Canadian vs. US Entrepreneurs

[David]

In the last 15 years I've consulted with 600+ marketing-type firms. About 15% of those have been in Canada, in every province, and about 75% have been in the US.

 

Anyway, I went over my client list recently and noticed a striking pattern: my Canadian clients are more serious about running a business well than my US clients, on average.

 

Sure, that's a fairly small sample size, but it's still interesting (to me, at least). They are more thoughtful about starting the business, they pay more attention to running it well, and they have fewer illusions about what will happen when they are no longer involved.

 

The US is a wonderful "land of opportunity," driving the world's economic engine (stil, even with our recent failures). But sometimes I think the "technicians who suffer an entrepreneurial seizure" (as Michael Gerber would say) don't quite realize how success depends on not just hard work, but smart decisions and discipline.

 

Most of my US clients are doing a terrific job running their businesses, but there are quite a few who really have no business being in business. Their little enterprise is more an extension of them, personally, built on some very undisciplined thinking. I don't see that as much in Canada.

[Ken H.]

So what differences to you attribute this to David? Longer-term thinking? Better business education, thus better business expertise? Better (or worse?) life balance / priorities? A more pro small-business environment? Better assistance for small businesses in Canada vs. the US? Other?

[tallman]

The really smart ones moved to Canada...

[BFish]

possibly less "real" opportunity in canada. less entrepreneurs and thus a more systematic, "businesslike" approach to running an enterprise. maybe not as much to fall back on should they not succeed. along with all of that the level of financial status on a personal level is not as important...not as many "jones" to keep up with.

 

just thinking out loud.

[John Ranalletta]

Did your DISC studies disclose significant differences?

[MikeRC]

David:

 

I probably don't have any credibility, but may I offer a couple of suggestions?

 

Those Canadian companies asking for a US consultant probably have a better business plan and more resources then ones who just seek local advice. They already compete on an international scale or are planning to. I've witnessed spectacular failures of local and home-grown businesses that even a doctor recognized as missing their target market, expanding too quickly or just using bad business practices.

 

Canadian Banks, Private Equity funds or Stock Markets may require more thorough business plans and performance updates.

 

Just off the top of my head.

 

Mike Cassidy

 

[motoguy128]

I think there might be more vairable to your comparison. Here's another thought... are your "most serious" clients farther away? Someone's that's more serious about their business will contact a consultant that lives further away...ie they seek out the best.... or they seek out the lowest bidder.

 

So which are you... really good or really cheap?

 

 

OTOH, I would tend to support a theory that those in the US are often 2nd or 3rd generation owners (read lazy, spoiled brats). The American small business dream often seems to be more about get rich easy and quick rather than work really hard for your sucess. Or perhaps some are more passionate about the business itself rather than running the business. I.e... a guy opens a bicycle shop because he loves bicyccles, not because he's a good business person.

[Whip]

I can't speak much to Canadian businesses, but I can give some input in what your are saying about American small businesses.

 

 

In my opinion there are two kinds of business people.

 

Those that believe you get money/rich by beating someone out of their money using all legal means necessary. Then saying business is business. I've had partners like this. We didn't last long.

 

The second group that I like to think I belong in feel that there is an infinite amount of money in the world and you don't need to beat someone out of anything to get your share. You just out work and out plan them.

 

I meet daily with people who all tell me they wish they had their own business. They all say I make it look so easy. Some of these same people have tried and failed. They all have someone to blame, few blame themselves. I have 2 location that have now been in business for coming up on 20 years. This year is gonna be our best year ever. These businesses are on Alamo Plaza within 200 yards of the Alamo. You might say to yourself, well that explains why I'm successful. That case could be made, but on the other hand here's a list of the businesses that have come and gone within the same 200 yards of the Alamo in the same 20 years.

 

Burger King

Wendy's

Pizza Hut

Subway

Taco Bell

Taco Cabana

Champions Sports Bar

Campus Life Styles

10 assorted gift shops

At least 5 other restaurants

 

Some of these failed because of other investments by the owners. Most have one thing in common. They were not owner operated. They were investments and the owners never worked. How else could you explain a Burger King or Wendy's(franchises) failing across the street from the Alamo. They started out with dreams of lots and lots of money and when it didn't happen fast enough they no longer were willing to put in the time. I have two other reasons for your experience. First arrogance... I don't know if it is taught in schools, or is something that people teach themselves. An unwillingness to realize what your doing isn't working and to re-tool or change your direction.(which should be an advantage of being a small business). Second...."the grass is always greener and materialism" both the same to me. The keeping up with the Jones stuff has always bothered me about our country. A lot of people like to tell me how good someone else is doing all the time instead of taking care of what is right in front of them.

