As the chief financial officer of a start-up company, Kevin Fan has learned a thing or two about cash management.
Never count the money while people are talking to you, for example.
Wise advice – from a 12-year-old.
Kevin is a Grade 6 student at Ottawa’s Knoxdale Public School in west-end Ottawa. He and his class have spent the past four months launching a company as part of Entrepreneurial Adventure, a hands-on program that exposes 3,000 Canadian kids a year to the world of business.
The program pairs students with local business people to create a business, design a product, sell it and then give the profits to charity.
But the effort raises a more fundamental question: Can the next generation of Canadians be trained to become the entrepreneurs their parents are not?
Evidence suggests Canada suffers from a weak entrepreneurial culture. While it’s relatively easy to start a company, the record of turning start-ups into fast-growing and successful enterprises is less convincing.
Canadians worried about finding the next Research In Motion Ltd. or Bombardier Inc. have good reason to be concerned.
A 2010 study by Industry Canada judged the strength of entrepreneurship in Canada to be “relatively strong,” basing its assessment on a healthy birth rate of new companies and a good survival rate.
But the study also found that Canada generates a lower proportion of fast-growing companies than other developed countries, that relatively few small companies export and that the age profile of business owners is getting older.
Other research has identified a measurable distaste for risk among Canadian executives. A 2011 Deloitte survey of 900 Canadian and U.S. executives determined that Canadians are 18-per-cent more risk averse than their U.S. counterparts. The gap shows up in their reluctance to export, invest in their businesses, spend on research and development, and tap risk capital.
Canadian lenders are just as timid as business executives. The Conference of Canada’s latest report card on innovation gave Canada a D grade for venture capital, ranking it Canada 14th out of 15 peer countries in “speculative capital activity.” Venture capital investment equals barely 0.03 per cent of GDP, a third of the U.S. level and well below other top performers.
There is a continuing debate in academic circles about whether entrepreneurship is a teachable skill – at the elementary school level, right on through to university MBA programs.
Many business schools, including McGill University and the University of Toronto, now offer special entrepreneurship programs.
Some of the key attributes of successful entrepreneurs – creativity, optimism and daring – may be innate. But schools can certainly channel students and create environments where it’s safe to try, and fail.
Nothing, it seems, beats experience as a teaching moment.
Teacher Ben Shepherd, who has now guided two Knoxdale classes through the Entrepreneurial Adventure, says students learn to work as a team, follow through on a plan and set realistic targets. They’re also honing their presentation skills and discovering that selling is hard work.
“Entrepreneurship is something they learn to do,” he explained. “But you have to let them fail. …This is a great way for them to learn from their mistakes.”
This year’s enterprise – Full Speed Ahead – was started with a $200 loan from the parents’ council. The class used the money to purchase wrist bands and water bottles that tout the benefits of physical activity. The items were then sold at school and in the community, raising nearly $2,000 for Canadian Tire’s Jumpstart program, which funds sporting activities for financially disadvantaged kids.
It turns out that hot pink, lime green and purple wristbands are the big sellers; red and yellow, not so much. Water bottles, priced at twice as much as the wrist bands, aren’t moving at all.
“Some things work and some don’t,” acknowledged Alim Dhanani, 12, who worked on project management and Web design for the company. “To sell something, you have to have the right price. Not too small, so you have a profit, but not too big, so people will buy it.”
And Kevin, Full Speed Ahead’s CFO, has learned to stay focused on the bottom line by creating a ledger to keep track of revenue and expenses as they’re incurred.
Maybe the country will be okay after all.
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