Evaluation of the Women’s Enterprise Initiative

Executive Summary

Introduction

The Women's Enterprise Initiative (WEI) was established in 1995 to encourage the development and growth of female-led businesses, advance self-employment and business development and, ultimately, promote economic equality between men and women.

The WEI operates not-for-profit WEI organizations in each of the four western provinces. The organizations are incorporated and currently receive operating funding and a loan fund from the department. Each organization is led by its own board of directors and offers loans as well as services tailored to the particular needs of women in its region. The most recent five-year funding agreement expired 31 March 2010 and the funding agreements have been renewed on a year-to-year basis since then. Each organization currently receives annual operating funding of $975,000 and the loan fund was valued at over $20.1 million as of 31 March 2012.

This evaluation assessed the relevance and performance of the WEI over the five fiscal years from 2008–09 to 2012–13. The evaluation used multiple lines of evidence and included document and literature review, file and database review, analysis of comparable programs, key informant interviews, client surveys and focus groups. During the study period, a total of $25.6 million in loans were approved by the WEI organizations and approximately 17,403 clients received services.

Relevance – Continued Need for Programming

Females are an under-represented segment of entrepreneurs. Of all small and medium-sized enterprises in Canada in 2007, approximately 16 percent were majority female owned and these proportions were largely unchanged from 2001. The literature and interviews reviewed in this evaluation confirm the effectiveness of targeted programming in meeting the needs of women entrepreneurs. The effectiveness of non-targeted programming has not been well-studied.¹

The WEI filled important programming gaps in business support services, female-focused training programs and services, and financial assistance for women entrepreneurs. More than half (53 percent) of clients who received loans considered the prospects of obtaining financing elsewhere very unlikely. About two thirds of businesses that were not approved for a loan under the WEI reported obtaining financing from other sources; however, most of these clients reduced the scope or delayed the establishment or development of their business.

Relevance – Alignment with Departmental and Federal Government Priorities

The WEI supports the department’s strategic outcome of developing and diversifying the western Canadian economy and aligns with federal priorities as outlined in the Government of Canada’s “Advantage Canada: Building a Strong Economy for Canadians” document.

Relevance – Consistency with Federal Roles and Responsibilities

Over 90 percent of key informants indicated that the WEI is consistent with federal government roles and responsibilities. It fits well with the department’s mandate for economic diversification in Western Canada. A small minority of key informants questioned the need for the WEI and were of the view that the role of government is to foster diversification and not to support one group or special interest groups.

Performance – Achievement of Expected Outcomes

The program achieved short term impacts such as increased revenues, jobs and business creation. Among non-loan clients, 70 percent were satisfied with services received and 35 percent indicated the services will improve the competitiveness of their business. Sixty-nine percent of 96 loan client respondents noted the funding enabled their business to survive and most non-loan clients believed the services were important, but not critical, to establishing or developing their business. Over the intermediate term, clients estimated that 44 percent of their current revenues would not have been generated in the absence of the support provided by the program, at least 43 percent of clients indicated improved business practices as a result of program assistance and at least 16 percent reported the program assistance had increased the export capacity of their business. Between 1995 and 2011, the number of self-employed women in western Canada grew 27 percent, a trend that reflects one of the program’s ultimate outcomes: greater self-employment and business development. By increasing business establishment and survival, the program expects to contribute to another of its long term outcomes: establishment and growth of women-owned and controlled businesses. The program’s ability to contribute to its third ultimate outcome, economic gender equality, is difficult to measure.

WEI success factors include skilled and dedicated staff, the credibility of WEI organizations, their approach to design and delivery of services, departmental support and well-defined objectives and governance structures. Clients appreciated the readily available support, excellent website and variety of services (information, mentoring, training) offered. Factors which constrain the achievement of outcomes relate to limited resources, the short-term agreements with the department, low levels of leveraged funding, lack of access to services in particular communities, limited flexibility of the services particularly with respect to lending restrictions and limited staff expertise and understanding of particular types of businesses and industries. The most-commonly identifed external factors that may influence the WEI and its success are the overall health of the economy and overall public recognition of the need and value of the services.

Performance – Demonstration of Efficiency and Economy

The evidence suggests that the program is operating with due regard to economy and efficiency:

• The department reviews annual reports to determine whether the organizations are performing up to expectations and achieving their minimum performance standards. Only one organization fell short of its loan targets for one year during the study period. In terms of the department’s efficiency, at most one full time equivalent position supported the four WEI organizations that received a total of $3.9 million in funding per year.
   
• On average, per year (2008–12), the WEI organizations delivered a total of 5,983 business advisory services, 38,501 information services and approved 114 loans. A breakdown of costs to deliver loans or services would require more detailed costing information than is currently available. The WEI organizations disbursed a total of over $25 million in loans and created 2,384 jobs. This is equivalent to one job per $10,737 of loans disbursed and 5.3 jobs per loan, comparing favourably with Industry Canada’s Canada Small Business Financing Program that created 2.5 jobs per loan.² This also compares favourably with the department’s Community Futures Program which averaged one job per $13,688 of loans disbursed and 3.6 jobs per loan over the same five year period.
   
• At the time of each of the loans by the WEI organizations, every dollar in loans disbursed by the WEI organizations was matched by $1.03 of financing from non-departmental sources. In comparison, Atlantic Canada Opportunities Agency’s Women in Business Initiative reported leveraging of $0.39.
   
• Clients estimated that 44 percent of their current revenues would not have been generated in the absence of the support provided by the program.
   
• The WEI is recognized in the literature as a “best practice” in providing research-based, cost-effective, “one-stop” support services to women entrepreneurs. Although the WEI is good value for money, the WEI organizations can improve in terms of collaboration and partnerships. To leverage resources and increase outreach to rural communities, WEI organizations should increase efforts to collaborate, develop referrals and better coordinate programming to avoid duplication and ensure that services are available to all women.
   
• The program needs resources and funding changes to enable service planning and sustainability. Research is needed to ensure the programming is needs-based and designed to most effectively support female entrepreneurs. Service access for clients could be improved by easing the application requirements for loans, delivering more services online or offering training and seminars at different times and locations.

Recommendations

The evidence gathered in the evaluation and the analysis supported the following recommendations:

Recommendation 1: The department should consider funding longer-term contribution agreements with WEI organizations to facilitate planning of services.

Recommendation 2: The department should work with the WEI organizations to continue to evolve and ensure the program continues to meet the needs of women entrepreneurs.

Introduction

Acknowledgement

Western Economic Diversification Canada (WD) would like to thank all of the key informants and survey participants who generously gave of their time and knowledge to take part in the Evaluation of the Women’s Enterprise Initiative (WEI). Without their participation and their insights, this report would not have been possible. The evaluators acknowledge the work done by Ference Weicker & Company Ltd. (the consultants) in collecting key informant and survey data.

Background

Although women entrepreneurs have played an increasingly important role in Canada’s economy over the past three decades, they continue to encounter significant financial and service barriers when growing their businesses. In response to identified gaps faced by female entrepreneurs, WD established the WEI in 1995 to support the development and growth of female-led businesses and, ultimately, economic equality between men and women.

The initiative established not-for-profit WEI organizations in each of the four western provinces. Each organization is led by its own board of directors. The organizations are incorporated and receive annual non-repayable contributions from WD to offset general operating costs and engage in two broad categories of activities:

1) Services: Deliver business, advisory, training and information services to women who are interested in starting or expanding a business. The businesses must be owned and controlled by women; and

2) Loans: Provide loans of up to $150,000 to women starting, or already leading, their own businesses. Loans are approved by the board of directors of the organizations or their delegates.