 

 

I am always willing to try something new and I never worry about how much someone else has or what they're doing to make money. I try to keep my head in my businesses. I don't worry about last years figures if I feel we are doing everything we are supposed to be doing.

 

As far as Canada goes, I have only visited the western provinces. There doesn't seem to be as much crime. The people are more content. Not chasing their next victim to get money from. It may also have something to do with pride. There was a time in America that Bankruptcy was an embarrassing thing to be avoided no matter what. Now it's a tool of business. I got a feeling Canadians may have more pride and are taught a better work ethic. I really don't know...I'm just guessing.

 

 

For the record not all the businesses that have gone were small.

 

Walgreens

Woolworth

Foley's

Joske's

JC Penny's

Eckerds

Lord and Taylor

Gap for Kids

Dillards

 

 

Sorry for the rambling rant........I hope I didn't get too far from your question.

 

Whip

 

 

 

 

 

 

[bakerzdosen]

Aw come on Whip... Tell the truth: You've never worked a day of your life.

 

(Because it includes much of the night in addition to the day. )

 

I personally haven't wanted to be a small business owner for the simple fact that the reverse is usually true: The business owns you (if you want it to be successful.)

 

I pretty much subscribe to the same school of thought as Whip. Most small business owners I know don't take any sort of vacation for the first several years that they own the business as they just don't have the time. Once a business is well established, it affords the owner some freedoms. However, at that point, you have a choice: You can either relax or grow your business somehow (diversifying/improving is also growing in this context.) Growing requires more work whereas relaxing doesn't.

 

Back on David's topic, you simply reap what you sow IMHO.

 

There are SO many small businesses in the US because the environment has encouraged it. Fertile soil if you will. That fertile soil is also a prime environment for weeds. The weeds don't really last long, but they can indeed be a pest to the garden overall (economy). I just think that the environment in Canada is a bit harsher towards small business, so only the hardy businesses even make it "out of the ground."

 

So, although I've never wanted to own a small business, I'd love to own a large business. Maybe I'll take my next paycheck and buy GM or something.

[David]

So what differences to you attribute this to David? Longer-term thinking? Better business education, thus better business expertise? Better (or worse?) life balance / priorities? A more pro small-business environment? Better assistance for small businesses in Canada vs. the US? Other?

 

I really don't know, honestly. My guess is that there's a certain "entrepreneurial entitlement" that's crept into the US person's mind: "all I really need to do is follow my passion and the money will follow." That, coupled with easy credit, has left us with a fair number of idiots following their passion and starving to death.

[David]

Did your DISC studies disclose significant differences?

 

Slightly more D(ominance) and risk taking, but otherwise no significant differences.

[David]

Those Canadian companies asking for a US consultant probably have a better business plan and more resources then ones who just seek local advice. They already compete on an international scale or are planning to.

 

I can see that--the odds are already against them just a bit, and so they must do better at planning.

[David]

I think there might be more vairable to your comparison. Here's another thought... are your "most serious" clients farther away?

 

Nope. And the fee structure is the same regardless of location. Frankly, many of my Canadian clients are easier to get to than my US clients. Toronto vs. San Francisco, for instance.

 

Someone's that's more serious about their business will contact a consultant that lives further away...ie they seek out the best.... or they seek out the lowest bidder.

 

So which are you... really good or really cheap?

 

I'd like to think the former--I know for sure that the latter is not true. On top of that, the fees must be paid 100% 10 days in advance, and in US dollars, which (except for the recent odd blip) made it ridiculously expensive.

[David]

Interesting perspective, Whip. The businesses I serve are all "professional service" businesses which pretty much require that the owners participate, nearly full time. In fact I tell them that I will not work for them unless they do, because I know it'll fall.

 

But it's not retail, either, which in my mind requires a whole lot more skill and hard work than a professional service business. There are so many things out of your control that you really have to control the things you can (leverage, customer service, hiring, location, etc). My hat is off to any retail establishment and restaurant that makes it.

[David]

If you are positioning correctly, you can take a lot of time off and make a lot of money without being big. It's about making tough choices and paying as much attention to being an expert as actually doing the work.

