Young entrepreneurs face multiple challenges in Canada, from lack of experience, contacts, and financing to lack of access to space and facilities, and businesses having no inventory and low market value.
Young entrepreneurs have a more limited access to resources compared to established businesses. They are less likely to have access to resources such as coaches and mentors, networking events and opportunities, and business counselling. Startup businesses have less access to intellectual, human, and physical resources. Physical resources include things like distribution networks, manufacturing facilities and plants, inventory, equipment, buildings, and land. Without physical resources, the majority of businesses cannot function and deliver products or services. Human resources or employees are also essential to the functioning of any business. This is especially true for services industries such as retail, hospitality, financial services, entertainment, advertising, and staffing and consulting. Employees provide after-sales support and customer service, consult customers, and provide troubleshooting services. Intellectual resources are also essential to running a successful business and include copyright, brand, and patents. Other types of resources are customer databases, partnerships, and proprietary knowledge. Intellectual capital can also be divided into relational and structural capital. Relational capital, for example, refers to relationships with different partners, including local communities, regulators, employees, customers, and potential and existing investors. Formal and business contracts also fall in this category. Structural capital includes components such as trade secrets, intellectual property, data, applications, systems, and processes. Structural capital also covers elements such as media and advertising, business processes, and organizational culture. New businesses often find it more difficult to create organizational culture based on shared direction, identity, mission, and purpose. This also applies to things like situational awareness, business resilience, and motivated actions and reasoning.
Securing sufficient financial is essential to the effective functioning of any business. Access to funding is one of the main challenges that young entrepreneurs face, and this is mainly due to lack of access to networks and limited exposure to credit. There are different ways to obtain financing for a start-up in Canada, including peer to peer networks, angel investors, loans by credit unions and banks, government grants and loans, and funding by non-government and non-profit organizations. Funding is offered under the Canada Small Business Financing Program as well as programs at the territorial and provincial level. In Manitoba, for example, entrepreneurs are offered funding under the Young Entrepreneurs Program, Business Start Program, and others. In Ontario, start-ups can apply under Starter Company, the Northern Ontario Young Entrepreneur Program, and Young Entrepreneurship Partnership Program. Start-ups in Nova Scotia are offered loans https://www.smartborrowing.ca/ and loan guarantees under two programs – Student Entrepreneurship and the Small Business Loan Guarantee Program https://www.nscc.ca/services/entrepreneurship/ The latter offers working capital loan guarantees for established businesses and start-ups and term loan guarantees https://www.smartborrowing.ca/refresh-financial-improve-your-credit-score-with-secured-credit-card/. In addition, start-ups are offered business lines of credit, loans, and credit cards by financial institutions such as CIBC, RBC, and other major banks. Business lines of credit help customers meet operating and unexpected expenses and are offered in US and Canadian dollars. Business loans are also available to help start-ups purchase property and equipment and grow and expand operations. Businesses can choose from different options, including long and mid-term operating loans and operating and short-term loans.