 74% 57%

Expand Production 41% 27% 31% 53% 35%

Cover Working Capital 28% 22% 14% 21% 20%

Fund Market Development 17% 15% 0% 5% 9%

Fund New Product Development 14% 0% 0% 16% 5%

Other 28% 29% 12% 11% 20%

Likelihood of Getting Loan from other Sources

Percentage of Likelihood 32% 41% 32% 27% 34%





IMPACT RATINGS REGARDING THE SERVICES

Average Rating (Where 1 is no impact at all and 5 is a major impact) for Non-Loan / Loan Clients

Business Skills Development 3.3 / 2.9 2.7 / 2.5 3.5 / 2.8 3.4 / 3.2 3.2 / 2.8

Access to other Programs/ Services 3.1 / 2.9 2.5 / 2.5 3.3 / 2.9 3.3 / 3.8 3.1 / 2.9

Network with Other Entrepreneurs 2.9 / 2.9 2.5 / 2.5 3.7 / 3.2 3.1 / 3.4 3.1 / 3.0

Access to Information 3.3 / 2.9 2.4 / 2.4 3.0 / 2.8 3.4 / 2.8 3.1 / 2.7

Encouragement to Start up 2.5 / 2.2 2.2 / 2.1 2.8 / 3.3 3.0 / 3.5 2.7 / 2.7

Access to other Funding Sources 1.8 / 2.0 1.8 / 1.8 1.6 / 2.1 2.0 / 3.0 1.8 / 2.1

C. Characteristics of the businesses Some of the key trends with respect to the characteristics of the businesses include: Retail businesses are more common in British Columbia and Saskatchewan. The professional

services sector was commonly identified in Manitoba. The number of years in operation did not vary significantly by province. On average, businesses in Manitoba had more employees than businesses in other provinces

because of the presence of a few larger companies in our survey. Average revenues for the current fiscal year were higher for businesses in British Columbia as were

the average wages paid per employee. Companies in British Columbia were also those most likely to report export sales.

The projected revenues for the current year, the revenues for the previous year, and the average

revenue per dollar invested appear to be higher in Saskatchewan (this is somewhat skewed due to two large Saskatchewan organizations generated significant revenues).

Characteristics of the businesses


Number of Businesses Surveyed

Number of Active Businesses 67 74 98 70 309

Current Status of the Business

Planning stage 16% 17% 12% 28% 18%

Planned but will not proceed 3% 3% 4% 7% 4%

Currently operating 76% 68% 75% 59% 70%

Temporarily stopped operations 0% 2% 2% 2% 1%

Permanently stopped operations 0% 5% 2% 1% 2%

Other 3% 8% 5% 5% 6%

Total 100% 100% 100% 100% 100%

Sector

Manufacturing 12% 5% 2% 7% 6%

Retail 31% 13% 26% 17% 22%

Wholesale 8% 3% 1% 1% 3%





Primary production 1% - 1% - 1%

Construction 1% 2% 1% 2% 2%

Real estate or insurance 3% - - 1% 1%

Accommodation, food and beverage 5% 4% 7% 7% 6%

Professional services 21% 39% 40% 57% 40%

Other 17% 33% 23% 6% 21%

Total 100% 100% 100% 100% 100%

Years in Operation

Less than 1 year 16% 12% 9% 24% 15%

1 to 4 years 48% 36% 44% 34% 41%

5 to 9 years 16% 38% 35% 23% 29%

10 to 19 years 13% 11% 8% 11% 11%

20 years or more 6% 3% 4% 7% 5%

Total 100% 100% 100% 100% 100%

Average 6.3 years 5.5 years 5.8 years 5.7 years 5.8 years

People Currently Employed in Organization

1 to 4 72% 71% 70% 71% 71%

5 to 9 19% 16% 18% 8% 16%

10 to 19 6% 11% 11% 18% 11%

20 or greater 2% 2% 1% 3% 2%

Total 100% 100% 100% 100% 100%

Average 4.3 staff 4.1 staff 4.1 staff 6.4 staff 4.5 staff

Average Estimated Revenues for the Current Fiscal Year

$0 to $25,000 18% 10% 18% 22% 17%

$25,001 to $50,000 7% 15% 15% 14% 13%

$50,001 to $100,000 16% 18% 21% 26% 20%

$100,001 to $250,000 15% 24% 13% 8% 15%

$250,001 to $500,000 22% 21% 12% 12% 16%

Greater than $500,00 22% 13% 20% 18% 18%

Total 100% 100% 100% 100% 100%

Average $464,096 $318,965 $343,551 $316,843 $389,076

Comparison to Previous Years

Projected Revenues for the Current Year (excluding new business with no previous comparables)

$379,051 $343,610 $498,468 $409,592 $416,460

Previous Year Revenues $323,801 $291,103 $441,607 $378,596 $365,475

Average Increase in Revenues 17% 18% 13% 8% 14%

Revenues and Wages Per Employee

Number of Employees 4.3 4.1 4.1 6.4 4.5

Average Revenues Per Employee $107,929 $77,796 $83,793 $49,507 $86,461

Average Wages Per Employee $23,311 $21,880 $20,887 $18,589 $21,360

Export Sales

Percentage of Companies Reporting Export Sales

27% 18% 14% 24% 20%

Export Revenues as a Per Cent of Total Revenues

9% 5% 5% 2% 5%

Investment





Average Investment Per Business $182,726 $155,680 $105,368 $87,949 $139,822

Average Revenue Per Dollar Invested $1.59 $1.96 $3.95 $2.59 2.49

FERENCE WEICKER & COMPANY Impact Assessment of the … · WEI organizations from 2003 to 2008;...

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