 

I think one mistake many owners make is feeling like it will "all change" once I grow out of this awkward size that requires a lot of me. The truth is that they need to fix things at the current size or an increased size will bring even more pain.

 

But you're right--many people start a business because they want more control and freedom, only to wake up one day with less of both.

[quickshift]

"There are SO many small businesses in the US because the environment has encouraged it. Fertile soil if you will."

 

This became very apparent to me when I started my Ontario-based business four years ago (I'm sure the environment has changed a bit of late). Some of the equipment I use comes from the US, and I explored some financing options south of the border. There was a far more accommodating attitude towards financing a new business there than here. US lenders were far more ready to think outside the box than their Canadian counterparts. Circumstances led me to use money from local lenders, but there were far more hoops to jump through, and my business plan had to be far more comprehensive than what I had been asked for in the States. Hindsight being what it is, I'm glad it wasn't easy to get the support, as the process forced me to do a better job evaluating and setting up my business ideas.

[Urban Surfer]

In Canada you can generally pay more for any given product. There are much less people buying what ever. Also some one has been making lots of money, because of the oil, lumber etc. There is also the fact that the country was lacking in trade skills to meet the boom. Work on the infrastructure has taken off, because the government was flush with money. Many contractors came from overseas.

The combination of these circumstances made business easy in the last four of five years.

 

[Joel]

... built on some very undisciplined thinking.

 

I see a lot of that, too. And it isn't just technicians having entrepreneurial seizures. "It must not be very hard, right, because lots of people do it?" Well, lots of people play golf, too, but most of them do it poorly. A golf swing seems easy until you actually try it and have to be accountable for the results. Even then, an occasional 300-yard tee shot isn't enough to make a good round, let alone a career.

[yabadabapal]

Whip said it +1

I wish I could add to it but I think he said it all for me.

[John Ranalletta]

Certainly can't speak to why Canadians display those characteristics vs. their American counterparts, but in 2006 I wrote this letter to clients called "Random Thoughts". In it I wrote:

Some managers settle for being mediocre because it’s tough to be extraordinary which requires thought, study, practice and discipline.

Few of the companies with whom we work have documented strategic plans. The leader usually has a strategic plan in his/her head, but rarely is the plan definitive, complete and communicated daily to employees vis-a-vis their performance requirements. I would be interested to know if your Canadian clients are exceptions. The reason this is of interest is that the stereotypical personality profile of an entrepreneur (which DISC tells us is not so different) also tells us that will be their weakness.

 

One cannot understate the critical importance of being aware of one's strengths and weaknesses and the ability to discipline one's behaviors. Has it become too easy to be a "success" in the US - is it like the NHL where almost every team makes the playoffs?

[Nice n Easy Rider]

About 15 years ago I was out trying to raise another round of funding for a venture capital-based US startup (biotech). We must have visited 40-50 US venture funds but we only talked to two Canadian groups. There were just many, many more VC funds in the US than in Canada. For that reason I think the Canadian VCs were much more fastidious in their vetting of companies because they knew that they weren't going to have a lot of other brethren VCs to help them through the tight times. I also got the sense that the Canadian VCs actually wanted to build a company rather than just look for a quick exit strategy to make a quick buck. That difference in strategy leads to a completely different approach to investing.

[Francois_Dumas]

+2

 

I think Canada is more similar to many European countries in terms of starting and maintaining businesses. Most of my business partners are Canadian or live in Canada (not by my choice, just happened to turn out that way), and I hear those sentiments more often.

 

Also the 'easy credit' will no doubt have had a major influence in the US, just as it has had a major influence in turning our world upside down now.

 

When it is too easy to start a business, it is also easy to have it go belly-up, IMHO.

 

Mind you, most of us here are jealous about some of the obvious advantages the US has for company starters and owners. We are VERY restricted in many things here, not the least in getting funding.

 

On the other hand, looking at what's happening today, hearing that only 8% of all US workers do NOT have money problems, seeing the troubles with stocks..... maybe we're better of after all.

 

I fully agree on the owner working a company. Most of the faceless corporations nowadays are just there to raise more stock money the next day... for their stock holders and managers.... NOT to produce great products and above all services to their paying customers. I think a company should stay in touch with its customers very closely, or fail ultimately.

[rocks]

I currently work for a Canadian owned company, prior to that the same company was owned by a US based company. The most striking difference in top management thinking was the difference in long term planning. With our Canadian owners long term is 15-20 years... when we under US control it was closer to 6 months!!!