The organizations are members of, and partner with other members of, the department’s Western Canada Business Service Network. Through partnerships with Network members as well as other associations, each organization offers resources tailored to the particular needs of women in its region. Offices are located in Kelowna, Calgary, Edmonton, Saskatoon, Regina and Winnipeg.

The most recent five-year funding agreement expired March 31, 2010, and the funding agreements have been renewed on an annual basis since then. The department’s A-base funding supports WEI organizations. Approved operating funding per organization, from program inception to March 31, 2013, is summarized below.

Between the program’s inception and March 31, 2012, WD has supplied WEI organizations with over $17.4 million in loan funds to provide conditionally repayable loans to female entrepreneurs. Loan funds per organization are outlined below.

The value of the loan funds had grown to over $20.1 million by March 31, 2012.

Until 2009, the operating funding for the WEI was under the Western Diversification Program authority while the loan funding was provided under the WEI program authority. To facilitate evaluation, the operating and loan funding were consolidated under the WEI program authority in 2009. Currently, the WEI organizations are accountable to government through terms that have been set out in their contribution agreements with WD. Full eligibility and governance information is outlined in the Terms and Conditions of the WEI.³

Evaluation Context

The WEI Performance Measurement Framework formed the basis for the evaluation that spanned fiscal years 2008–09 to 2012–13. The WEI has undergone two evaluations in 1998 and 2004, two impact assessments in 2002 and 2008, and an audit in 2008. There were also two evaluations of the Western Diversification Program, in 2003 and 2008, which included the operating component of the WEI. The 2008 impact assessment confirmed that the program was achieving its intended outcomes and the 2008 audit results concluded that there was an appropriate level of oversight for the program. The fact that the program has been well-studied and has undergone no major changes within the past five years suggests the evaluation is low risk and the design, methods and evidence were calibrated accordingly.

Evaluation Scope and Objectives

The evaluation of WEI is guided by the 2009 Treasury Board of Canada Secretariat (TBS) on Evaluation and the Standard on Evaluation for the Government of Canada. As required by the TBS Policy on Evaluation, all direct program spending must be evaluated every five years. The evaluation of the WEI Program was identified in the Department of Western Economic Diversification 2011–16 multi-year departmental evaluation plan.

The objective of the evaluation is to report to Senior Management and TBS on the relevance and performance of the WEI as identified in the 2009 TBS Policy on Evaluation. The evaluation also assessed the extent to which the WEI strengthened women-led small or medium-sized enterprises and contributed to developing and diversifying the western Canadian economy.

Evaluation Approach, Design and Methodology

The logic model underlying this theory-based evaluation was developed by program managers as part of the program’s Performance Measurement Strategy. The evaluation effort, in relation to both design and methods, was calibrated to reflect the evaluation’s low risk status. A non-experimental research design with multiple lines of evidence were considered appropriate and sufficient to meet the study objectives. The lines of evidence and amount of data were reduced as much as possible without compromising data reliability and sufficiency. A consulting firm contracted by Western Economic Diversification (WD) gathered data from key informant interviews, surveys and focus groups; the evaluation unit analysed and integrated findings from all lines of evidence into a final report. To maximize the objectivity and relevance of the conclusions, the evaluation was conducted in consultation with senior program staff.

Evaluation Study Activities

Preliminary Consultations

Preliminary consultations were conducted with regional departmental staff and the Chief Executive Officers of each Women’s Enterprise Initiative (WEI) Organization. The purpose of the preliminary consultations was to discuss the evaluation methodology and request comprehensive lists of clients and key informant interviewees. The evaluation framework was reviewed by senior program staff and senior department management. Through these consultations, preliminary evaluation information was obtained.

Documents and Literature Review

Four groups of documents were reviewed as part of the evaluation:

• General Background documentation (e.g., Treasury Board Submissions, the program Terms and Conditions, the program Performance Measurement Strategy, websites, documents that describe the program’s rationale, history and theory);
   
• Departmental reports;⁴
   
• Program reports and files (e.g., departmental databases and website, regional files, regional quarterly status reports, performance reports); and
   
• Literature on needs and best practices related to women entrepreneurs.

File Review

WEI Organizations

The evaluation reviewed all information contained in the department’s databases (Project Gateway and the GX financial system) and all paper files on the WEI organizations between April 2008 and the time the file review was completed in June 2012. The Performance Measurement Strategy listed two sub-programs (formerly called sub-activities): 1) improve business productivity and 2) access to capital.

The WEI Organizations also received additional project-based funding to undertake activities (or projects) outside those covered under their operating funding. Four projects were approved between April 1, 2008, and June 2012, accounting for a total of $700,550 in departmental funding. Three of the projects, all approved for funding in April 2008, addressed the “Improve Business Productivity” sub-program and are now complete. The three complete projects included: 1) a one-day educational initiative targeting growth of women-owned businesses; 2) a “women’s business blaster” conference; and 3) the publication of “new pioneers” profile of 100 British Columbia women entrepreneurs. The fourth project, approved in March 2010, is still underway at the time of this evaluation and delivers a diversity certification and global supply chain access program for women entrepreneurs.

Comparative Analysis

The comparative analysis consisted of a literature review of similar programs and best practices in support of female entrepreneurs and input from formal evaluations or impact assessments. Specifically, the following sources contributed to the discussion of best practices and lessons learned:

• Best Practices for Women Entrepreneurs in Canada: “A sample of Canadian programs designed to support the establishment and growth of women-owned businesses in Canada”. The sample included eleven programs or agencies.⁵
   
• Best Practices in Supporting Women’s Entrepreneurship in the United States: A Compendium of Public and Private Sector Organizations and Initiatives: “Profiles 24 selected organizations or initiatives that provide outstanding support for women-owned businesses and that have a wide scope throughout the United states”.⁶
   
• Good Practices in the Promotion of Female Entrepreneurship: “Provides an overview of specific actions and support measures adopted by national administrations in the Member States of the European Union and the European Free Trade Association/European Economic Area countries in order to promote female entrepreneurship, particularly in the fields of start-up, funding, training, mentoring, information, advice and consultancy, and networking”. The overview consisted of 132 specific actions and support measures adopted by the European Union and the European Free Trade Association/European Economic Area.7
   
• Evaluation of the Atlantic Canada Opportunities Agency’s Entrepreneurship and Business Skills Development Program Sub-activity: This evaluation included several initiatives that support business skills development including the Women in Business Initiative.

• Impact Assesment of the Women’s Enterprise Initiative (2008).

Key Informant Interviews

The consultants developed and pre-tested the questionnaires and then conducted individual key informant interviews by telephone. Most key informants were selected based on their familiarity and level of involvement with the program. The consultants completed 28 key informant interviews including:

• four departmental staff and management (three regional managers and one manager from headquarters). Two of the participants had been involved in the WEI for almost 10 years. All eight departmental managers who were most involved and familiar with the program were contacted for interview;
   
• nine staff and board members of WEI organizations. Interviewees included the Chief Executive Officer and at least one randomly chosen board member from each region. All participants had been involved in the WEI for at least five years;
   
• nine representatives from the Western Canada Business Service Network. The participants were from all four regions and affiliated with the Canada Business Service Centres (three participants), the Community Futures Development Corporations (four participants), or the Francophone Economic Development Organizations (two participants). Interviewees were familiar with the WEI through working arrangements such as partnerships, shared space or referral of clients;
   
• two representatives of other government departments. One representative was from another federal department and one was provincial. Both participants were very familiar with the WEI.
   
• two funding partners. Both partners were chosen based on their familiarity with the program and involvement with the program; and
   
• two other representatives/experts in women’s entrepreneurship. Both were identified by departmental staff as being knowledgeable about the program and issues faced by women entrepreneurs in Canada.

