BMO Financial Group

BMO Financial Group

June 18, 2011 10:27 ET

REPEAT-BMO Survey: If I Had a Million Dollars... I Would Start a Small Business

One in four Canadians would start-up their own boutique or specialty store

- Franchises second most popular choice of Canadians

- Online business ranks as third most popular choice

- Each year there are more than 130,000 new business start-ups in Canada

TORONTO, ONTARIO--(Marketwire - June 18, 2011) - In Canada, more than one million small businesses account for nearly 98 per cent of private sector firms. Every year an average of 130,000 new businesses start up. So, if you won $1 million and had the chance to open a new business, what would it be?

A survey commissioned by BMO Bank of Montreal found that for Canadians who decided to go into business, the vote for most popular goes to a boutique or specialty store (25 per cent). Furthermore, this type of establishment is more appealing to women than men who were surveyed (29 per cent vs. 21 per cent).

"With a business environment that has been in a constant state of change, successful businesses are the ones that have developed strong business plans that enable them to quickly adapt to meet new customer needs and grow through expansion into new or underserviced niche markets" said Cathy Pin, Vice President, Commercial Banking, BMO Bank of Montreal. "We work closely with our customers from the start-up stage through to growth and maturity. We are seeing a real mix of business plans and ideas ranging from those looking to capitalize on social media, to more traditional businesses such as franchising, skilled trades and professionals," added Ms. Pin.

The survey also found that aside from specialty stores, franchises, such as McDonald's or Tim Horton's, rank as the second most popular (17 per cent) dream business venture. Franchises were more appealing to men surveyed (21 per cent vs. 14 per cent women) and for those under the age of 45 (21 per cent vs. 11 per cent among those 55+).

Franchises stand to benefit from expected growth in the retail sector, according to BMO Economics. "Demand for retail services, including food services, should remain moderately strong in the years ahead in response to steady growth in the economy and population. Canadian real personal consumption of services grew 3.3 per cent in the past year, in line with the decade-long average," said Sal Guatieri, Senior Economist, BMO Capital Markets.

In retail, inflation-adjusted growth of around 3 per cent is expected this year in response to steady growth in employment and the population, and relatively low interest rates.

Additional Findings

  • Nine per cent of survey respondents indicated that they would start an online business, with the highest response from those in Alberta at 13 per cent, and the lowest in Atlantic Canada with 5 per cent.
  • A coffee shop was a favourite for 8 per cent, with the strongest responses in Quebec at 12 per cent.
  • Restaurants (non-franchise), an industry that employs more than one million people and generates $60 billion in annual sales were cited by 7 per cent of respondents nationally. A strong 60 per cent of new restaurant start-ups survive beyond their first two years in business.
  • Personal services, which include a wide range of choices from hairstyling, to auto repair to landscaping were selected as the top survey choice by only 3 per cent.

The online survey was conducted by Leger Marketing between May 30 – June 1, 2011, using a sample of 1504 Canadians, 18 years of age or older. A probability sample of the same size would yield a margin of error of ±2.5 per cent, 19 times out of 20.

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