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:
WEI is implemented by a not-for-profit organization in each province served by WD, including:
Each WEI organization is an independent entity which is named and organized uniquely to reflect the differing needs and client base in each province.
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:
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.
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:
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:
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:
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.
|Indicator||Per Loan Client||Total Population of Loan Clients|
|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|
|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|
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:
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:
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:
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:
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:
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.