Client Survey

Complete lists of names and contact information for clients receiving advisory or training services and loans were obtained from the WEI organizations. Although the list contained a total of 17,403 clients, contact information was inaccurate in some cases. The consultants successfully contacted 584 of the 649 loan clients on the list; 124 (21 percent) loan clients completed a survey. Of 2,000 randomly selected non-loan clients (500 from each province), 1,651 were contacted and 145 (8 percent) completed a survey. In total, 269 (12 percent) clients completed a survey; by province, response rates were 7 percent in Alberta, 11 percent in Saskatchewan, 12 percent in Manitoba and 16 percent in British Columbia. The questionnaire was pre-tested and then posted on a dedicated website. The questionnaire was also available for completion by email, fax or mail. To increase response rates, nonrespondents were followed up a minimum of three times by email and telephone; greater emphasis was placed on following up with loan clients because loans tend to increase economic activity more than other services such as training. We excluded clients making information requests because these were usually one-time contacts that lacked the depth of experience with WEI organizations necessary for an informed response.

The sample also included 22 clients representing businesses that were not approved for loans. Of businesses not approved for loans, eight responded to an online survey and 14 were interviewed by telephone. Nine businesses were from British Columbia, five were from Saskatchewan and four were from each of Alberta and Manitoba. The response rate for businesses that were not approved was 15 percent.

Focus Groups

The consultants conducted one focus group in each of the four regions in April 2013. The participants were selected based on their knowledge and involvement in the program and familiarity with respect to the needs of small and medium-sized enterprises in the region. In total, 39 representatives participated in the four focus groups including four departmental representatives, 16 representatives of WEI organizations (staff and board members), and 19 representatives of regional partners and other organizations. Each focus group contained between eight and 11 participants.

A consultant presented the field research findings at the focus groups and then facilitated group discussions. The objectives of the focus groups were to review and validate the preliminary findings.

Limitations of the Methodology

Case Studies

Case studies are nonprobability samples of projects chosen for indepth study for a particular purpose. This evaluation chose to forego case studies in favor of surveying a larger group of clients and conducting focus groups.

Key Informant Interviews

The responses of some interviewees may be biased. To minimize bias, we used skilled interviewers that: 1) communicated the purpose of the evaluation, its design and methodology, and strict confidentiality of responses clearly to participants; 2) conducted interviews by telephone; and 3) asked respondents to provide a rationale for their ratings including a description of specific activities. The findings of the interviews were further validated in focus groups. Also, half of the departmental interviewees were new to managing regional files and unfamiliar with program operations because of recent departmental changes to the management of the WEI. Departmental staff were therefore asked to speak more generally about the impact and anticipated challenges facing the program in their region. Finally, although most key informants were able to name other organizations and programs similar to the WEI, some had difficulties commenting on differences or similarities between the programs due to the lack of familiarity with particular services provided by these other organizations. In this instance, the interviewers reminded participants of the overall objectives of the WEI and other regional programs.

Proponent Interviews and Surveys

The completion rate for the survey varied across questions. The financial questions, particularly revenue questions (e.g., revenues generated by the business in the year before receiving assistance, revenues last year, or revenues in the current year) had the lowest response because clients hesitated to share financial data (particularly online) or could not recall financial data for past years. Of the 107 loan clients with currently active businesses, 74 provided full financial data (e.g., revenues, employment, wages and exports). Of the 67 non-loan clients with currently active businesses, 50 provided full financial data. There is also the potential for non-response error: clients who are currently operating, who received more significant services (e.g., larger loans) or who were more satisfied with the services may be more likely to respond to the survey. The consultants managed this challenge by following up with non-respondents including responses of those who were not approved for loans under the program. The loan clients who provided financial data are generally representative of the overall population of loan clients in terms of loan values; for example, these clients received an average of $61,378 in loans which is similar to the average loan amount of $56,498 provided by the four organizations over the past year. Furthermore, the financial data collected on loan clients is comparable to that collected during the 2008 impact assessment of the WEI, which included a larger survey of clients.

Focus Groups

The focus groups are used to validate and interpret evaluation findings. The focus group discussion reflects the opinion of participants and may not be representative of all those involved in the program.

Efficiency and Economy

Detailed costing information required to undertake a more comprehensive analysis of efficiency and economy was unavailable. For example, the department provides the WEI organizations with a block of funding to deliver services and loans; cost breakdowns by category of activity (service or loan) is unavailable. As a result, some of the observations are estimated or opinion-based.

Attribution

Measuring the program’s long term impacts on strengthening small and medium-sized enterprises or promoting greater gender equality is challenging because there is a myriad of factors working together towards these outcomes. This evaluation uses contribution-focused analysis to estimate the program’s contribution to its long term outcomes such as developing and diversifying the western Canadian economy.

Relevance

Continued Need for Programming

Females represent an important yet still under-represented segment of entrepreneurs. Of all small and medium-sized enterprises in Canada in 2007, approximately 16 percent were majority female owned and almost half had one or more female owners.⁸ These proportions were largely unchanged from 2001. Economically,“majority women-owned small and medium-sized enterprises represented over $117 billion per annum of economic activity in Canada.”⁹ In this context, programming that accommodates the needs and motives of women entrepreneurs supports economic development.

Western Canadians value and respect entrepreneurship and small business:¹⁰ 1) over 70 percent believe the economy is powered by entrepreneurs; 2) over 76 percent believe governments undervalue the contribution of entrepreneurs and small business in Canada; 3) over 97 percent believe small business is somewhat/very important to Canada’s future; and 4) over 93 percent believe small business is vital to their community. When given a list of institutions, western Canadians indicated the highest respect for farmers and small business.¹¹

Most research confirms that targeted programming effectively serves the needs of women entrepreneurs. Supporters of targeted programming highlight differences in needs of male and female entrepreneurs. A Canadian study involving the Woman’s Enterprise Initiative (WEI) concluded that further research into targeted programming is needed but “until then, gender-specific programs appear to mediate potential gender bias in SME training and policy interventions.”¹² More recently, another Canadian study¹³ of 212 clients of the Centre of Women in Business in Nova Scotia found that clients prefer women-focused small business training centres to other business advisory agencies because the targeted services meet their unique needs and motives. The 212 participants in the study were well educated, growth and export oriented, and from a wide range of industries, contradicting assumptions that women-focused small business programming attracts low yield businesses and marginalized clients. Furthermore, a recent evaluation that included Atlantic Canada Opportunities Agency’s Women in Business Initiative reported substantial evidence in support of the targetted programming approach.¹⁴ Most key informants perceive a strong need for programming that specifically targets women entrepreneurs. They argue that women continue to face challenges in accessing capital and growing their business, technical knowledge and skills, or confidence to expand their business. The WEI supports well established, trusted and credible organizations that are well-positioned to support women entrepreneurs and promote women in business. Most clients confirm the strong, continued need for targeted programming. Although critics claim targeted programming attracts low yield businesses and marginalized clients, WEI clients tend to have some post-secondary education and at least five years of experience in business management.

Evidence opposing targeted programming. There is little published research on the effectiveness of non-targetted programming in meeting the needs of female entrepreneurs. Furthermore, the little research that does exist may be biased in terms of, for example, sample selection.¹⁵ Some respondents were of the opinion that the need for targeted services has diminished because all entrepreneurs have the same needs, and new entrepreneurs face similar challenges regardless of their gender (e.g., lack of capital, difficulties accessing capital, lack of formal education and business knowledge, confidence to grow their business and economy). Furthermore, gender is unlikely to be a factor in the decision-making process for traditional lenders. Key informants who were strongly opposed to targeted programming claimed that treating women differently is unnecessary, and to some extent offensive, and may disadvantage them in a business world that is comprised of both men and women that can be intimidating regardless of gender. Furthermore, targeted programming makes partnership and collaboration with other organizations difficult.

