Executive Summary

The Women's Enterprise Initiative

The Women's Enterprise Initiative (WEI) was established by Western Economic Diversification Canada (WD) in 1994 to encourage the establishment and growth of women-owned and controlled businesses, encourage self-employment and business development, and promote economic equality between men and women.  This mandate is supported through:

• Introducing and promoting the concept of entrepreneurship to women;
• Increasing the availability of capital to women-owned enterprises; and
• Providing services to help women develop experience, expertise, assets and credit track records, enabling them to increase both the number and strength of women-owned businesses in Western Canada.

WEI is implemented by a not-for-profit organization in each province served by WD, including:

• The Women's Enterprise Centre (WEC-BC), which operates in BC;
• Alberta Women Entrepreneurs (AWE - the legal name is Alberta Women Entrepreneurs Association);
• Women's Entrepreneurs of Saskatchewan Inc. (WESK); and
• The Manitoba Women's Enterprise Centre (MWEC).

Each WEI organization is an independent entity which is named and organized uniquely to reflect the differing needs and client base in each province.

Purpose of the Project

The purpose of this project is to conduct an impact assessment of the WD-funded activities of the four WEI organizations covering the five-year period from April 1, 2003 through March 31, 2008.  The assessment focuses on both outputs and outcomes: 

• Key outputs include loans, advisory services, training and information services. 
• Key outcomes and related performance indicators include the number of businesses created, maintained and expanded, number of jobs created and maintained, increased revenues, leveraged financing, and client satisfaction.

Method of Study

We conducted this study in two phases.  The primary objective of the first phase was to prepare a detailed work plan that was then implemented in the second phase of the study.  In preparing the work plan, we conducted an initial meeting with the Advisory Committee established for the project; compiled available information regarding the funding provided by WD, the services delivered, and the results reported by the WEI organizations from 2003 to 2008; developed a profile of WEI including a program "logic" model; defined the research questions, indicators and data sources; and developed the questionnaires for the impact assessment. We then met with the Advisory Committee to obtain approval of the detailed work plan prior to proceeding with the field research.

The major component of the field research involved a survey of a sample of 444 WEI clients drawn from across the four provinces.  At a confidence level of 95%, a sample of 444 WEI clients achieves a margin of error of about ± 4.6%. Of the 444 clients who participated in the review, 175 were loan clients.  These loan clients accounted for 36% of the number of loans and 38% of the value of loans approved over the past 5 years.  Other components of the field research included a focus group with clients in each province and interviews with 31 WEI and WD staff, 25 Board Members (current and past), and 30 other stakeholders who work with the target group. 

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Major Findings and Conclusions

The major findings and conclusions arising from our review are as follows:

1. The WEI organizations provide a range of services to women entrepreneurs in Western Canada.

The key services that are delivered by the WEI organizations include:

• Capital loans to assist existing businesses and help entrepreneurs create new businesses.  WEI organizations can make loans of up to $100,000 to new or existing businesses.  Over the past 5 years, the four organizations have issued 572 loans totalling approximately $22.9 million.
• Business advisory services such as assistance with business planning, one-on-one counselling and business orientation.  Over the past 5 years, almost 28,000 business advisory services have been delivered.
• Training and skills development through seminars and workshops covering topics such as marketing, business start up and planning, and financial management. Over the past 5 years, WEI organizations have delivered over 1,700 sessions targeted at over 21,000 clients.
• Information services provided as a result of telephone enquiries, walk-ins, consultations, and information sessions. 

2. Clients are generally very satisfied with the services that they receive.

Most clients (60%) reported receiving more than one type of service.  Of the clients whom we surveyed, 58% have participated in a training session or seminar, 48% have received one-on-one business counselling, and 42% indicated that they have received a loan under the program. When asked to rate their satisfaction with the assistance received from WEI on a scale of 1 to 5, where 1 is not at all satisfied, 3 is somewhat satisfied and 5 is very satisfied, clients provided an average rating of 4.1.  While 75% of the respondents indicated that they are satisfied or very satisfied with the assistance received (a rating of 4 or 5), only 5% indicated that they are not at all satisfied (a rating of 1).

