BR Newsletter

I have added another Stats Pack.  The difference between the  number  of entrants into vs. exits from entrepreneurship during the recent downturn was impressive!

The following topics are covered:

You can access this Stats Pack (2010-4) in HTML format on our Stats Link Canada web site.  A PDF version is available at the the bottom of the linked page.

For more details and data related to these highlights use the Stats Link Canada ID numbers identified in the Stats Pack.

Statistics Canada recently released an interesting report titled Self-employment in the downturn. It includes a number of data tables which allow you to examine the state of self-employment both pre- and post-recession. If your business assists new entrepreneurs like ours does, this report is a must read. It provides valuable insight into the changing face of self-employment in Canada.

As with previous downturns, self-employment increased as the economy faltered. Between October 2008 and October 2009 self-employment rose by 3.9% or by more than 115,000 individuals. This is significantly higher than the average annual growth over the previous decade which is around 22,800 (0.9%) .

While it is easy to jump to the conclusion that the increase is due entirely to the unemployed starting their own businesses, the data does not support this. First of all the demographic profile of Canadians who were laid-off differs from the major growth areas of self-employment. Younger men bore the brunt the economic downturn while the current self-employment surge is lead by women and older workers.

Secondly, individuals usually start businesses in industries where they have some experience. With the exception of the mining, quarrying, oil & gas, construction sector which was a significant contributor to both unemployment and new self-employment, the industry profile of those who were laid off in the downturn does not closely match the industries which saw the highest rates of new self-employment. New self-employment refers to business that started between April 2009 and October 2009. The greatest increases came in the professional, scientific and technical sector and the other services sector while the most lay-offs were in the manufacturing and wholesale trade sectors.

Finally, increases in unemployed have historically never translated into a direct surge in self-employment. The transition rate of unemployed to self-employed is typically only 5.0%. The final numbers for the transition rate in the current downturn will not be available for a few more months yet even the highest scenario would only translate into a 12% transition rate. At this level laid-off workers would account for just over a third of the newly self-employed.

The report concludes that recent unemployment in not the primary driver of the current self-employment surge rather other factors such as access to credit, potential earnings, and flexible working hours are of greater influence.

A word of advice when reading this report: make sure you have no distractions. My first attempt was at my daughter’s figure skating practice but I soon found the Glee soundtrack make it difficult to follow the precise language. Some sections talk about self-employment in October 2009 while others discuss the newly self-employed – those who started business between April 2009 and October 2009. If you do not pay attention to this you will find the discussion very confusing!

For other stats on self-employment and on the recession see our Stats Link Canada subject headings: Self-employment, Financial Crisis 2008.  (FREE TRIAL versions – Self-employment, Financial Crisis 2008)

Spring is the time to declutter and clean. More than half of Canadians do some sort of Spring Cleaning (Leger Marketing – Stats Link Canada ID# 39266661) with nearly a third starting on Easter week-end. (POLLARA – Stats Link Canada ID# 39261910). Fortunately for professional organizers and domestic cleaning services many of us are not particularly excited by these activities.

If you are thinking of starting a business in this area however do not read too much into the fact that Canadians would rather enjoy the weather than Spring Clean. Your target market is not every household.

Just because most households are cluttered and dirty after a long winter does not mean that they will hire you. Need and want are not enough. Households must also value your services. That means they are willing and able to pay!  When you are researching these types of businesses you need to identify this “paying” market in your local community.

There is no readily available source for local market expenditures on cleaning and decluttering. You therefore need to use national, provincial and metropolitan area data to first established a “paying” market profile. You can then compare the key characteristics of this profile to your local market demographics in order to determine market potential.

The best sources to start with for professional organizers are the Canadian and American industry associations: Professional Organizers in Canada and the National Organization of Professional Organizers.  As there is relatively little coverage on either side of the border it is instructive to look at both U.S. and Canadian data.

The U.S. data does not include many statistics. Rather it is a collection of lists on various market trends such as the top reasons professional organizers are hired, the top areas in a home where organizing services are most often requested and the top reasons organizing services are hired to organize companies or offices not home-based. You can access their organizer statistics at their web site.

The Canadian association meanwhile provides more statistical information on the state of disorganization in Canada. It is not pretty! Overall 80% of Canadian households are disorganized but it is the younger generation (18 to 34 years old) that is in the most disarray as 92% consider themselves disorganized.

The most insightful part of the Canadian study is where it identifies interest in working with a professional organizer. Only 27% of disorganized Canadians are interested in professional help. There are however some drivers which increase the likelihood of a hire such as gender, age group, presence of children and working Canadians. The results are available on the association web site.

For more information on Canadians and their to-do lists as well as their state of clutter see our Stats Link Canada subject heading: Professional Organizers

While there is definitely some crossover in market profiles there are also distinctions between those who are dirty vs. those who are disorganized! Yes I know we are all both but I mean in the sense of the “paying market”. For domestic cleaning services the best resource to start with is Statistics Canada’s Survey of Households Spending (SHS). It includes the specific expenditure category – Domestic and other custodial services.

You can access basic data from this survey namely the percentage of households reporting a purchase and their average annual expenditure on these services via CANSIM table 203-0004. If your require more information on CANSIM see our CANSIM primer.

The full SHS survey also includes segmentation by household income, household type (e.g. couple households with children, without children, one person households), as well as community size. By comparing these factors you can establish a profile of households more likely to report a purchase and to spend more on these services. Unfortunately, Stats Canada does not make these additional variables available through CANSIM. For more information on accessing full SHS data see our research guide on Household Spending.

A 2003 study based on the full SHS dataset identified a number of key drivers in this market.  One of the most important was households where the wife was the primary earner.  These households were twice as likely to hire help for household chores (Statistics Canada – Stats Link Canada ID# 39269743).

While this information is interesting it is only helpful if you can determine the number of households in your market that meet these criteria. Happily the Stats Can taxfiler database can help in this regard. This database can provide stats at a postal walk level – the route a letter carrier takes . Of course at this detail there is a charge.  The Stats Can retrieval fee starts at around $75.00. Contact me for more information if you would like to access this detail.

If your research budget is modest or non existent there is another option.  You can use CANSIM table 111-0021 to access the number of husband-wife families, by wife’s contribution to husband-wife employment income, by number of children and by age of wife for only $6 per time series.  The catch is the geographical detail is only available at a provincial and metropolitan area level.

For more insights into the housecleaning market see related Stats Link Canada subject headings: Housecleaning services, Housework and Work-Life Balance.

To identify the prevalence of other cleaning or decluttering market drivers in your local market such as age group, income, presence of children, hours spent on housework, the Census is your best option especially since it is free!  For more information on local Census data see our Research Guide on Census 2006.

Other local demographic resources (that will not break the bank) include the publication FP Markets available in most major libraries and business reference centres and the private data provider Superdemographics. Their lifestyle summary data can be accessed free of charge. Also do not forget to contact your local government. Sometimes they may have local demographic projections and profiles.

I hope this article is helpful.  Have a great holiday week-end whether you choose to search for dust bunnies or Easter eggs!

Free Trial versions of the subject headings referenced above: Professional Organizers, Housecleaning services, Housework and Work-Life Balance.