Women’s Enterprise Initiative fills an important programming gap in western Canada. Seventy percent of key informants, including representatives of other sources of funding, recognize the uniqueness of the WEI in increasing the profile of women entrepreneurs, influencing public perception, and encouraging other women to start or grow their businesses. Although there are a number of organizations in Western Canada that offer programs with similar objectives to the WEI and many that provide similar services (e.g., loans, business consultations and information), they are often tailored to a distinct target group (e.g., youth, Aboriginal and French speaking entrepreneurs). Over half of all key informants noted that, in the absence of the WEI, there would be a significant lack of targeted programming for women including training, seminars, advisory services and financial assistance.

Clients stated that the program offers much needed counselling, mentoring and training services to women in a comfortable and supportive environment, as well as vital financial assistance. Many clients noted that it was financial, emotional and motivational support that they needed the most when starting and growing their businesses. In the absence of the WEI, clients perceived major program gaps in business support services, female-focused training programs and services and financial assistance for women entrepreneurs. Apart from financing, WEI services were the only business services received by 74 percent of clients. More than half (53 percent) of clients who received loans considered the prospects of obtaining financing elsewhere very unlikely.

About two-thirds of businesses that were not approved for a loan under the WEI reported obtaining financing from other sources; half obtained loans through commercial lenders or federal agencies. However, the majority of the respondents indicated that they reduced the scope of their business operation or delayed the establishment or development of their business because they did not receive WEI funding.

The focus of lending and services differs across regions and groups. The focus groups highlighted some regional differences in lending and services. In British Columbia, the Women’s Enterprise Centre has adopted a more traditional role in its lending activities, as it uses the same criteria as other funders such as banks. Becoming more risk averse, the WEI organization in British Columbia does not accept loan applications for riskier business ventures. Furthermore, women request more training opportunities to help them run and grow their businesses. Conversely, in Alberta, the organization has tried to reduce its lending activities and focus more on networking and promoting business and contract connections in an effort to encourage growth. The WEI organization in Saskatchewan has reported increased demands for services and loans for a variety of reasons. Saskatchewan takes advantage of partnerships with other organizations, participating in joint loans and extending loan referrals. However, Saskatchewan reports less participants in WEConnect¹⁶ compared to other regions. This lower WEConnect participation rate is also evident for the WEI organization in Manitoba. Despite this, Manitoba supports more start-up businesses and promotes business growth with the ‘My Gold Mine’ program for financial acumen training.

Alignment with Departmental and Federal Government Priorities

The WEI supports the department’s strategic outcome of developing and diversifying the western Canadian economy by creating a competitive, diversified business sector in western Canada. The program’s Performance Measurement Strategy states that the program aligns with the federal priorities as outlined in the Government of Canada’s “Advantage Canada: Building a Strong Economy for Canadians” document.¹⁷
 

Consistency with Federal Roles and Responsibilities

Government plays a key role in optimizing conditions for Canadian businesses and organizations to develop and grow. Growth-oriented start-up businesses create jobs and new industries, thereby increasing the prosperity and living standards of Canadians.

Over 90 percent of key informants indicated that the WEI is consistent with federal government roles and responsibilities. The Department’s mandate for economic diversification in Western Canada promotes equal economic opportunities for men and women and support for entrepreneurs. The objectives and activities of the WEI are perceived as consistent with the federal government’s agenda in Western Canada, although a few department representatives were unsure if the WEI remains a departmental priority. A few key informants indicated that the WEI is not consistent with federal roles and responsibilities because there is no clear need for such programming. They noted that the role of government is to foster diversification and not to support one group or special interest groups.

Performance: Achievement of Expected Outcomes

General Findings

Key informants indicated that the Women’s Enterprise Initiative (WEI) successfully achieved its intended outcomes, as evidenced by the growing number of women in business and women successful in business across Western Canada. The WEI organizations provide good service and have an excellent business model that is internationally recognized. Recently implemented initiatives (WEConnect and Excelerator program) are perceived by WEI organization staff and board members to have significant impact on promoting establishment and growth and increasing competitiveness and productivity of women-owned businesses. To the extent the WEI helps women grow their businesses and increase their revenues, it contributes to economic equality between men and women. Fifty-four percent of clients reported receiving more than one type of WEI service. Of the 269 clients who reported the type of services received, 49 percent received business information, 47 percent participated in a training program or seminar, 43 percent received a loan under the program and 36 percent received one-on-one business counselling. Clients reported a wide range of impacts including business creation and improved business practices and survival. Sixty-nine percent of the 96 loan clients that reported on business survival noted that the funding enabled their business to survive. Most non-loan clients indicated that the services were important to them in establishing or developing their business but not critical: clients estimated there was a 66 percent chance they would have developed their business to the extent they had without the program and 14 percent felt that the services had no or very little impact on the eventual development of the business. Over the long term, from the program’s inception in 1995 to 2011, the number of self-employed women showed substantial regional variation but increased 27 percent overall across western Canada.¹⁸

The survival rates of loan client businesses are high. When clients first approached the WEI organization, 32 percent were not operating a business but subsequently began operations; 90 percent of these were still operating while 10 percent ceased operations. Of 62 percent of clients who were operating a business at first contact with the WEI organization, 92 percent were still in operation and eight percent have ceased operating. Of the businesses surveyed that were currently operating, most have operated for four years or less and employ four or fewer people. WEI loan clients were more likely to generate revenues over $250,000 annually than non-loan clients and generate revenues from the export sales.

The program fostered establishment and development of non-loan client businesses. Of 165 clients who reported the current status of their business, 56 percent were operating businesses, 20 percent were still in the planning stages, seven percent had been planning to start a business but will not be proceeding, four percent had temporarily stopped operations and two percent had permanently ceased operations. Non-loan clients were most likely to participate in the training programs or seminars (45 percent). About 70 percent of clients were satisfied with services, noting that the staff in the WEI organizations had been very responsive to their needs and were professional and supportive. Clients were also satisfied with access to networking opportunities, training and business advising services.

Key informants indicated the WEI generated some unintended positive impacts such as increased awareness and understanding of the needs and challenges faced by women entrepreneurs. On the negative side, there was some competition with other service providers and a perception that women need special treatment, thus segregating them from the rest of the business community.

Program-specific factors that contributed to the success of the WEI include skilled and dedicated staff, the credibility of WEI organizations, their approach to design and delivery of services, departmental support and well-defined objectives and governance structures. Clients appreciated the readily available support, excellent website and variety of services (e.g., information, mentoring, training) offered. Factors which constrain the achievement of outcomes relate to limited resources, the short-term agreements with the department and low levels of leveraged funding. Clients listed constraining factors such as lack of access to services in particular communities, limited flexibility of the services particularly with respect to lending restrictions and limited staff expertise and understanding of particular types of businesses and industries. The most-commonly identified external factors that influenced the WEI and its success were the overall health of the economy, changes in government priorities and overall public recognition of the need and value of the services.

Performance Measurement

WEI Organizations

Each departmental regional office administers its own contribution agreement with its regional WEI organization. The organizations establish their own performance targets as part of their Annual Operating Plan. In addition, the organizations are subject to minimum performance standards in relation to the following activities: advisory services, information services, number of training sessions, number of clients trained, number of loans approved and dollar value of loans approved; targets for these indicators vary by organization. The department does not set minimum performance standards for business and job creation because they are outcomes of the program rather than activities the organizations are paid to do. The department reviews annual reports to determine whether the organizations are performing up to expectations and achieving their minimum performance standards. If an organization has not realized its minimum performance standards in a particular year, the department will follow up with the organization to investigate reasons for the shortfall and determine appropriate action. The annual reports revealed that the organizations rarely fell short of their minimum performance standards between April 2008 and April 2012. In fact, only one organization fell short of its loan targets for one year.

