Growing your business takes a significant investment of time and capital. QuickBooks Canada’s latest study shows that Canadian entrepreneurs are struggling to access the latter, nearly half (44 per cent) of Canadian entrepreneurs have faced rejection from an investor.
Getting funded is a crucial step in scaling up and with half of all new businesses in Canada failing before their fifth year, it’s crucial that we equip small business owners with the education and resources they need to secure funding and achieve growth and long-term success.
Why are so many entrepreneurs struggling to secure the funding they need? QuickBooks Canada’s newest study shows that Canadian entrepreneurs are approaching an investment pitch without a clear picture of where they stand, and hurting their chances as a result – an astonishing 68 per cent do not plan to create a cash flow statement for their pitch. It’s no wonder investors are passing on entrepreneurs that lack basic information about their business performance.
To help entrepreneurs with vital skills like managing cash flow, and continue its long-standing commitment to improving Canadian small business owners’ financial literacy, QuickBooks Canada has announced “Startup Foundations,” a national initiative in collaboration with Startup Canada, SociaLIGHT, Launch Academy, Notman House and Ryerson University’s DMZ to help educate, train and enable up to 10,000 startups to improve their financial management skills, make better decisions and ultimately fuel business success.
Entrepreneurs are missing the financial picture:
- Shockingly, one in 10 entrepreneurs currently seeking investment don’t plan to prepare anything for their investment pitch.
- Thirty-five per cent do not plan to prepare a business plan.
- Forty-nine per cent do not plan to produce an income statement.
- Sixty-eight per cent do not plan to create a cash flow statement.
- Many Canadian entrepreneurs entered an investment pitch with no balance sheet (38 per cent) or business plan (23 per cent).
Underprepared equals underfunded:
- Entrepreneurs face rejection by pitching without a long-term strategy. The primary reason those rejected for funding didn’t receive the investment they hoped for was because they didn’t have a plan to profitability.
- Canadian entrepreneurs aren’t just quick to jump the gun when it comes to funding – A previous QuickBooks Canada study showed that 69 per cent launched their business within six months and 62 per cent started up without a business plan.
- Sixty-one per cent of entrepreneurs spent less than 12 hours preparing for their pitch. That’s less time spent than planning a vacation.
Barriers to securing funding in Canada:
- Entrepreneurs are facing gaps in knowledge when looking to pitch their business, with 67 per cent unsure of exactly what investors are looking for.
- A survey of residents of Canada’s top startup cities (Toronto, Kitchener-Waterloo, Montreal, Calgary, and Vancouver) found that 70 per cent of those who considered starting up in the past year feel lack of capital is a key barrier to launching a new business in Canada.
Invest your time now and build your financial foundation for success. Learn more at quickbooks.intuit.ca/startup.