This week’s posting is a Special Report on the Feb 19th 2019 Podcast of CFCR’s “Civically Speaking”
Last week, on Lenore Swystun’s highly thoughtful and eclectic public radio program, “Civically Speaking” (CFCR 90.5 FM), entrepreneurial leaders Monica Kreuger (founder of Global Infobrokers and CVO of the Praxis School of Entrepreneurship), Sara Wheelwright (Founder and Owner of S&E Trusted Online Directories, and Trusted Marketing Services) and Mark Zielke (Team Lead of StartFreshMedia.com, President of KwickAutoRepair.ca and People’s Advocate) participated in a “state of the union” style discussion on the shape of small business in Saskatchewan.
I urge all Saskatchewanians to listen to this podcast, whether you’re entrepreneurs or not. Visit the podcast posted on Facebook: https://bit.ly/2VhPXHs This week’s blog posting summarizes the highlights.
Since 1990, Monica Kreuger and her team’s Praxis School of Entrepreneurship (full disclosure: I will graduate from it in April) has trained about 900 new and diverse entrepreneurs. But it has not seen a change in the types of small businesses that entrepreneurs offer. Instead, as Kreuger stated at the outset, the changes that have occurred during the past five to 10 years among proteges of the program have been due to gender and cultural diversity: Praxis has seen increasing participation from women, Indigenous people and from international newcomers or new immigrants. These are all good developments.
Kreuger, Wheelwright and Zielke agreed, furthermore, that there are always challenges to stay in business and to keep a business growing—we have to keep innovating and reinvent, or we won’t be able to keep operating our businesses. Entrepreneurs must be nimble.
Sara Wheelwright observed that her marketing services support local business owners, from “Ag to tech to local plumbers, roofers, lawyers, realtors, mortgage brokers,” many of whom currently are “doing well . . . [But] the key is innovation.” Standing still is not an option.
Mark Zielke sees less optimism among small business owners whom he meets in the province. He cites that one property developer in construction in the city has laid off half his staff in the past six to 8 months. Zielke asserts that “the status quo isn’t working and . . . there are a lot of businesses that aren’t able to adapt.”
“This is the new norm, he says. It’s not going to pass. “What are you going to do to adapt and to break in and get people into your [small] business?” People on the street whom Zielke talks with are not optimistic, either.
Kreuger agrees that present economic challenges are the “new norm,” but that to adapt, we need to look at “new business models. What we’re looking and seeing now and stats show it that . . . there is continuing growth in small businesses and entrepreneurship, but in certain age categories” such as “the 55-64 year range [who are] stepping out of traditional business . . . taking their expertise and starting their own companies. But where I see us having to reinvent how we operate as businesses is starting to collaborate in smaller groups—how do we help each other succeed?” Praxis’ entrepreneurial training schools do this. Sara Wheelwright’s intensive marketing services do this and Lenore’s consulting and broadcasting work do this. How do we come together, to “lift each other up,” and “collaborate, cross-market?” This is about more than just keeping one’s business going. “It’s about helping each other to grow,” more broadly.
These are questions with deep implications for our province’s communities, as a whole.
What do the community and our governments need to do to be visible and to encourage innovation? What climate do we need to build, to support small business?
Wheelwright says that Saskatoon’s municipal government does not currently support small business. The City is not visible (whereas not-for-profit supports like WESK, the Saskatoon Chamber and the NSBA are). The downtown is not vibrant during daylight hours. Many storefronts have closed: the City needs to become involved. Downtown vibrancy will drive business growth, she says. How can we afford to build new bridges and host new festivals unless there’s a vibrant downtown to support it all?
Zielke observes that business cannot be a silo, but should draw others to participate in it. Entrepreneurs are risking their mortgages, inheritances and many investments. He cites the recent report of the Saskatoon and Area Homebuilders’ Association as showing that less than half the number of annual building permits is being requested for Saskatoon. He says it’s a “litmus test” for what’s going on in Saskatoon’s economy.
Kreuger says that the “lens has not been placed” properly “by all [three] levels of government” on “the small business and entrepreneur.” There are plenty of policies and procedures and focus on support medium- to large-sized businesses, which are necessary. But she challenges governments to look at small businesses. When “87% of our businesses in Saskatchewan have fewer than five employees, including the solopreneurs, . . . we need a lens at the local, provincial and federal level[s], where we can address policies, from the perspective of the small business . . . Because we’re small, we don’t have a lot of time to go through all of the various procedures that larger companies have. And to do one policy to fit all . . . doesn’t work.”
On how to think about small biz policy, Wheelwright says the City and Province need to “cut the red tape,” so that small business owners can find the time to sit on boards and engage actively in the community—something almost none of them currently has the time to do.
Small business owners are the hardest working members of our community. We wear many hats, including developer, researcher, sales and marketer, service provider, communicator, bookkeeper and more. . . . We have little time to do deep dives into government policy or to lobby various levels of government to make much needed changes in policy. So small businesses struggle and, in some cases, flounder.
Wheelwright argues that we need an overhaul of the summer intern program, Edwards’ School of Business’ intern program, and to the grants that available to new entrepreneurs that small business owners don’t even know about. Small business owners are not reached and don’t know how to fill out grant applications or to spend “five, six or seven hours plus [written] business plans to get the financial assistance they need.”