The WEI organizations also received supplemental funding to undertake four projects that were outside the scope of their usual activities. An investigation of these four projects (below) confirmed that the projects were outside the organizations’ usual activities (business services, skills/network development and access to capital) and therefore outside the scope of their core operating funding.

• Three projects are now complete. The total departmental funding for these projects was $156,550. The performance indicator was “client satisfaction” and all three achieved client satisfaction scores above 93 percent. The final reports indicated all three were over budget and could have been improved; however, their overall outcomes met expectations. Two of the projects had non-departmental sources of funding and requested 25 percent and 46 percent of funding from the department; these two projects would have proceeded without departmental assistance although one would have proceeded at reduced scope. The other project would not have proceeded without departmental assistance.
   
• One project was still underway at the time of this evaluation. The Access to Supply Chains Project addresses the “market/trade development” sub-activity; its expected result is increased participation in international markets and its performance indicator is “number of companies participating in export and market development initiatives”. This project would not have proceeded without departmental funding. This project addresses a different sub-activity than the WEI and fills an identified service gap in accessing large domestic and international supply chains that were previously inaccessible to women entrepreneurs in western Canada.

WEI Organization Outputs

The WEI organizations track their service and loan outputs in a database created using The Exceptional Assistant (TEA) software.¹⁹ Western Economic Diversification Canada (WD) accesses information contained in the program’s TEA database using a specially designed tool called the WD Performance Measurement Tool. The tool produces summaries of: 1) performance indicators: inputs, outputs and outcomes; and 2) Quarterly Investment Funds Indicators: number of loans and dollars committed, loan fund assets, cash on hand and net cash. The following analysis combines the four years of quarterly reports (from April 1, 2008 to March 31, 2012) that were available at the time of file review in June 2012. The WEI organizations supplied additional data on individual loan amounts and status, purpose of the loan (start up or expansion) and dates (original loan and maturity).

Tables 4.1 and 4.2 summarize key service and lending performance indicators from the quarterly reports. The values are averaged over the four study years and compared to corresponding averages over the five previous years (from April 2003 to March 2008) as reported in the Impact Assessment of the Women Enterprise Initiative (2008). ²⁰ Table 4.1 summarizes all but one of the service output indicators identified in the program’s Performance Measurement Strategy. One output indicator, number of website visits, was incomplete for 2003–08 and therefore is presented only for the 2008–12 period. Table 4.1 reveals substantial regional differences but no consistent regional trends in service outputs. For all regions combined, the largest decline was in average number of information services, down 67 percent from 2003–08 levels.

Table 4.2 contains a mixture of key loan outputs (number of loans approved) and outcomes identified in the program’s Performance Measurement Strategy. For all regions combined, the average amount leveraged increased 60 percent from 2003–08 to 2008–12 (Table 4.2).

* Denotes a percentage change of greater than 50 percent in the 2008–12 time period compared to the 2003–08 time period.

Value of Loan Funds and Loans Outstanding

Although Table 4.2 presents data on some of the loan output indicators, the Performance Measurement Strategy identifies additional indicators, which are presented below with their corresponding values for the 2008–12 time period:

• Dollars Loan Fund Outstanding: The total value of the loan fund as of March 31, 2012 was $20.4 million.
• Net Cash: As of March 31, 2012, each region had between $1.2 million and $1.7 million in available cash after subtracting loan commitments.
• Percent Loan Loss Measure: Ranged between 0 and 17 percent per year per region.
• Number of Loans Written Off: A total of 75 loans were written off between 2008 and 2012. Totals ranged from 24 (2008–09) to 13 (2009–10) to 18 (2010–11) to 20 (2011–12).
• Dollars of Loans Written Off: A total of $2.2 million of loan funds was written off, which was approximately nine percent of the value of the loans approved between 2008–12.

Individual loan amounts ranged from $2,000 to $150,000; the majority of loans in each region were for less than $50,000.

WEI Outcomes

The program’s immediate, intermediate and ultimate outcomes align with the department’s Business Development sub-programs, Business Development program and strategic outcome as outlined below.

Immediate Outcomes

The WEI addresses the two Business Development sub-programs:
1) Improve Business Productivity and 2) Access to Capital. The expected results, performance indicators and approach in measuring the performance indicators are summaried below.

1. Improve Business Productivity

This sub-program pertains to the WEI service activities. It supports western Canadian businesses, business service providers, industry and research organizations to undertake initiatives to enhance business productivity and competitiveness.

• Expected Result: Increase in small medium size enterprise competitiveness and productivity.
• Program Alignment Architecture indicators: dollar increase in sales, percent client satisfaction with business services provided, number of jobs created or maintained and number of businesses created, maintained or expanded.

Impacts

Thirty-five percent of non-loan clients believe the services will improve the competitiveness of their business. The following responses related to sales, jobs and business creation are based on a sample of 50 businesses currently operated by non-loan clients.

• Sales: The average projected revenues for the current year were $230,391; this is an increase of eight percent over the previous year.²¹
• Jobs: The 50 businesses employed a total of 222 people.
• Businesses created/maintained/expanded: Twenty-eight of the fifty businesses were established during the evaluation study period; five businesses had been in operation for one year and the remaining 23 had been in operation for two to four years.
• Client Satisfaction: Of 145 non-loan respondents, about 70 percent were satisfied with services noting that the staff at their regional WEI organization were very responsive to their needs, professional and supportive. Clients were also satisfied with access to networking opportunities, training and business advising services. Those who were less satisfied noted that there was lack of meaningful follow-up and communication after the first visit, the level of support was very limited, the staff were inexperienced and extra fees were charged for events and seminars.

Measurement Approach

All indicators corresponding to this sub-program are collected every five years during the evaluation. The disadvantages of this measurement approach are that the indicators are infrequently collected and sample-based. Arguably some of the indicators, particularly those corresponding to primary objectives of the program such as number of businesses created, maintained or expanded, should be captured on an ongoing basis in the TEA database. Currently, the information collected in the TEA database reflects loan activities because it is assumed that service clients eventually become loan clients. This assumption is not supported by the data collected for the evaluation, which showed that 23 percent of loan clients received non-loan services prior to their loan and an estimated one in every 85 clients who approached the WEI organizations for non-loan services went on to apply for and receive a loan.

2. Access to Capital

This sub-program pertains to the WEI loan activities. This subprogram improves access to risk capital for entrepreneurs and small business through financing and services offered in conjunction with other business services organizations and associations.

• Expected Result: Increased investment to targeted western Canadian firms.
• Program Alignment Architecture Indicators: Dollar increase in sales, number of businesses created, maintained or expanded, number of jobs created or maintained, dollars of capital funds provided and dollars leveraged.

Impacts

The following information on sales, business and job creation is based on a sample of 74 businesses currently operated by loan clients:

• Sales: The project revenues for the current fiscal year averaged $712,225; this is an increase of 16 percent over the previous year. Of this projected revenue amount, loan clients attributed 44 percent ($311,898) to the program.²²
• Businesses Created, Maintained or Expanded: About 41 of the 74 businesses were established during the study period: four businesses had been in operation for one year and 37 had been in operation for two to four years.
• Jobs: The 74 businesses employed a total of 429 people. There was an average of one employee for every $101,376 in revenues and the average wage was $19,044. Therefore, the $311,898 of company revenue attributable to the program created an average of 3.1 jobs and $53,324 in wages that are also attributable to the program.
• Loans approved, dollars leveraged, jobs and number of loans to new or existing businesses were extracted from the TEA database and summarized in Table 4.3.

