Canadian Entrepreneurs Worried About Rising Inflation: The 2022 Outlook

Twice a year, we conduct a survey of Canadian business owners to get a sense of their perceived challenges and opportunities in the market. Our latest survey, conducted between March 7, 2022 to March 21, 2022, captures the responses of 1,123 participants based in Canada. Every participant is either an existing entrepreneur or is planning to launch their business in the future. This year’s report is grounded in the new realities that are facing Canadian entrepreneurs in 2022. With high levels of inflation, COVID-related restrictions, adapting to new government guidelines, and worrying about tax season, entrepreneurs are showing remarkable inventiveness to stay afloat and change their business models. Let’s dive deeper into the data. Inflation and economic uncertainty lie supreme in the list of worries for entrepreneurs One in three (33.5%) entrepreneurs say inflation and economic uncertainty is their single-most pressing worry right now, while 38.9 per cent are concerned about cash flow. Add to this Omicron-related lockdowns and restrictions over the winter months, planning future investments and purchases is proving difficult for aspiring entrepreneurs. One in five (19.1%) surveyed by Ownr had yet to start their business and more than half (54%) said insecurity about costs are the biggest reasons holding them back. Of those who have started their businesses, nearly half (48.3%) say they’ve already raised their prices to some extent to combat the economic instability, with 30.5 per cent raising prices above 10 per cent. However, the survey shows that, in some ways, the impact of inflation is only just beginning to take effect and entrepreneurs are still bracing for the impact. 37 per cent of entrepreneurs say inflation hasn’t affected their business operations quite yet, but they expect inflation to increase their costs incrementally throughout 2022. From a year-over-year perspective, in our 2021 survey, only 20.8 per cent entrepreneurs marked inflation as a source of concern. This year that number rose to 33.5 per cent. Inflation has a knock-on effect for all levels of business – from the price of sourcing materials for a product, to the cost of operating a business, and the final price that consumers have to pay. A higher-than-usual shelf price of a product can cool sales volumes, leading to even more hardships for entrepreneurs. More Canadians opt for entrepreneurship in the face of return-to-work policies As restrictions are lifted and workplaces grapple with return-to-work systems, including hybrid models, Canadians are looking at avenues other than a traditional 9-to-5 to achieve financial independence. Two in five entrepreneurs (40.5%) surveyed held corporate jobs before launching their own business, signaling that Canadians continue to see entrepreneurship as a viable alternative to the traditional 9-to-5. Canadian business owners understand that the benefits of creating their own revenue stream – on their terms – outweigh the fears of entering into entrepreneurship. Optimism among entrepreneurs holds steady, with half of those surveyed (49.8%) feeling more optimistic than they were six months ago. Many are still turning to entrepreneurship in the hopes of gaining more purpose in their lives (28.6%), having creative freedom (19.4%) and greater control over their personal career development (19.7%). Why do Canadians not launch a business? For those who did not launch a business, costs were a major hurdle (54%). The other big obstacles were not being sure where to start (37.7%), a fear of failure (14%), and no longer believing in their business idea (4.2%). Several successful entrepreneurs have found themselves in this very situation in the past. There are many resources available for entrepreneurs to learn about business challenges and how to navigate them. One such resource can be found at Ownr itself. Entrepreneurship pulse: comparing sentiment in 2022 vs 2021. 65.6 per cent of entrepreneurs said they need or are relying on some type of government support, and one in four (26%) say their business would not survive without it. This suggests many entrepreneurs’ needs have been met since 2021, when Ownr’s previous survey found nearly half (45.9) of business owners were struggling to get adequate funding. Despite renewed restrictions, nearly half (46.6%) of entrepreneurs say the Omicron variant wave had no significant impact financially on their business. In 2021, one in four (26.7%) entrepreneurs said COVID-19 helped them gain new customers. However, entrepreneurs felt burdened by the Omicron variant wave, with 40.9 per cent of those surveyed saying financial support felt more out-of-reach than before. In 2021, running out of money (43.2%) was a key concern on the list of the biggest worries for entrepreneurs. Take a look at the full data report here.