The statistics are a little scary. Only 62% of Canadian startups make it to their third birthday. An entrepreneur’s financial literacy is one of the key attributes that directly influences the success of a startup, but anecdotal evidence, as well as published studies by organizations including Intuit, Startup Canada and the Canadian Youth Business Foundation (CYBF), suggest that today’s startups lack the skills required for success. According to a recent study by Intuit: “The single biggest reason that more small businesses don’t succeed is that they lack the financial literacy skills needed to navigate the obstacles.”
Power in numbers
Broadly speaking, financial literacy includes elements such as financial management, risk management, record keeping and compliance. That means you should know how to file company taxes, juggle inventory and manage payroll. Financial literacy also includes an understanding of the key metrics that directly impact your startup’s bottom line, items that need to be tracked carefully and often.
The good news is that governments, industry and not-for-profit groups are paying significant attention to and addressing the financial literacy needs of startups. There are plenty of resources available to help entrepreneurs navigate the complexities of running a startup. However, there still remains a gap in getting the financial aspects of running a business right.
The game plan
MaRS has partnered with Ontario’s Regional Innovation Centres, CYBF and the province’s largest credit union, Meridian, to explore the financial competencies that successful entrepreneurs know to be critical for their businesses. The study also seeks to understand the current state of financial literacy in Ontario’s innovation ecosystem. Ultimately, the results of the research will be used to support the capacity-building and development of our entrepreneurship communities through the improvement and/or creation of new resources, tools and workshops to better serve you.
We’re seeking your help! Complete our survey for a chance to win prizes
Help us benchmark the state of financial literacy in Ontario by completing our survey. The survey should take five to 10 minutes to complete, your answers will be completely anonymous and you will have the chance to win one of two $100 Amazon gift cards. Stay tuned for the results this summer!