Measurement Approach

Dollars increase in sales is collected every five years during the program evaluation. Number of businesses created/maintained/expanded is also collected during the program evaluation; however, it can also be estimated from the TEA database by adding the number of loans to new businesses and the number of loans to existing businesses. All other indicators are tracked in the TEA database and summarized in Table 4.1.

Intermediate Outcome

The Business Development program works with western Canadian businesses, industry and research organizations to undertake initiatives to enhance business productivity and competitiveness, support trade and investment attraction and penetration of western Canadian technologies, services and value-added products into international markets. Access to risk capital and business services for entrepreneurs and small business will also be improved through programs and services offered in conjunction with other business services organizations and associations.

• Expected Result: Strong women-owned and controlled small and medium-sized enterprises in Western Canada with improved capacity to remain competitive in the global marketplace.
• Performance Measurement Framework Indicators: Clients indicating improved business practices or entrepreneurship as a result of program support and clients indicating increased export capacity due to the program support.

Impacts

• Business Practices: Fifty-four percent (non-loan clients) and 43 percent (loan clients) indicated improved business practices as a result of program assistance. Over two-thirds of loan clients reported the assistance enabled their business to survive while about one-half of non-loan clients reported the services encouraged them to start their business and improve their business practices.
• Export Capacity: Sixteen percent (non-loan clients) to 18 percent (loan clients) reported that the program assistance had increased the export capacity of their business. About 20 percent of companies reported export sales. Non-loan clients reported generating about 8 percent of their revenues from export sales. This percentage is close to 30 percent amongst loan clients, although that is heavily influenced by two larger businesses which rely almost exclusively on the export market. Excluding these two companies, the percentage is less than 5 percent.

Measurement Approach

Both indicators collected through client survey during evaluation.

Ultimate Outcomes

The department’s strategic outcome is to develop and diversify the western Canadian economy. The WEI logic model identifies the following three ultimate outcomes of the WEI.

i. Establishment and growth of women-owned and controlled businesses

The Performance Measurement Framework indicates this will be assessed using annual Statistics Canada data on the percentage increase in women-owned and controlled businesses. Our consultation with a Statistics Canada analyst raised questions surrounding the availability of annual, timely data. Statistics Canada collects this information in the “Financing of Small and Medium Enterprises” survey conducted every 3 years. The two most recent surveys were conducted in 2007 and 2010, but the 2007 data had been released at the time of our data collection in the fall of 2012. Industry Canada²³ estimates the number of female small business entrepreneurs based on the number of self-employed women from the Statistics Canada Labour Survey;²⁴ however this approach would not work for the WEI because this data assesses another program outcome: “Greater self-employment and business development.” The fact that the same indicator can measure both outcomes suggests the two outcomes may be similar and one is redundant.

In the absence of an indicator, the literature supports the causal link between strong and competitive women-owned enterprises (the intermediate outcome) and the establishment and growth of women-owned and controlled businesses. Research shows that stronger firms are more likely to survive and grow over time and that the WEI may decrease business failure. Specifically, research confirms that, in comparison to the retail sector (annual failure rate of about 19.7 percent) and services sub-sector (annual failure rate of 15-27 percent) in Western Canada, there may be above average survival rates for WEI trained clients. Furthermore, “WEI loans saved firms from failure in approximately 33 percent of cases.”²⁵ Consistent with this research, this evaluation found eight percent of businesses had temporarily or permanently stopped operations and over two-thirds of loan clients reported that the assistance enabled their businesses to survive.

Data also shows that the establishment and growth of women-owned and controlled businesses contribute to economic development and diversification. “A 20 percent increase in total revenues among majority female-owned enterprises will contribute an additional $2 billion per annum to the Canadian economy.”²⁶

ii. Greater self-employment and business development

The Performance Measurement Framework indicates this will be measured using annual Statistics Canada data on percentage increase in self-employed women. Using Statistics Canada’s Labour Force Survey numbers from 2008–11, the number of self-employed women increased by five percent across Canada, with regional increases of three percent (Manitoba), seven percent (British Columbia), nine percent (Saskatchewan) and 10 percent (Alberta). In comparison, the number of self-employed males remained constant across Canada and in Saskatchewan while decreasing three percent to five percent in the other western provinces.

Over the long term, from the program’s inception (1995) to 2011, the number of self-employed women increased 36 percent across Canada and 27 percent across the four western provinces; by province there was a 10 percent decrease in Saskatchewan but increases of three percent (Manitoba), 22 percent (Alberta) and 52 percent (British Columbia). In comparison, the number of self-employed males increased 24 percent across Canada and 21 percent across the four western provinces; by region, percentages increased by 33 percent (British Columbia), 29 percent (Alberta) and three percent (Manitoba) but decreased 14 percent in Saskatchewan.

iii. Greater economic equality between men and women

The Performance Measurement Framework shows that an indicator is yet to be determined. Key informants had mixed opinions on gender equality as a program goal. Some felt that the program promotes economic gender equality by helping women start their own businesses, increasing economic activity among women, increasing awareness and the profile of women in business, and particularly by assisting them to expand and grow their businesses and increase their revenues. Others noted that this is not a goal of program and that systematic inequalities are too complex for a program such as WEI to have an impact. Twenty-nine percent of loan clients and 26 percent of non-loan clients perceived that the program addressed gender inequalities.

Key informants raise an important question as to whether economic gender equality is, or should be, a goal of the program. Economic gender equality is not clearly defined in the context of the program and the literature contains several different definitions. For example, economic gender equality can mean equal access to resources and economic opportunities such as loans. Some Canadian data show there is movement towards equality in this respect: “there appears to be little difference in access to credit between majority female-owned and majority male-owned firms.”²⁷

However, a more persistent and challenging economic gender gap derives from income and performance inequalities. Data indicate women do not attain the same level of economic success as men: in firms with growth intentions, the growth rate in total revenue in majority female-owned firms was 3.9 percent compared to 6.7 percent for majority male-owned firms (2004–08).²⁸ In new firms three years after their start date, the average revenue of a woman’s firm ($60,000) was about half that of a man’s firm ($120,000).²⁹ Reasons for the economic inequities are unclear and maybe be related to several factors including motivation for self employment.³⁰

Performance: Demonstration of Efficiency and Economy

Economy

Departmental representatives and WEI staff and board members were asked for their opinions on program economy. Most representatives indicated that the WEI is realizing outcomes at the least possible cost and producing good value for public money.

The department’s costs to undertake program management, monitoring and performance measurement activities are minimal. Departmental program staff conservatively estimated one full time equivalent department job is dedicated to the WEI activities.

The 2008 Audit of the Women’s Enterprise Initiative (WEI) found that the departmental processes are generally well organized and coordinated, the department demonstrates an appropriate level of due diligence in administration of the program, and the department monitors performance and financial reporting of the WEI organizations.

Each WEI organization used an average of 11 staff members, 178 volunteers and 315 partners in undertaking its activities.

Design of the Programming

The departmental respondents and WEI organization key informants were asked questions about program design and operations. They indicated that the WEI was appropriately designed, well structured and delivered. The WEI business model has been recognized internationally. Most clients believe that the program is designed appropriately, well-delivered and that good value is obtained with respect to the use of public funds.

Need for Additional Funding

At least half of key informants noted that the operational funding is not adequate to support future development of programming and needs for services. They suggested that WEI organizations should periodically reassess the needs of women entrepreneurs and gaps in services and customize their programming to evolving needs. There is a need for more funding to support in person delivery, provide loans and reach more people. The operating fund has not kept pace with the economy, impeding service delivery and technology upgrading, as well as contributing to high staff turnover within the WEI organizations.

