Encouraging immigrant entrepreneurship is a strategy for economic growth in Canada. Immigrants are more likely than a Canadian-born person to start a new business and these new businesses provide jobs to local residents, generate tax revenue, and increase economic activity. However, not all new businesses succeed. How do we increase the chance of success of the immigrant entrepreneur? The answer lies in more dedicated support programs for immigrant entrepreneurs, programs that focus on the knowledge needed within in specific sectors, mentoring, and more grants and smaller loans.
Immigrant entrepreneur Gerard Keledjian, Managing Director of New Horizons Media Inc. knows first-hand the challenges of being an immigrant entrepreneur. He has been running his business part-time since 2012 and full-time since 2016. It took time to build his business. He speaks of how when you first start no one gives you work so you have to build up your network.
Gerard immigrated to Canada in 2010. Having been in Canada for under 10 years, according to a definition used by Statscan in a 2018 study, he would be considered a ‘recent immigrant’. While immigrant owned businesses overall have similar survival rates to Canadian-born businesses, the study found that businesses owned by recent immigrants faired more poorly. Fifty-one percent of businesses started by recent immigrant entrepreneurs, remained in business for at least 7 years, versus 57% of those started by longer-term immigrants, and 58% of those started by Canadian-born entrepreneurs.
While business survival times are affected by immigrant characteristics such as age, place of origin, and industry, this Statscan research suggests that the unique challenges faced by an immigrant entrepreneur are more easily overcome after having lived in Canada longer, possibly due to having acquired more knowledge and skills related to running a business in Canada.
Gerard talks about the challenges obtaining financing. He points out that a new immigrant entrepreneur would have no personal or business credit history in Canada making it difficult for them to obtain a loan.
He further explains how the funding applications can be overwhelming and complicated, “due to unfamiliarity with the application process, and sometimes unclear requirements.” Some of the loans may be quite high for a business that is just starting out and many small businesses might be nervous to apply for a high loan that they will eventually have to pay back.
According to Rania Younes, Co-founder and Director of Welcome Home TO, one of the biggest challenges is gaining the Canadian business and regulatory knowledge, such as an understanding of the Employment Standards Act (ESA). She suggests that programs like Scale without Borders are key to paving a better path for immigrant entrepreneurial success. It offers industry specific knowledge and support through focusing on the tech entrepreneur and covers financing, legal issues, and offers peer-to-peer support and networking opportunities.
According to the Conference Board of Canada, there are few dedicated programs in Ontario for the newcomer entrepreneur despite the fact that it is the leading Canadian destination for immigrants. More programs like ACCES Employment’s Entrepreneurship Connections® should be considered at immigrant-serving agencies. Futurepreneur Canada’s initiative for newcomer entrepreneurs is also helpful. Both of these have a mentoring component.
To address the financial challenges, Gerard suggests, “Governments and entrepreneurship organizations that are mandated to help new entrepreneurs start and grow businesses could make a big impact by simplifying the application process and walking with new immigrant entrepreneurs through the process to make sure they fully understand and can easily complete all the requirements.”
He suggests that more grants or smaller loans be available to new businesses, so that immigrant entrepreneurs can build their confidence and then apply for further funding when they need it.
Finally, Gerard Keledjian currently works with someone who helps him identify which funding applications to prioritize. This process of “mentoring” has made the process of applying for funding easier for him. Mentoring would likely be beneficial to other immigrant entrepreneurs.
With these solutions in place, the pathway for many immigrant entrepreneurs could become a highway to success leading to thriving businesses that support and grow the local economy.
About the author: Rebecca Phinnemore is a former employer and stakeholder relations manager at TRIEC. You can find out more about Rebecca here.