The loans, particularly when combined with business advising, are considered the most significant service received by clients.  Most loan clients reported also receiving business counselling and, more specifically, reported receiving assistance in the development of a business plan. Clients praised the knowledgeable, friendly staff who not only offered guidance and helpful advice but also provided significant moral support and encouragement. The business planning sessions and training programs offered by the organization were considered well-organized, educational, specifically relevant to women, and affordable.

Clients who were not satisfied with the assistance they received commented on a lack of follow-up or follow-on services; concerns about staff turnover and/or the capabilities of the staff; and a poor fit between their needs and the focus of the training sessions or seminars (e.g., not tailored to the characteristics of their business or their stage of development).

3. Most of the clients are women between the ages of 35 and 54, well educated, and (at the time of the interview) currently operating a business.

Of the 444 clients who were surveyed, 309 (70%) are currently operating a business. Most of these businesses are in the service or retail sector, have operated for 4 years or less, employ four or fewer people, and generate revenues of $250,000 or less annually. Most clients have fewer than 5 years of management experience which, in most situations, is directly linked to the operation of their current business.

On average, the businesses which received loans under WEI generate $475,000 in revenues and employ 5.8 people. Businesses which did not receive loan funding currently have revenues averaging $272,000 and employ 2.8 people.

4. The services have had a range of impacts on the clients.

Clients reported that the services have:

• Helped them to further develop their business, management and/or personal skills (39% reported a significant impact).  Clients reported further developing skills related to business planning, marketing, financial management, business management, and general business knowledge through participating in training programs and seminars, networking with others, and reviewing information and resources the organization has gathered and made available online or through its offices.
  
  
• Increased their access to other programs and services (38%).  The clients reported that the referrals from staff as well as the information and resources available through the offices,   WEI websites, and newsletters have increased their access to information about other programs and services related to networking and mentoring, training, professional development, business development, financial management, marketing, and business planning.  The WEI organizations commonly serve as a "front door" through which clients are able to identify and access other programs and services. 
  
  
• Enabled them to network with other entrepreneurs (37%).  The WEI organizations facilitate networking by staging events and seminars as well as informing clients of events, seminars, and workshops (not necessarily staged by the WEI organization) via e-mails, newsletters, phone calls and postings. Clients reported being motivated and inspired by other women entrepreneurs met at networking events.  These events and seminars also allowed women to exchange information and build business relations with each other. 
  
  
• Increased their access to information for decision making (35%).
  
  
• Encouraged them to start and/or further develop their own business (34%).  Many of the women said that they had already made the decision to start a business prior to approaching WEI but noted that advisors played a very important role in encouraging them to continue progressing towards that objective.  More specifically, clients recognized the motivational and emotional support provided by the WEI staff as well as their technical assistance in areas such as business planning and counselling.  Staff members were described as positive, supportive, motivational, and professional in their advising and counselling services.  The financial assistance and advice, the available information resources and training, the networking opportunities, and help regarding various business issues were also identified by clients as encouraging factors.
  
  
• Increased access to financing or capital from sources other than WEI (14%).  Some clients indicated that the advisors played an important role in helping them prepare their business plan, which they then took elsewhere, and/or in providing referrals to other sources of capital such as the Business Development Bank of Canada, the Canadian Youth Business Foundation, commercial banks and credit unions, Community Futures, Aboriginal Business Canada, and other local, provincial and federal sources of assistance. 

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5. The services, particularly the loans, have generated significant economic impacts in terms of business development.

The loans and assistance provided by WEI to loan clients help businesses become more established and grow.  Assessing the impact of this assistance is complicated by the fact that the impacts are not limited to one year (the businesses may continue to grow and prosper well into the future) and most clients receive more than one service that impacts upon them (e.g. they may obtain one or more loans, receive business counselling and participate in training).  To address these issues, the methodology focuses on the enterprise, rather than individual services, and then tracks the growth and survival rates of those enterprises going out five years from the time that the first significant assistance is provided.  The five-year period was selected because our survey consisted of clients who have received assistance during the past five years.  To the extent that the impacts of the assistance provided by WEIs continue to go forward beyond five years, this approach will under-estimate the ultimate cumulative impact of the assistance provided. 