Need for Supplemental Funding

The WEI organizations received supplemental funding to undertake four projects that were outside the scope of their usual activities. Two of the projects had significant non-Departmental funding and would have proceeded to some extent without Departmental funding. As part of the Access to Supply Chains Project, the WEConnect component has helped meet specific needs, particularly in Alberta and British Columbia, for programming required by successful women entrepreneurs ready to expand their business beyond local markets. However, it does not meet an on-going need for resources. The survey clients who had participated in the WEConnect component noted that the program had not yet had an impact on their business but might in the future; the clients noted that the connections made through the program had the potential to expand their market base and the confidence they gained from talking with other successful women would be helpful in further developing their business.

Efficiency

Most departmental representatives and WEI staff and board members indicated that the WEI is delivered in an efficient manner. The limited budget resulted in very lean and efficient operations. An extensive examination of efficiency would require more detailed costing information than is currently available.

Based on an examination of the performance data and perceptions of key informants and clients, the organizations are efficient in their programs and services to women entrepreneurs. The department reviews annual reports to determine whether the organizations are performing up to expectations and achieving their minimum performance standards. If an organization has not realized its minimum performance standards in a particular year, the department follows up with the organization to investigate reasons for the shortfall and determine appropriate action. The organizations rarely fell short of their minimum performance standards during the study period. In fact, only one organization fell short of its loan targets for one year. The outputs for the organizations, summarized in Tables 4.1 and 4.2, showed regions largely maintained their service and loan outputs over time. In terms of the department’s efficiency, at most one full time equivalent position supported the four WEI organizations that received total annual funding of $3,900,000.

The Initiative supported one job per $10,737 of loans and 5.3 jobs per loan

Tables 4.1 and 4.2 summarize the service outputs and lending performance attained by the WEI organizations for their annual funding of $3,900,000. Between 2008–12:

• The WEI organizations delivered, on average, a total of 5,983 business advisory services, 38,501 information services and approved 114 loans. More detailed costing information would be required to determine the precise cost to deliver loans or services.
   
• Disbursed loan amounts totaled $25,593,466. The average value of a loan approved per WEI organization ranged from $48,916 (British Columbia) to $60,109 (Alberta) and averaged $56,497.
   
• There were 453 loans totaling $25.6 million that created 2,384 jobs. This is equivalent to one job per $10,737 of loans disbursed and 5.3 jobs per loan, which compares favourably with the Canada Small Business Financing Program that created 2.5 jobs per loan.³¹ This also compares favourably with the department’s Community Futures Program which averaged one job per $13,688 of loans disbursed and 3.6 jobs per loan over the last five years (2008-12)³².

Cost-Effectiveness

When clients were asked how likely it is that they would have developed their business to the extent that they did in the absence of the program, average probabilities were 66 percent (non-loan clients) and 34 percent (loan clients). On an aggregate basis, the clients estimated that 44 percent of their current revenues would not have been generated in the absence of the support provided by the program. Costs to the department are low: one full time equivalent position comprises a very small proportion of the allocated annual funding.

Every dollar in loans disbursed leveraged $1.03 of non-departmental funding

Between April 2008 and April 2012, WEI organizations reported a total of $26.5 million leveraged, at the time of the loan, from non-departmental funding sources. The sum of the loan amounts disbursed by the WEI was $25.6 million. Therefore, every dollar in loans disbursed by the WEI organizations was matched by $1.03 of non-departmental funding at the time of the loan. This compares favourably with, for example, Atlantic Canada Opportunities Agency’s’s Women in Business Initiative that reported leveraging of $0.39.³³

Clients may leverage additional funding as time goes on. According to the loan clients surveyed, the loans they received (which averaged $61,378) represent about 26 percent of the $239,685 average total investment in these businesses. This means that $2.90 has been invested in the businesses for every $1.00 provided in WEI loans. Based on the reported revenue levels, the average revenue is equal to $2.97 for every $1.00 invested in the business or $11.60 for every $1.00 in WEI loan funds received.

Best Practices, Lessons Learned and Possible Improvements

The WEI is recognized as a “best practice” in providing research-based, cost-effective, “one-stop” support services to women entrepreneurs;³⁴ the first four of the following five lessons are highlighted in “Best Practices for Women Entrepreneurs in Canada”.

1) Support programs are often best managed by other female entrepreneurs.

The report noted that the WEI organizations “are run for women entrepreneurs by women entrepreneurs and that they operate their services in a highly cost-effective manner due to their non-profit nature. Both these factors have contributed to their overall success.”

Focus groups participants felt that engaging successful women entrepreneurs as mentors to work one-on-one with other women and promote the program’s services was an effective approach with regards to promotion and outreach strategies. More and more women are considering entrepreneurship, so promotional services for core programming and particular projects are crucial for success. For example, adequate resources to promote projects has contributed to the success of WEConnect, particularly in some regions such as Alberta and British Columbia.

2) Utilize existing resources and allow organizations the flexibility to tailor services to their particular regional needs.

The report stated that the WEI “has been so successful in Western Canada that women entrepreneurs across the country have specifically asked the federal government to establish programs across the rest of the country following a similar model, i.e., one that builds upon existing programs and resources and which has the autonomy to tailor services to the needs of the individual communities.”³⁵ Much of the international literature also acknowledges the importance of research and needs-based programming that targets services to the needs to women entrepreneurs.

In this evaluation, key informants suggested research-related improvements to the WEI including:

• Conducting research to better understand the markets served. The WEI organizations in Saskatchewan and Manitoba are engaging with academics to make better use of their research and share information regarding emerging needs, markets, trends and resources for their clients.
• Setting priorities for services that are responsive to regional needs. The WEI organizations in different regions serve clients with different needs, capacities and different market focus. The organizations should ensure that their services are responsive to the needs of the clients they serve and that funding is reallocated appropriately to develop needed services. In Manitoba, for example, Aboriginal women entrepreneurs are a major area of growth. In Alberta's strong economy, many successful and long-standing businesses desire to expand nationally or internationally. The level of regional participation in WEConnect may reflect those differences in needs, or interest in types of assistance the WEI has to offer (e.g., uptake of the program in Alberta and British Columbia was significantly higher than for clients in Saskatchewan and Manitoba).

Clients also had some service-related suggestions. There could be more outreach and promotion of services to increase diversity of businesses served and reach under-served segments of the target group (e.g., younger women, Aboriginal women). Also, ensure that services are responsive to the needs of all women entrepreneurs who are requiring assistance. For example, hiring more experienced business advisors who can work with growing businesses and those focusing on international trade while keeping the fees for seminars and training activities low for those that are starting up. WEConnect clients felt that their expectations could be better managed: getting certified or participating in the conferences and making initial contacts will not necessarily translate into increased export sales; they must stay engaged, continue to follow up with the contacts and make new connections. WEI organizations can continue to communicate with WEConnect participants and inform them of opportunities to network related to their field.

The focus groups reiterated the importance of conducting research to identify service needs and gaps, which may vary by region or area (e.g., urban/rural). Focus group participants noted a need to increase financial support to riskier business in British Columbia, while in Alberta, the WEI organization is trying to move away from lending programs and focus on growth, expansion and linking business to markets. Rural women entrepreneurs may benefit from different services (more start-ups, increased need for training, etc.) than their urban counterparts. Manitoba and Saskatchewan noted a strong need to promote programs and services for women, particularly those in rural areas. The environment in which the program operates has changed (e.g., new support organizations and networks for women have been created, women are more likely to be approved for funding by other sources of funding, they have more education and increased number of immigrant entrepreneurs in some regions,). This suggests that the program, with its limited resources, should identify service gaps and focus its programming accordingly. Through research, the program can better understand issues affecting female entrepreneurs, including the type of businesses women entrepreneurs are starting or trying to grow, the objectives of starting the business (e.g., for immigrants and rural women entrepreneurs), status of the business, the availability of funds and other supports.

3) Women entrepreneurs prefer support services operated and developed by other female entrepreneurs.

