The small business owner raises their game when challenged, and we are all better for it.

‍By Stéphane Marceau, CEO, Driven (formerly Thinking Capital)

It may be contrarian to be bullish on Canadian small businesses after the last two extraordinarily challenging years. But we have conviction on it and are re-launching a new SMB fintech company, entirely betting on small biz owners.

Just as we’re moving into the third year of a pandemic, the entire world is now considering a bleak set of geo-political circumstances that only recently seemed unthinkable.

This is what inspired us to launch Driven, a new company, substantially different from, yet building on the established track record and fast-growth momentum of Thinking Capital. Over the past years, we’ve been listening to the owners we’ve supported day in and day out. The growth of our company is directly fuelled by the small business owner’s resilience, their resourcefulness, commitment and of course by their unparalleled “drive”. For some examples of this drive, see these real-life small biz stories on our website, where the owners we’ve worked with have generously and openly shared not just their successes, but their real struggles and challenges, so that fellow owners might learn from them too. You know how Nike celebrates athletes? Well, at Driven, we celebrate our heroes: small business owners and their teams.

Despite how conditions might look on the surface, a survey we commissioned last month via Angus Reid, shows that the small business owner is confident and eager to seize tomorrow’s opportunity.  From this original research with owners, it was great to witness the overwhelming sentiment that came back — one of optimism and firm belief in the future. Most small businesses feel optimistic about the next six months when it comes to the financial health of their business, with 37 per cent of owners anticipating real improvement in their financial situation in that time and 47 per cent expecting stability.

Before the pandemic, Thinking Capital was already known as a leading source of fast and flexible finance for small business, particularly those companies who faced challenges in getting the support they needed from the major banks. We try to be the partner that takes the risk with and makes the leap with the small business owner. We use a proprietary technology platform and we are systematic, and data-driven in how we fulfill our mission with our customers, but the spirit of our work is that we are there, and we take the risk to empower small business owners to achieve their goals.

The North Star of our transformation (over the last two years) into “Driven” has been about leveraging technology and the wisdom of our people to better serve and empower owners. We have been growing at near double digit every month in 2021. We have many and great Google reviews and our NPS is great at 53 (standardized measure of customer satisfaction).  Our team is investing in and fueling that strong momentum and recognition from our existing customers to empower many more entrepreneurs in the future.

The prospect of higher interest rates and inflation has become a reality. And that was the case even before the Russian invasion of Ukraine. We can’t talk away the superpower aggression with optimistic statistics. Economic impacts are already felt at the gas pump and if the energy crunch becomes more of a crisis, leading to increased costs all along the supply chain, once again small business owners will have to step up and adapt, re-invent how they serve their customers, find creative and resourceful ways to deal with adversity. From experience, we know they will find a way. Furthermore, we bet small businesses, most are active and weaved into our communities across the country, will help Canadians and their families weather the stormy period, and even thrive through it.

According to the Government of Canada’s latest statistics from the end of 2019, small businesses make up 98 percent of all employer businesses across the country, employing 9.7 million individuals. That’s about 64 per cent of the labour force. We all have close friends and family members who own or work with small businesses. It’s in these businesses that most of us got our first job, or where we learned the value of hard work and what it takes to be an entrepreneur first-hand.  The small business fabric of our communities permeates our daily lives and that of our families. Whether we realize it or not, we all really need them to prevail over these new recent head winds, just like they did during COVID.

1. Debt continues to pile up: Many of the small businesses that survived the pandemic still face a debt ratio challenge. According to a survey from the Canadian Federation of Independent Business, seven out of 10 small businesses took on debt due to the pandemic. The average Canadian business owes close to $177,000, and the CFIB estimates that small businesses collectively owed $139 billion because of the COVID-19 pandemic as of September2021. This debt load won’t disappear any time soon. I hope that federal and provincial governments do more to alleviate that debt load, and free up business owners to realize the true potential of this moment. In January, we were glad to see the Canada Revenue Agency extend its CEBA forgiveness deadline to the end of 2023, though it could probably be even more accommodating. 
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2. There are still too many entrepreneurs who should but can’t access the credit they need and deserve. For example, a 2021 Canadian study conducted by Abacus Data found that 76% of Black entrepreneurs said it was harder for them to succeed as entrepreneurs. It further noted that access to funding still remains one of the primary barriers to growth, with only 19% respondents saying they “trust banks to do what is right for them and their community”. The Driven team, itself diverse, is proud to be supporting small business across a large number of business categories and from all backgrounds.
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3. And in general, traditional financing is out of the question for large portion of SMB market. In reality, many, if not most of our customers simply cannot access financing from banks. Small business owners also struggle in dealing with traditional financial institutions, best equipped to serve their much larger enterprise clients and the large mass of consumers, which are in aggregate easier to serve at scale then small businesses. Small business owners do not have finance teams and need innovators in their corner that are entirely focused and dedicated to understanding them, who believe in their potential, and ultimately trust in their Drive.

Take Jean for example, Driven customer who owns a West Indian market and bakery in Mississauga.

She has seen her business thrive even in the face of rising costs and supply issues by being quick-footed about branching into new income streams including a take-out window with hot meals. And yet, because her multi-faceted business model seems unfamiliar to many banks, financing from traditional sources has been hard to come by despite her having been in business for 20 years. “What surprises me is the difficulty of getting financing from a regular bank,” Jean says. “That's something that has really eluded us over the years. It's why we rely mostly on partners like Driven.”

1. Supply chain issues have been mounting and small businesses do not have the same power and influence over suppliers as their large enterprise counterparts do. Consider one of our customers Francois, a portable energy entrepreneur from Ontario, whose innovative batteries are in high demand across multiple industries. “I used to be able to get things from overseas in five weeks at the absolute latest. Now the best-case scenario is 16 weeks,” he told us. “Because of how slow supply is moving these days, I need to purchase things four to six months down the road. And best-case scenario is I’m getting paid in month seven. That's a huge amount of stress on our cash flow.” 
2. Many small biz owners are struggling to find and keep talent, as companies navigate an ever-tightening labour market. For many Canadian workers the pandemic served as an opportunity to pause and reconsider career trajectories, switch professions, or generally seek a better life-work balance in the interests of their personal well-being. Whether suddenly forced to work from home for a prolonged period or delivering an in-person service through a thicket or necessary safety protocols, the new stresses and anxieties put upon both employees and owners has been enormous. Fortunately, our small business customers realize that prioritizing mental health initiatives for their team is one of the smartest investments they can make in employee retention.

How Driven steps up as a partner

Driven operates with the understanding that financial institutions should have to earn the trust of their customers, not the other way around. Entrepreneurs need to know they have someone that’s proud to be in their corner. We keep it simple, everything Driven does is dedicated to supporting and championing the needs and aspirations of Canadian small business owners. We feel our company and team values are supportive of our fulfilling our mission .

Here are some of our strategic priorities:

1. Facilitate access to simple and fast credit.

2. Put the power of data science in the hands of every small business owner.

3. Help small business owners keep up and even lead with new financial technologies

As the global business environment remains not just unpredictable but deeply worrying, we’ve challenged ourselves at Driven to get our tools and support products into the hands of Canadian small business owner, so they can focus on making informed decisions with the best information at hand. We can’t just assume people are fine and hope things get better — we need to hustle, like they have. 

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In short and as our new name suggests, we ought to be Driven, like the small business we serve. 

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