The results of the research indicate that:

• The revenues of the WEI assisted businesses tend to grow each year that operations continue. The revenues of the average business receiving loans increased from about $57,000 in the year prior to receiving the loan (most of the businesses are not yet in operation) to $163,000 in the first year to over $550,000 in the fifth year after receiving the loan.  Over a five- year period, the average WEI client business which remained in business would generate about $1.9 million in additional revenues. 
  
  
• Business survival rates decline over time.  Based on the survey results, loan write-off data and other research, we estimate the business survival rates for loan clients decline from about 98% in Year One to 75% by Year Five (i.e. 75% of businesses are still operating after five years). 
  
  
• After adjusting for survival rates, we estimate that the average WEI business (including those which are still operating and those which have ceased to operate) generates revenues of approximately $1.5 million over the five-year period. 
  
  
• The majority of impacts are incremental in that they would not have occurred in the absence of the support provided by the program.  When asked to rate the importance of the WEI services to the establishment and/or development of their business on a scale of 1 to 5, where 1 is not at all important and 5 is very important, loan clients gave an average response of 4.5.   On average, these clients estimated that there is only a 34% chance they would have been able to develop their business to the extent they have without the assistance of the WEI.  Overall, the WEI clients attribute 55% of their current business revenues to the services provided by the WEI.

By extrapolating this analysis to the entire population of WEI loan clients, we estimate that (going out over a five-year period from when assistance is initially provided) the $22.9 million in loan funding issued over the past five years has generated about $660 million in incremental revenues and 8,000 incremental person years of employment.  Of this amount, $363 million in revenues and 4,430 person years of employment is attributed by clients to the services provided.

The following table summarizes the estimates on a per business basis and extrapolated to the total population of loan clients based on the value of loans issued over the past five years. 

Estimate of the aggregate economic impacts of the services provided to WEI loan clients

Indicator	Per Loan Client	Total Population of Loan Clients
Loans
Value of Loans Received	$51,693	$22.9 million
Business Activity Over A five-year period
Incremental Revenues Over 5 Years	$1.5 million	$660 million
Export Revenues	$74,000	$33 million
Employment	18.1 person years	8,000 person years
Wages	$341,000	$151 million
Investment	$171,000	$76 million
Impacts Are Attributed to the Services of WEI
Total Revenues Over Five Years	$818,000	$363 million
Export Revenues	$41,000	$18 million
Employment	10.0 person years	4,430 person years
Wages	$188,000	$83 million
Investment	$62,000	$27 million

Over time, the loan clients have invested about $2.35 in their businesses for every dollar in loan funding received.  The loan clients estimated that 36% of their investment is incremental in that it would not have been made in the absence of the services received from the WEI organizations.

6. Although difficult to quantify, the non-loan services have also generated significant impacts.

As part of the impact assessment, we also reviewed the impact of non-loan services with a particular focus on business advisory services and training.  Because of the soft, incremental nature of many of the services, it is often difficult for clients to quantify the impact that an advisory service or participation in a training program has had on their business.  It was not unusual for clients to indicate that they are very satisfied with the services that were provided to them, to feel that it has helped them in starting-up or operating their business by enhancing their confidence or skills as well as providing guidance and useful feedback, but not to be able to provide a reasonable estimate of the economic impact that it had. 

That being said, there were examples where clients reported significant impacts.  For example, there were several clients who participated in the survey and/or the focus groups who indicated that their business was very unlikely to have been established without the assistance of the business advisor and/or the training they received. In some cases, these businesses are now generating revenues of $400,000 or more annually.

