In Canada, immigrant entrepreneurs face obstacles

TORONTO, Canada – Immigrants are joining the ranks of entrepreneurs in Toronto, but a recent study shows that many are struggling to overcome significant barriers to success, including inadequate English skills, lack of financing, and insufficient knowledge about the Canadian way of doing business.

About 100 immigrant entrepreneurs took part in a survey conducted from January to March 2013 by North York Community House, in partnership with Public Interest Strategy and Communications.

Results of the survey were incorporated in a study, DIY: Immigrant entrepreneurs are doing it for themselves, which also included in-depth interviews with representatives of service providers supporting immigrant entrepreneurs.

Six community animators spoke one-on-one with immigrant entrepreneurs in their respective mother tongues – Tagalog (Filipino), Farsi, Korean, Mandarin and Russian – and asked them to respond to a set of questions to assess their situation.

The study identified “enhanced English skills,” increased knowledge about finances, networking, and mentorship as critical areas that need to be addressed if immigrant entrepreneurs are to grow and sustain their small businesses.

“Strong English skills result in greater access to markets and suppliers, and access to problem-solving strategies and resources,” the study noted. Lack of English skills tend to make immigrant entrepreneurs insular, relying mainly on customers from the same cultural background and limiting their social networks.

Providing adequate support in these areas becomes more crucial given the growing number of new immigrants who are choosing entrepreneurship over traditional employment, the study said.

In most cases, an immigrant becomes an entrepreneur in response to a lack of employment opportunities, the survey showed.

Eighty percent of respondents had been in Canada for less than five years, and 32% opened up their business because they couldn’t find adequate jobs; 29% used it as a means of supplementing their income.

Others identified such “pull” factors as always wanting to start a business (17%), seeing a need in the community (15%) and taking advantage of a good opportunity (21%).

The survey showed that these immigrant startups are small: 44% are one-person operations; 29% have a staff of one and only one in six have more than five staff. In over half of the cases, they are also a family affair.

Relying on family, friends

Most of the businesses these immigrants have opened are in the service industries. Personal services – cleaning, childcare, hair salon, dog grooming – account for a majority of businesses, at 29.5 percent. Massage therapy, cake decorating, creating and selling hand-made jewelry and offering driving lessons follow next, at 26.3%. Food services – grocery stores, catering, restaurants – constitute 12.6%. Others include wholesale trade, construction, trucking and shipping.

Seventy-eight percent of those surveyed said they needed help opening their business. Sixty percent of them relied on their family and friends for support and less than 10% were able to find help in settlement services, business organizations and City Hall.

The study revealed insights into their goals for opening a business. “They did not emphasize access to full-time, full-year employment but rather more flexible models,” the study said. And, 85% of them said that they realized some, if not all of their goals.

About 50% also said they gained unexpected benefits from it: new skills and experience (26%), greater flexibility and balance (26%) and extended social networks (18%).

Service providers, for their part, identified other challenges faced by immigrant entrepreneurs. They include lack of credit history, lack of gender-specific services and lack of individualized services. There is no single type of entrepreneur, the study underscored. “Entrepreneurs are best served when the service reflects their distinct backgrounds, contexts and experiences.”

“Hidden challenges” can include lack of computer skills, inability to understand government regulations, and lack of contacts to draw on.

How do immigrant entrepreneurs define success? For many, it means profitability that allows them to derive a living income from the business, allows them to integrate into mainstream society and helps them with their overall health and wellbeing.

As to what makes an immigrant entrepreneur successful, the respondents identified the following characteristics: passion, drive and resilience; planning, focus and hard work, flexibility; sociability, being personable; ability to network and develop contacts within a community and beyond. – Rappler.com

The Origami is a content partner of Rappler. Read more of their stories here.