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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 4.1 WEI Service Outputs by Region
April 2003 – March 2012
Region Fiscal Years Average annual number of business advisory services Average annual number of training sessions delivered Average annual number of clients trained Average annual number of information Services Average annual number of website visits
British Columbia 2003–08 1,942 77 1,785 8,089 -
2008–12 4,352* 63 966 4,493 269,000
Alberta 2003–08 1,810 103 1,022 18,671 -
2008–12 1,293 41* 820 2,301* 27,000
Saskatchewan 2003–08 1,501 97 754 2,171 -
2008–12 1,715 198* 1,286* 2,190 82,000
Manitoba 2003–08 730 74 779 9,563 -
2008–12 1,244* 135* 1,424* 3,720* 27,000
Total 2003–08 5,983 351 4,340 38,501 -
2008–12 8,603 436 4,496 12,703* Not applicable**

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

** Average would be skewed by the very large number for British Columbia and was therefore omitted.

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).

Table 4.2 WEI Lending Performance by Region
April 2003 – March 2012
Region Fiscal Year Average annual number of loans approved Average annual value of total loans approved (thousands) Average annual amount leveraged (thousands) Average annual number of jobs created Average annual number of business loans
New Existing
British Columbia 2003–08 21 $1,044 $1,002 96 12 9
2008–12 27 $1,308 $1,828* 123 13 14
Alberta 2003–08 25 $868 $904 85 16 9
2008–12 23 $1,382* $1,348 99 10 13
Saskatchewan 2003–08 40 $1,724 $1,472 139 21 19
2008–12 39 $2,292 $1,809 239* 17 23
Manitoba 2003–08 28 $949 $760 107 15 13
2008–12 24 $1,415 $1,628* 136 12 13
Total 2003–08 114 $4,588 $4,140 427 63 50
2008–12 113 $6,398 $6,614* 596 50 63

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

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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.
Table 4.3 Selected Loan Indicators by Region, April 2008–March 2012
Region Total of loans approved (thousands) Total dollars leveraged (thousands) Total number of jobs created Total number of business loans
New Existing
British Columbia $5,233 $7,314 493 50 57
Alberta $5,530 $5,394 394 39 53
Saskatchewan $9,168 $7,236 954 66 91
Manitoba $5,660 $6,512 543 46 51
Total $25,591 $26,456 2,384 201 252

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 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

 


[18] Statistics Canada Labour Force Survey estimates (Table 282-0012), available annually, 2008–11.

[19] The Exceptional Assistant software was created by CommonGoals software as a "complete client, business, project and loan management system specifically designed for microcredit lending agencies, including Community Futures and Business Development organizations. http://www.commongoals.com/faqs.cfm.

[20] Ference Weicker & Company Ltd. "Impact Assessment of the Women Enterprise Initiative." 2008.

[21] Note: the best information available was on revenues and we therefore reported revenues rather than sales.

[22] Note: the best information available was on revenues and we therefore reported revenues rather than sales.

[23]Key Small Business Statistics – July 2012”. Industry Canada. Accessed at: http://www.ic.gc.ca/eic/site/061.nsf/eng/02727.html#fnb10. Accessed September 10, 2012.

[24] Statistics Canada Labour Force Survey estimates (Table 282-0012), available annually, 2008 – 11.

[25] Orser B., Riding AL. “Gender-based Small Business Programming: The Case of the Women’s Enterprise Initiative”. Journal of Small Business and Enterpreneurship 19, 2 (2006): 143-166.

[26] The Canadian Taskforce for Women’s Business Growth. “Action Strategies to Support Women’s Enterprise Development”.

[27] Industry Canada: Small Business and Tourism Branch. “Small Business Financing Profiles” October 2010.

[28] Industry Canada. “Small Business Financing Profiles”. October, 2010.

[29] Ewing Marion Kauffman Foundation. “Overcoming the Gender Gap: Women Entrepreneurs as Economic Drivers”. September 2011.

[30] Hughes, K. “Exploring Motivation and Success Among Canadian Women Entrepreneurs”. Journal of Small Business and Entrepreneurship 19, 2, pp. 107-120. (2006).