Closing the Financial Literacy Gap in Canada

by Robert Decher

2 min read

 

What comes to mind when you think about a startup? Most people associate startups with few resources, big challenges and a shoestring budget, if any budget at all. However let’s avoid another post about the success and failure of entrepreneurship and instead discuss financial solutions for early-stage small businesses.

Many entrepreneurs’ first source of capital comes from personal sources of money, small business loans, credit cards or even funding from friends and family. When times are tight, sound financial management is all the more important. In November 2014, Intuit Canada and Vision Critical surveyed 638 small business owners to gauge the financial literacy skills of Canadian entrepreneurs. This Financial Literacy Quiz was a followup to a similar scan conducted by Intuit in 2012. Although there were marked improvements compared to the results from the same quiz in 2012, a deep financial literacy gap still exists among Canadian entrepreneurs. For example, 39% of small business owners received a failing grade (answering 0-4 questions correctly out of 10) while just 7% answered 9 or 10 questions correctly out of 10.

Whether you like it or not, financial management and reporting is an important aspect of your business. So, while you may have staff to input invoices, pay bills and balance your statements, you do need to review them and have a strong understanding of how your business is performing and the state of your business’ finances.

Recognizing the financial literacy gap for entrepreneurs in Canada, Intuit Canada has partnered with Startup Canada, the Chartered Professional Accountants of Canada as well as local private, public and non-profit finance partners to develop and implement a National Startup Finance Initiative. This collaborative project is providing 2,500 entrepreneurs in 25 communities across Canada with the training, tools and access to trusted advisors to build more financially robust, sustainable and scalable startups. Activities include Startup Finance Bootcamps, Startup Finance Meetups and QuickBooks Crash Courses.

“Intuit has a longstanding commitment to helping entrepreneurs achieve financial independence and success,” said Jeff Cates, President of Intuit Canada. “This partnership allows us to reach entrepreneurs where it makes an impact – in the local communities they call home. Our goal is to ensure they scale-up with financial health.”

The program has already been recognized as a best practice in entrepreneur training by the Honourable Kevin Sorensen, Minister of State (Finance), Canada’s Financial Literacy Leader Jane Rooney, the Organization for Economic Co-operation and Development (OECD) and the International Economic Forum of the Americas due to its grassroots implementation through Startup Communities across Canada.

“Small business success and failure hinges on an entrepreneur’s ability to make sound financial decisions,” said Victoria Lennox, CEO and Co-Founder of Startup Canada. “This new, nation-wide program will give Startup Canada Communities and similar enterprise support hubs the necessary resources to ensure entrepreneurs have local access to key financial literacy needs.”

Since launching in April 2015, the Startup Finance Initiative has already impacted thousands of Canadian entrepreneurs from Halifax to Whitehorse and has provided critical connections, education, tools and solutions to thousands of entrepreneurs across all sectors. Participants also receive the opportunity to consider various funding opportunities from angel investors and government services, as well as explore programs for hiring talent, support for exporting, advice in sales and marketing, all while establishing meaningful relationships with experts in the financial industry. The Startup Finance Initiative will wrap up in September 2015.

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