What Would Do With $5,000?
For $5,000, you could spend two nights in a luxury Caribbean resort. Or buy 16 kegs of really good beer. Or maybe invest in a few shares of high-tech stock.
Or, if you’re a Canadian entrepreneur, you could start your own business.
That’s the key conclusion from Intuit’s new study The $5000 Question, released today. The study found that the majority (58%) of Canada’s small business owners start with less than $5,000. For one-person shops, that number’s even higher: 77% reported starting with less than $5,000.
$5,000 is actually incredibly empowering: it makes clear that money isn’t a barrier to getting a small business up and running. It’s also a warning: the margin of failure is small and the risks are real. In fact, half of small business owners surveyed reported taking a big risk to get started, whether that meant taking out a line of credit, draining their savings account, or maxing out their credit card.
These risks don’t always pay off. Statistics Canada data shows that only about half of small businesses survive to year five. That’s not something we here at Intuit Canada find easy to accept. We deliver solutions that make it possible for small business to succeed. That’s why we designed this study: to get vital insights to help small businesses survive and thrive beyond year five.
We found that one in three small business owners underestimated how much time they’d need to spend managing their money: that can make the uphill climb of getting a business running even tougher. We also found that the small business owners’ number one regret was not spending more time learning financial management early on. In fact, that was their number one regret, ranking higher than:
- Finding a mentor
- Creating a business plan
- Seeking professional advice earlier
We also uncovered the big “why:” why are so many small businesses absorbed by the demands of financial management? The answer is that too many of them rely on outdated tools to get the job done. In fact, 57% of small business owners continue to use pen and paper for vital tasks such as cash flow, payroll, and taxes. That’s not just inefficient, but can lead to costly mistakes these owners can’t afford.
A tool like QuickBooks, which gives small business owners a better handle on their finances, is one simple and easy way to help ensure businesses succeed.
– Don’t forget to download the report!