How newcomers can build a thriving business in Canada

posted on September 13, 2018

By Canadian Business |

What does it take to grow a successful company as an immigrant to Canada? Just ask the many Growth 500 leaders who came here to start their empires.

Niraj Sinha was at Shoppers Drug Mart when he found the perfect gifts to give to friends for Diwali: Quality Street tins containing an assortment of chocolates in jewel-coloured wrappers. However, he was surprised the tins had no festive packaging to celebrate the South Asian festival of lights. Over a million Canadians observe the holiday by exchanging colourful sweets, so it seemed like an obvious opportunity.

As the CEO of Maple Diversity Communications (2018 Growth 500: No. 79), a Mississauga, Ont.-based advertising agency targeting multicultural consumers, Sinha pitched the idea to Nestlé Canada in 2012. It was a hit. The resulting Diwali campaign proved so successful that it has run every year since, boosting Nestlé’s sales of the chocolates and garnering industry awards and exponential growth—more than 1,000 per cent in five years—for Maple Diversity.

Sinha was born in India and immigrated to Canada in 2005 with no network, no credit history and no idea how to run a business. You might would think that his success was an anomaly. Not so: Nearly a quarter of the founders on this year’s Growth 500 ranking were born outside of Canada. They’re proof that, with smart strategies and extraordinary perseverance, you can build a thriving business here no matter where you come from. In fact, you can turn your immigrant status into your competitive advantage.

Make connections first
Entrepreneurially driven newcomers often arrive in Canada with both vision and unwavering drive. It’s tempting to dive right into business ownership. But not so fast. It’s important to understand the industry you’re entering and establish some connections in Canada before you quit your day job.

Before Sinha launched Maple Diversity Communications, he managed the multicultural advertising department at Bell Mobility for three years. During that time, he dipped his feet in both the client and agency side, built relationships with key decision-makers, and learned the scope of potential opportunities. He only took the plunge when he was fully familiar with the competitive landscape in multicultural marketing and confident of the strength of the market. That patience paid off. Maple Diversity’s first project—a Chinese New Year campaign for Virgin Mobile—came easy thanks to Sinha’s insider knowledge of the Canadian telecom industry’s marketing needs. That campaign allowed the company to hire new employees and rent a small office. “If you want to buy a Subway location, you should work at a Subway to understand the business. You’ll be more confident and informed,” explains Sinha. “I don’t come from a business background. I had no one to tell me the dos and don’ts, so I had to do lots of self-learning.”

Be financially prudent
There’s a reason why so many immigrants are drawn toward entrepreneurship, says Yung Wu, the CEO of MaRS Discovery District, a non-profit innovation centre in Toronto (and an immigrant himself from Taiwan): “Immigrants don’t come here with much and they must do whatever they can to overcome challenges,” he says. “That’s the essence of what it is to be an entrepreneur.”

“Don’t come here with much” is key: Newcomers often lack cash and credit histories needed to get a business off the ground.To traditional lenders, a new Canadian with little to no assets could be seen as a risky investment. And while organizations such as the Business Development Bank of Canada (BDC) offer small loans specifically for such newcomers, the problem is far from solved: a recent Statistics Canada study found that 43 per cent of immigrant business owners had their applications for loans denied due to insufficient collateral, compared with just 25 per cent of their Canadian-born counterparts.

Sarbjit Sahota knows this challenge well. In the first six months of launching his Surrey, B.C.-based building materials company, Kasa Supply (No. 429), Sahota—who came to Canada from India before starting the company in 2007—faced a serious a cash-flow problem. So he offered his customers a discount of 2 to 5% if they paid within a week of material delivery, instead of the standard 30 days. Not every client was on board, but half liked the tradeoff enough to fork over the money. “We were able to reinvest that back into the business and expand our inventory,” says Sahota.

According to Dominik Loncar, the entrepreneur-in-residence at Futurpreneur Canada, a non-profit organization that helps young entrepreneurs, such rigour can be a differentiator: “Newcomers are forced to be financially prudent so they focus on the fundamentals, which is their product and their people.” And that is what makes businesses sustainable—especially early on.

Get government help
For all Canada’s entrepreneur-friendly pluses—open markets, robust labour force, strong economy—as a nation, we’re not exactly known for our lax bureaucracy. Navigating the various policies and processes required to get a successful business off the ground is hard enough for people who’ve lived here their entire lives; for those who are new, and who may also be juggling cash constraints, language barriers and cultural shock—it can be downright intimidating.

But attracting more immigrant entrepreneurs to the country has become a priority for governments and policy-makers at all levels, and help is out there. The government-funded Entrepreneurship Connections program, for instance, provides business planning, marketing and legal advice in several languages to newcomers who plan to start a business in Canada. “There are lots of wonderful resources for newcomers running a business,” says Futurpreneur’s Loncar, whose organization offers a two-year business mentoring program designed for new Canadians. “Tap into that as much as you can. Go out to events, pick up the phone, walk to your local library and ask them to point you in the right direction.”

Dong Liang She—who goes by the first name Eric—of Ottawa-based IT consultancy DLS Technology (No. 484) did just that. She emigrated to Canada from China before starting the business, and, once he was here, relied on government services such as the Ontario Centres of Excellence and the Industrial Research Assistance Program, which he says helped him to get funding, find talent and connect with industry experts. He also attended as many free seminars as he could on everything from how to register the business to how to navigate government procurement channels. She says that his use of these resources were key in DLS landing the Government of Canada as a client in 2007, which has resulted in a steady stream of large projects, including, most recently, the creation of a security device now used at Canadian embassies around the world.

Leverage your roots
Despite the barriers that befall foreign-born entrepreneurs, they have one thing that sets them above the rest: a deep awareness of the ins and outs of their home country. This is what Vadim Katcherovski calls his unfair advantage. “It’s something that you know or can do better than most people,” explains the CEO of Toronto-based software company Easy Projects (No. 337).

Because he was born in Belarus, Katcherovski knew the country’s IT scene was flourishing despite being under the international radar. Instead of hiring software developers in Toronto, he opened an office in his home country—where salaries are half the price—and hired more than 30 qualified employees to virtually work alongside his sales and marketing team in Toronto. “That was, and still is, our secret weapon,” he says. “I would not have been able to afford that level of talent here in Canada.”

Knowing how foreign markets work—and the specific opportunities within them—is a “game-changing” upper hand that’s more crucial than ever, says Wu: “The U.S. has been such an easy market to do business with that it has become the default. Now that things are becoming less predictable with our largest trading partner, many Canadians are realizing they don’t know how to do business outside of North America.” More proof of what Sinha has known all along: diversity can be a serious strength.

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