We interviewed 181 clients who had received training but had not received a loan and 112 clients who had received business advisory services but had not received a loan (some clients fit into both categories). The results of the focus groups and interviews with these clients indicate that:

• The services were provided to a mixture of clients who were in the process of starting a business, were already operating a business or who have not started a business. 
• Clients are very satisfied with the training that they have received.  When asked to rate their satisfaction with the assistance received from WEI on a scale of 1 to 5, where 1 is not at all satisfied, 3 is somewhat satisfied and 5 is very satisfied, the training clients provided an average rating of 4.0.  Advisory clients (i.e. non-loan clients who received advisory services) provided an average satisfaction rating of 4.1.
• Most training clients believe that the training and other non-loan services they received was useful to them in the establishment or further development of their business but not critical.  When asked to rate the importance on a scale of 1 to 5, where 1 is not at all important and 5 is very important, the average rating was 3.5 and 54% of the training indicated that it was fairly or very important (ratings 4 or 5).  Similarly, advisory clients provided an average rating of 3.8 and 59% of the clients indicated that it was fairly or very important.

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7. WEI is viewed as successful in achieving its key intended impacts.

When asked what they consider to be the most important indicators for measuring the success of the program, WEI staff, WD representatives, Board Members and other stakeholders identified measures such as the number and value of loans provided, number of clients served and services delivered; the success rate of the businesses assisted, performance of the loan portfolio (e.g., low default rates); the number of jobs created/maintained, the number of new start-up businesses assisted; and the level of client satisfaction.

When asked to rate how effective they believe the program is in terms of the indicators that they identified, on a scale of 1 to 5 where 1 is not at all effective, 3 is somewhat effective and 5 is very effective, the average rating ranged from 3.5 amongst other stakeholders (who tend to be least familiar with the program) to 4.0 amongst WEI and WD staff to 4.3 amongst Board Members.  WEI was considered particularly successful in terms of increasing access to capital, assisting large numbers of clients, delivering a range of quality services, aiding in the start up and further development of businesses, improving the success rates of businesses, and raising awareness of the entrepreneurial option for women. 

8. The strong capabilities of the staff, the support provided by the Board of Directors and other volunteers, and strong linkages developed with other programs and services have been key to the success of the WEIs.

A variety of factors were identified through the interviews and focus groups as contributing to the success of the WEIs. These include:

• The professionalism and performance of the staff and CEOs. When asked to identify what they attribute the success of WEI, the majority of stakeholders, WEI and WD staff, and WEI Board Members identified staff including the CEO`s who have strong managerial and leadership skills as well as the effective and proactive staff team who are highly motivated and committed to quality in service delivery.  Similarly, in the focus groups, clients praised the commitment of staff to serving women entrepreneurs in the province and their willingness to work hard to ensure that women are in the best position possible to achieve success. 
  
  
• The support provided by a strong Board of Directors and extensive volunteer base.  In 2007-08, there were 32 Board Members which is equal to an average of 8 per organization.  Over 3,600 hours were contributed by 467 volunteers (including Board Members), equal to an average of about 900 hours per WEI per year.  The Board Members bring valuable expertise and a strong commitment to supporting the development of women entrepreneurs.  Many of the Board Members play an important role in developing linkages among the WEI, their region and other organizations.
  
  
• Strong linkages that have been developed with other programs and services.  In each province, there is a wide variety of organizations involved in delivering programs, services, and resources which can be of assistance to entrepreneurs.  The WEI organizations work hard to complement these resources by focusing on filling gaps, being active in the community, establishing a strong referral network, and partnering with other organizations wherever possible on specific services, events and activities.  The four organizations reported working with 177 partners in 2007-08.
  
  
• Awareness of its services among the target group. The WEI organizations have continued to make progress over the past five years in terms of creating awareness of services and raising the visibility of the organization through promoting and upgrading their websites, developing extensive communication lists, attending or hosting events, advertising, and building a strong referral network. Indicators of rising awareness include increases in the number of website hits and telephone inquiries as well as the number of clients served and requests for speaking engagements. 
  