The fact that women entrepreneurs prefer support services operated by other female entrepreneurs is supported in the international literature as a means to maximize the relevance of the programming and provide role models.³⁶

4) Joint public-non-profit sector initiatives require sustainable core funding to operate effectively.

“Best Practices for Women Entrepreneurs in Canada” highlights the importance of sustainable support, which is also identified as a best practice in the international literature.

In this evaluation, key informants had the following suggestions for improving the funding aspects of the program:

• Shift to longer-term contracts with WEI organizations to facilitate better planning. Six key informants (including four WEI staff and two others) observed that the department has changed its contracting agreements with the WEI organizations from five year to only one year. This has affected planning and sustainability of services of the WEI organizations.
• Ensure the flexibility of operating funding to allow for reallocation of resources. Five key informants (including three WEI staff and two others) suggested that more flexibility in the operating budgets would allow the organizations to focus their services on meeting their regional priorities.
• Increase funding. Seven key informants (including four WEI staff and three others) noted a need for additional resources (department funding has remained the same since 2005) to ensure the consistency in staff and services, develop more programming and update technology.

Clients suggested improvements to funding and service access. They suggested that services should be more flexible by raising the limit on the amount of loans issued, easing the application requirements for loans, delivering more services online or making them otherwise more accessible to all clients (e.g., offering training and seminars at different times and locations).

The focus group participants indicated that WEI organizations have become more risk averse in issuing loans to businesses that are higher risk. The WEI organizations’ processes of approving loans is perceived to be very similar to other lenders, which creates a gap for financing of women entrepreneurs who cannot obtain loans from other sources. In terms of core funding, the focus group participants felt that core funding could be more flexible. The needs for financing, education, training and other core services still exits, to various degrees across the region; however, different economic environments, increased availability of organizations and services, types of women-owned businesses and limited funding available to WEI organizations may require them to focus their services to better respond to the needs of women entrepreneurs. To do this, more flexibility in the operating budget, including changing the performance measurements attached to the WD funding, will help organizations tailor the funding towards activities that are best suited for the needs of their regions.

5) Well-managed organizations and networking/partnerships with other programs and services create opportunities and reduce duplication.

Key informants suggested the following improvements related to collaboration and partnerships:

• Increase efforts to leverage funding from other government departments or potential funders. Some key informants recommended that the WEI organizations should apply for funding from other government departments (e.g., Status of Women).
• Partner with other organizations to share resources and expand the reach of services, particularly in more rural and remote regions where the WEI has very little reach.

The focus group participants also emphasized the importance of collaboration with organizations that provide similar services to create opportunities to leverage resources and to reach-out to underserved groups. In terms of maximizing the impact of services, an integrated approach or continued care is identified as most effective. Providing care to clients in developing their business plans and business ideas, providing loans and offering loan-care (e.g., training and networking) is viewed as the most effective approach in helping women achieve their goals. This approach also contributes to building the capacity of communities to grow and expand into new markets. To leverage resources and increase outreach to rural communities, WEI organizations should increase efforts to collaborate, develop referrals and better coordinate programming to avoid duplication and ensure that services are available to all women.

In terms of leveraging, the focus group participants indicated the department is generally the sole funder for all services, limiting the flexibility of services and programming. In Manitoba, there has been some effort to leverage funding from other sources including other federal departments (Status of Women) and the private sector (charging a fee for services). Other regions leveraged resources through partnerships with organizations that provide similar services to deliver training, seminars or other services. However, coordinated efforts to leverage funding from other sources (industries, other federal government) have been minimal. The department provides funding for operational and core services of WEI organizations. The challenge for the organizations is that departmental core funding is attached to certain performance measurements (e.g., number of clients served and number and value of loans issued) which limit the flexibility of the funding and the ability to develop programs that are more responsive to the needs of the women entrepreneurs. For example, there was a high demand for WEConnect in Alberta, where the need for increasing access to supply chains is high, and resources were available to promote the project. However, the organization was not able to continue the Initiative because the one time funding was not renewed and the WEI organizations’ operating budgets was not sufficient to do other programming apart from providing core services. Three key informants (including representatives from WD and other sources of assistance) observed that WEI organizations should increase efforts to leverage funding from other government departments, including the federal and provincial government, and the private sector. Focus group participants indicated there is a need to work with industry associations and sectors to identify the areas where the private sector would support programming for women entrepreneurs.

Conclusions and Recommendations

Conclusions

Combining results from all lines of evidence collected during this evaluation led to the following conclusions by core issue.

Relevance

The Women’s Enterprise Initiative (WEI) fills an important programming gap in Western Canada. Females are an under-represented segment of entrepreneurs. The literature and interviews confirm that targeted programming effectively serves the needs of women entrepreneurs. Although more gender-based analysis on non-targeted programming is needed to reach a definitive conclusion on this issue, studies show that targeted programming addresses the needs of female entrepreneurs.

Performance: Achievement of Expected Outcomes

The program achieved short term impacts such as increased revenues, jobs and business creation. Over the intermediate term, many clients reported improved business practices as a result of program assistance. The program also achieved, or is expected to achieve, two of its long term outcomes; its ability to contribute to its third ultimate outcome, economic gender equality, is difficult to measure. In terms of access to capital, evidence supports the program’s contribution to its expected result of increased investment to women-owned firms. Whether women entrepreneurs continue to face difficulties accessing capital in western Canada is unclear. Canadian data show almost equal access to credit for male-owned and female-owned firms. However, the clients indicated the loans were important: the loans enabled their business to survive and they would not have received funding elsewhere. Furthermore, businesses that were not funded under the program and found other sources of funding indicated they proceeded at reduced scope or with delays.

Performance: Demonstration of Efficiency and Economy

The WEI is recognized as a best practice in cost-effective, “one-stop” support services to women entrepreneurs. On average, per year (2008-12), the WEI organizations delivered a total of 5,983 business advisory services, 38,501 information services and approved 114 loans. A breakdown of costs to deliver loans or services would require more detailed costing information than is currently available. The WEI organizations disbursed a total of over $25 million in loans and created 2,384 jobs. This is equivalent to one job per $10,737 of loans disbursed and 5.3 jobs per loan (the Canada Small Business Financing Program created 2.5 jobs per loan). These numbers compare favourably with the department’s Community Futures Program which averaged one job per $13,688 of loans disbursed and 3.6 jobs per loan over the last five years (2008-12)³⁷. The Department’s annual contribution to the Community Futures program is $28.5 million. Value for money is determined by the extent to which the program demonstrates relevance and performance³⁸ and, based on this definition, the WEI is good value for money. The program is economical to administer, using at most one full time equivalent departmental position to support the WEI organizations which receive a total of $3.9 million in funding per year. However, the WEI organizations can improve in terms of collaboration and partnerships. To leverage resources and increase outreach to rural communities, WEI organizations should increase efforts to collaborate, develop referrals and better coordinate programming to avoid duplication and ensure that services are available to, and responsive to the needs of, all women.

Recommendations

Although the WEI business model is successful and widely recognized internationally, the program needs to evolve to most effectively support women entrepreneurs. If the program remains a departmental priority, the evaluation identified possible improvements to program design and delivery. The following recommendations are based on evidence gathered and conclusions discussed in this study:

1. The department should consider funding longer-term contribution agreements with Women’s Enterprise Initiative organizations to facilitate planning of services.
2. The department should work with the WEI organizations to continue to evolve and ensure the program continues to meet the needs of women entrepreneurs.

Evidence from the evaluation identified potential areas that could evolve the program including: changing performance measurements attached to department funding, supporting research to identify needs and increase public awareness of the services, encouraging partnerships with other programs and organizations and ensuring adequacy and flexibility of operating funding.