I was recently in Ottawa at the Startup Canada Communities Summit where we were immersed in all things Entrepreneurship for a full week. The federal government is very focused on accelerating the development of growth stage companies and identifying those with growth potential. Strategies and support for global market entry was a recurring topic (understandably, with our country lagging behind in export market penetration.)
While that may be a national priority, our local and regional priorities are quite different. A mentor of mine from Saskatchewan made a comment that really struck me; she said every rural community is dealing with its own economic trauma. She was right. Whether it’s the loss of a major employer, or the loss of the only bank or grocery store in town or a school closure — unemployment, out-migration, and increased levels of poverty soon follow. Many of our communities feel like they are perpetually stuck working at the bottom of Maslow’s Hierarchy of Needs.
This brings me back to the theme of the Startup Canada Summit — Entrepreneurship. Entrepreneurship has always been an economic driver in rural communities and can pull us out of the lower levels of the pyramid; but the way in which we identify and support entrepreneurs has to be examined. Not all entrepreneurs are the same. In fact, I would argue that there are far more differences than similarities. If we are going to truly activate the potential of entrepreneurship as a community elevation tool we need to acknowledge and support entrepreneurs differently. There is no “one size fits all” program that will work.
The Entrepreneurial Landscape:
Growth Oriented Entrepreneur
These are the people that we typically think of when we hear the word “entrepreneur.” They are driven to bring a new product or service to market and are interested in growing and expanding their business (hiring and increasing their market share.) They are typically comfortable with risk and are highly innovative. They are adept at learning from mistakes and iterating.
Support Needed: 1. investment funds 2. programs to accelerate growth.
As the name infers, these people are individuals who have created a business that supports their chosen lifestyle. They are independent, creative, and do their work on their own terms. They are not slaves to their business — instead they dictate where, when and how they do their work. They will partner on projects but typically don’t hire employees. Depending on their skill-set and offering they can live lavishly or minimally. Millennials are considered the ultimate lifestyle entrepreneurs and are defining work for themselves.
Support Needed: 1. networking and connecting opportunities 2. co-working options. 3. internet access
These are the people who are trying to do well by doing good. Their focus is on solving a problem in the community or world and supporting it with their business services and/or profits. They see entrepreneurship as a tool that can be used to make the world a better place. The social enterprise is a new and evolving entity that is worth investing in, particularly in rural communities. It’s essentially a hybrid combining not-for-profit mandates with for-profit sustainability.
Support Needed: 1. education and promotion 2. community partnerships 3. seed funding
Side Hustle Entrepreneur
These people are typically employed but have added a second or third income stream to their work. They are also referred to as the 5 to 9ers because they work on their side business in the evenings and on weekends. They hope to have enough success that it eventually replaces their full–time day job. They are slightly less risk tolerant than growth oriented entrepreneurs in that they want to keep the security of a consistent income while they build their business. Most of the time, the side hustle never turns into a replacement income but adds considerably to their overall income, allowing them to contribute more to the local economy.
Support Needed: 1. tools that assist with efficiency and time management 2. online training
In rural communities, particularly tourism focused communities, seasonal businesses play an essential role. Seasonal entrepreneurs are typically skilled and passionate about what they are doing. Their greatest challenge is dealing with the income disparity that occurs in their off season.
Support Needed: 1. budgeting and financial planning specifically for seasonal businesses 2. financial investment to maximize seasonal opportunity
These are people who are creating new income streams and innovations from within the business in which they are employed. This kind of entrepreneurship is critical for globally competitive and sustainable corporations. Entrepreneurial thinkers and employees with entrepreneurial ambition contribute to the growth and continued success of the business that employs them. Companies like Google encourage and even formalize the process of contribution by employees in order to stay competitive.
Support Needed: 1. training and programs to help Established Businesses incentivize and reward intrapreneurs
In the absence or loss of employment this group uses business development as a means to earn an income. They would prefer to work as an employee but take up entrepreneurship in order to pay the bills. For the most part they aren’t interested in growing or scaling their business, or employing people. They are typically not big risk takers and are unlikely to build businesses that grow and scale. The majority will build temporary solutions until they can find permanent employment.
A number of programs have been developed to assist unemployed people with starting businesses. As a route to self-employment there is value in programs like these as primary income loss in a household can devastate entire families. Providing the same supports and expecting the same result from a necessity entrepreneur as from a growth oriented entrepreneur however, is misguided and disadvantages both groups. Given that half of all businesses fail before they reach their fifth year, would it be surprising to know that Founder Departure is one of the top reasons for failures? A closer look at the data may very well show that it’s necessity entrepreneurs leaving the business in the first couple of years for a job that is the cause of many of the exits.
Support Needed: 1. Business development as a strategy for dealing with job loss should be invested in as a short-term solution with realistic goal setting. 2. Data collection on business outcomes over time is needed to better support this group of entrepreneurs.
Understanding what the entrepreneurial landscape looks like in your community and where you’d like to take it is an important first step in building support programs. Is your community heavily seasonal? Are you addressing the unique needs of these entrepreneurs? Have you recently lost a major employer, creating a pool of necessity entrepreneurs trying to earn their own income? How can you support them with business planning designed to replace their income, while supporting those who want to grow and scale differently? Do you have an emerging pool of millennials working for themselves in order to support their chosen lifestyle? How can you encourage and keep them with co-working spaces and social networking events.
Everyone would benefit from honing their entrepreneurial skills, as our labour market is changing rapidly, and fluid movement from one income generating activity to another is becoming more of the norm than the exception. Self-sufficiency through entrepreneurship is a life skill that can serve to support a community through periods of economic trauma as well as times of growth and prosperity.
How does your community support entrepreneurs?