  
• Increasing ability to serve women entrepreneurs from across the province.  The ability of WEI to serve clients from across the respective provinces has improved significantly in recent years.  Regional delivery of services is facilitated by delivering services by telephone and the Internet, collaborating with regional organizations, establishment of satellite offices, staff travel, videoconferencing, and staging seminars, workshops, and meetings in various regions.

9. There is a strong perceived need for the types of services supported by WEI.

When asked to rate the need for the program on a scale of 1 to 5, where 1 is no need at all, 3 is somewhat of a need, and 5 is a major need, WD and WEI staff provided an average rating of 4.8, WEI Board Members and clients provided an average rating of 4.7, and other stakeholders interviewed provided an average rating of 3.7.  Some of the major factors identified by WD and WEI staff, Board Members and other stakeholders as contributing to the strong need for this type of program include:

• Difficulties that women face in accessing capital.  Factors such as the characteristics of the businesses (e.g. in the service, retail and hospitality sectors), limited availability of collateral, and credit history can all constrain their access to capital.
• The limited experience of many of those planning to start up a new business. 
• Rising demand, as reflected in the impressive growth in the number of women entrepreneurs in Western Canada.

10. Budget limitations were identified as the primary factor constraining the impacts generated by the program.

As such, the most common recommendation by those involved in the program was to increase the level of operating funding provided.  The budget for the program has not increased in recent years.  Budget issues limit the level of services that can be delivered, limit the ability of the organizations to market themselves and reach segments which they consider to be underserved, and contribute (or are anticipated to contribute over the next few years) to turnover amongst staff members.

The maximum size of loans that can be provided was also identified as a constraint. The level has not been increased since the program was established.  The current maximum of $100,000 constrains the ability of the WEI to loan money to businesses in industries that require higher levels of capital (e.g. manufacturing) than the typical retail, service or hospitality business. 

Subject to the availability of increased funding, some of the steps that were identified by the WEIs that could be considered to build on the strong results and further increase the impact of WEI going forward include:

• Continue to raise the profile of the program by creating more awareness of the services offered. Some provinces have particularly highlighted the need to reach out to certain groups such as Aboriginal, immigrant, older and younger women who may be underrepresented as clients. 
• Continue to work to increase regional access to services across the provinces.
• Make greater use of the loan funds that are available.  As of March 31, 2008, approximately 49% of the aggregate loan funds of the four organizations were outstanding. 
• Strengthen partnerships with other business organizations in the province and with WEI offices in other provinces.
• Increase access to aftercare services, with a particular focus on identifying businesses at risk and working with those in a position to expand.
• Continue to upgrade and expand the capabilities of the website (e.g. provide greater opportunities for women entrepreneurs to promote their business and interact with each other) while ensuring that the content remains up-to-date.
• Expand other services.  Suggestions included expanding training services to ensure that women have the skills to not only start businesses but also expand their business as well as staging more networking events that bring women together in an informal setting.

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11. WEI has contributed to achievement of the intended outcomes outlined under WD's Program Activity Architecture.

More specifically, as outlined in the previous points, WEI has helped to:

• Improve business productivity and competitiveness by promoting awareness and adoption of management and business practices as well as facilitating the creation of business networks. Clients report that the wide range of WEI business services have helped them to further develop their business, management and/or personal skills, increased their access to other programs and services, enabled them to network with other entrepreneurs, increased their access to information for decision making, and encouraged them to start and/or further develop their own business.
  
  
• Increase access to risk capital and business services for entrepreneurs and small businesses. In addition to the nearly $23 million in loans provided by the four organizations, WEI services have increased access to capital from other sources through assisting women entrepreneurs in the development of business plans and in providing referrals to other sources of capital.

12. The economic return on the investment made by WD has been significant. 

WEI organizations have received $18.8 million in operating funding over the past five years.   Even without taking into consideration the impacts of their services on non-loan clients, the WEI organizations are generating one person year of employment for every $4,246 in operating funding they receive.  On a per dollar of operating funding basis, the loan clients attribute $19.30 in revenues, $0.96 in export revenues, $4.43 in wages, and $1.46 in new investment to the services received from WEI.