Aboriginal Entrepreneurs Survey

In 2002, most Aboriginal business owners reported profits and expected their business to grow during the next two years, according to a new survey.

Findings from a recent survey of 1,126 Aboriginal entrepreneurs (North American Indian, Inuit and Métis) show that 72% of Aboriginal entrepreneurs reported profits in 2002, and 43% reported an increase in sales revenues from 2001. Sales remained stable for 39% of businesses surveyed.

Nationally, nearly two out of three Aboriginal business owners (63%) anticipated growth in the next two years. This proportion reached 70% for entrepreneurs residing in British Columbia and the Yukon, where it was highest.

However, 37% of respondents did not expect their businesses to grow. Of this number, over half (56%) mentioned barriers to growth, citing the 2002 overall economic situation most frequently, followed by taxes and access to financing. Businesses in manufacturing, transportation and warehousing mentioned these barriers more frequently, while entrepreneurs operating in wholesale and retail trade were less likely to mention such barriers.

The vast majority of businesses (85%) operated full time in 2002, and two out of three had been in operation for more than five years.

Approximately 5 out of every 10 Aboriginal businesses had been in operation for 10 years or more in three sectors: primary industries; construction; and manufacturing, transportation and warehousing. The youngest businesses were in professional, technical and social services, where only 30% had been in business for 10 years or more.

Two-thirds of the businesses surveyed operated under a sole proprietorship structure, and over half stated that they operated in a highly competitive industry.

Aboriginal business owners in primary industries were the most likely to hire Aboriginal people, with 7 out of 10 reporting one or more Aboriginal employee. Professional, technical and social services had the lowest proportion of Aboriginal employees with 44%. Overall, over one-third (35%) of Aboriginal businesses had at least one full-time employee.

One-quarter of Aboriginal entrepreneurs had taken business training at the college or university level. Accounting, bookkeeping, business administration and management were the most popular courses.

In terms of business objectives pursued, Aboriginal entrepreneurs rated stability (84%) and profitability (80%) as very important, followed by personal and family employment (69%). In 2002, one in five business owners had a written business plan to achieve their goals.

Most Aboriginal business owners (80%) indicated that they needed less than $50,000 to start their businesses. In the professional, technical and social services, this proportion reached 91%.

In the primary industries, start-up funding requirements were greater and 72% required less than $50,000.

Nationally, most Aboriginal business owners (83%) used personal savings as a source of start-up funds. Personal savings were used most frequently for businesses in the professional, technical and social services sector, where start-up costs are generally lower. The second most frequently used source of funds by all Aboriginal businesses were commercial loans from banks or credit unions (51%).

Most businesses surveyed focused on local markets to sell their goods and services, while 13% sold goods and services outside of Canada.

Note: This report summarizes findings of the Aboriginal Entrepreneurs Survey conducted by Statistics Canada in the fall of 2003 on behalf of Industry Canada's Aboriginal Business Canada program.

Information from the 2001 Census was used to identify self-employed Aboriginal people for the purposes of the survey. A total of 1,126 Aboriginal business owners, located on and off-reserve, responded to the survey. Included in the Aboriginal population are those persons who reported identifying with at least one Aboriginal group, that is, North American Indian, Métis or Inuit, and/or who reported being a Treaty Indian or a Registered Indian, as defined by the Indian Act of Canada, and/or who reported they were members of an Indian Band or First Nation.

Definitions, data sources and methods: survey number 5048.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Gilles Paré (613-951-2517, fax: 613-951-1572; gilles.pare@statcan.gc.ca), Small Business and Special Surveys Division.