Program helps small businesses keep up in digital age

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Ask most small businesses and they will say government support for their struggling enterprises during the pandemic has generally fallen short.

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Opinion

Hey there, time traveller!
This article was published 17/02/2022 (286 days ago), so information in it may no longer be current.

Ask most small businesses and they will say government support for their struggling enterprises during the pandemic has generally fallen short.

But for the micro business and startup group, a little help will go much further than it can for larger companies.

The province’s Digital Manitoba Initiative, administered by the Manitoba Chamber of Commerce, is starting its second round of applications with about $8 million available to help mostly small and micro businesses to digitize their operations.

The program was launched in November — it has two streams, one for up to $5,000 and one for up to $25,000 — and it has been inundated with more than 1,000 applications.

The applications came from a broad cross section of the economy with the largest number from arts, entertainment and recreation (which includes operations like hair salons and gyms). The retail trade was the next largest at 12 per cent, but there were agricultural and transportation companies, as well.

Chuck Davidson, CEO of the Manitoba Chambers said there was plenty of scrutiny applied.

“This is government funds. It’s not our money,” he said.

Davidson and his team, led by Kay Gardiner, had to work their way through some underwhelming applications — one application that was rejected was to fund Apple watches for a company’s staff.

“We just couldn’t see how that would aid in a digital transformation,” he said.

But there have been plenty that will be truly transformative. Gardiner mentioned a hair salon whose older model iPads were no longer capable of handling the data inputs the salon now requires.

“We do think the money will make a difference to some. We’ve all sorts of testimonials from applicants who said the funds were a ‘godsend,’” Gardiner said.

While $5,000 does not necessarily buy a lot of technology, the goal of the program is that the applicant will also invest some of his or her own money.

“We definitely believe there is a multiplier at play, maybe in the order of two or three times the grant,” Davidson said

That program works on a smaller scale to the province’s Innovation Growth Fund which provides $100,000 in a more structured cost-sharing arrangement to assist Manitoba companies to innovate though it is not specifically targeted at digital operations.

It started just before the outbreak of COVID-19 but has served as an excellent tool for mostly small business and at least half of the 30 companies that have received the grants are new tech companies.

Since the pandemic began, 27 companies have been approved, with the anticipation that they will create more than 1,000 jobs over the next five years and about 450 over the next two years

Derek Hird, the owner of Evolution Wheel, just succeeded in accessing his second Innovation Growth Fund grant to speed up the R & D for the company’s growing portfolio of airless tires.

He’s been at it for about six years but in the last two years his company has grown from two to close to 20 employees.

“R & D and commercialization is hugely expensive,” he said. “To be able to go from concept stage to commercialization to where you can sell something takes lots of time and money. A program like this really shortens the window.”

Evolution Wheel may not be a tech company per se but its growth through the pandemic has been aided by modest input from public sector funding

Perhaps not surprising, there has been an influx of all kinds of startups in the past couple of years.

The business incubator/accelerator, North Forge Technology Exchange, has seen a more than 300 per cent increase in the numbers of companies that it’s working with over the course of the last couple of years.

Before the pandemic North Forge had about 35 companies in its roster. That number is now up to 124.

Joelle Foster, North Forge’s CEO, said that while many of the founders still struggle to find funding, for many of them the pandemic has not produced the same degree of frustration as might have been the case for established businesses.

“If anything, COVID has opened a lot of people’s eyes to take a look at tech,” she said. “It’s partly why we have seen such a massive increase in the number of companies that have come to us.”

Startups who targeted the hospitality industry, for instance, would have been affected, but overall, she said, they have been OK.

“The biggest concern or complaint I’ve heard from founders is that the co-working space is too quiet,” she said.

martin.cash@freepress.mb.ca

Martin Cash

Martin Cash
Reporter

Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.

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