Wheelwright says that internships should provide “hands-on” business experience, allowing small business owners to acquire “massive skills and experience” that they can use, as they build their businesses.
Small businesses underpin our community, but lack the “tons of resources” that large companies garner, to do all of the wonderful things that get celebrated in the media.
Kreuger cites as an example the Federal Government’s Temporary Foreign Worker Program (TFWP), as a rare program to focus its lens focused on small business. The TFWP allows companies with less than 10 employees to find policy that optimizes their use of the program. If that small business-friendly lens “was focused on every business policy out there, we would see much more engagement by [the] small business and entrepreneur[ial] community,” and we’d simultaneously be much more seen by the community. Community would see “we are a part of them.”
“Without a healthy and vibrant business community,” Kreuger says, “we have no community at all.”
She cites the example of a small town’s grocery store: When it closes, the community dies. That’s a business we need. Two or three people (or more) who lose their jobs, when a small business closes, add enormous burden to the community.
And at the end of the day in SK, “most businesses are small.”
And we must understand, Wheelwright adds, that “small business supports local.” And small business fuels crucial not-for-profit organizations. The public and government need to “get it.”
Kreuger translates the reality of small business under-representation and support in terms of the Gross Domestic Product (GDP) in SK. Each small biz contributes “$165K /year to the province’s GDP. If we help small businesses to grow one or two people more . . . [with lens on policy] we will make a huge difference on the GDP.”
To have one policy to fit all businesses doesn’t work.
Municipal, Provincial and Federal Governments need to move their “lens” to see and include small businesses in their policies. A “one size fits all” has dominated in SK through the 20th and 21st centuries, but simply “does not work,” Kreuger says. We are missing out on great opportunities for community enrichment and financial growth and development. For instance, innovative internships, collaborative working models (starting, for instance, with Saskatoon Makerspace) could offer vibrant growth.
It can be tough to acquire these skills of collaboration, she observes. But it’s very necessary. “What can we do together as a group?” It’s easier for young entrepreneurs, who are working in incubators and start-up groups, already. But we need more than that and we are not all tech start-ups.
While local entrepreneurs work unbelievably hard in SK, growth and change sometimes come more slowly in our province than in other regions of the country. How can we address this need for change?
Kreuger repeatedly cites the statistic from the Canadian Federation of Independent Businesses (CFIB) that “87% of all businesses in SK are made up of five or fewer people.” And yet government policy at all three levels does not enhance practices and policies that are needed for small business growth and development.
The “new norm” forces small business owners to make changes to our businesses and to seek new business models to succeed. We have to “reinvent how we operate,” Kreuger says. And we face the daily reality that the changes we know are needed to our business climate take time to happen.
A question we can and should ask is: “What can we entrepreneurs do together, as a group?” The model used by the Praxis School of Entrepreneurship that Kreuger founded is one of “entrepreneurs helping entrepreneurs.” Many collaborative ventures and partnerships could come from small businesses and even sole proprietors, but government policy is not encouraging such collaboration.
The age-old division between home/business no longer represents Saskatoon or SK. Instead, we should ask what entrepreneurial models and policies are best for the city and for businesses to grow and scale? Kreuger argues that we need to be clearer at the civic level about the management of small businesses.
For instance, one way to measure the undue burden on small businesses is property taxes. The media tends to discuss these as if there’s a competition between business and personal sectors.
Kreuger summarizes that when small businesses rent space from property owners, the cost of the taxes gets filtered into rent, making business unaffordable to the entrepreneur/small business owner, who then reverts to “home-based operations and reverse growth.”
As Wheelwright notes, small businesses pay all of their employees and only then take something home–if there is any profit left.
With such a small profit margin, many small businesses suffer isolation and struggle to find support amongst themselves.
Yet entrepreneurship shouldn’t be a solo activity. We all need to connect with networks. We need to reach out, talk and find people with like and diverse minds and find ways to work together, Kreuger challenges.
Can we give incentives to encourage small business activity that contributes to the GDP? Wheelwright cites the cost of parking in the downtown business district as debilitating, creating negative implications for community involvement, there.
The statistic Kreuger cites that “87%” of SK businesses are small, means that there are 150 K such bizzes in the province, as a whole. We fuel SK’s economy. The small business owner “is in SK forever. We stay and grow. That is not the case with large employers, who are not always here,” Kreuger says. For instance, consider the large potash industry giant, Nutrien, who recently announced that it was bringing two of its executives back to Saskatoon from their head office in Calgary. Kreuger laments that we continue to give incentives to large businesses to do such things, but seldom (if ever) to small ones, when it’s the latter which will always stay and grow. A 50% increase in growth is quickly achieved by and achievable for a small enterprise.
While the Provincial and Federal Governments must contribute far more, “Civically Speaking’s bold discussion (ably directed, as ever, by Lenore Swystun) offered that such civic services as better snow removal, subsidized/free parking passes for the downtown core and other, small business incentives would alone boost community life. The time is past due for the City of Saskatoon’s government–and its Provincial and Federal counterparts–to listen and act: For the future of our city and our province, we must do much more to raise the profiles and practices of the local small businesses on which we depend.