Print Story - canada.com network

Fewer entrepreneurs are setting up new businesses in Ottawa, = but=20 startups and new companies are generating a lot more jobs, = according to a=20 survey by the Entrepreneurship Centre.

The small-business centre, part of the Ottawa Centre for = Research and=20 Innovation, estimates that companies that used its services in = 2004=20 generated 7,833 jobs in the following 12 months. Their collective=20 operations reached annual sales of $541 million this year.

That was up dramatically from 5,402 jobs and sales of $284 = million from=20 new businesses surveyed last year.

The increases are related to two significant changes among=20 entrepreneurs who come for help, said Stephen Daze, the centres = executive=20 director.

"One ... people are starting to build bigger companies right = off the=20 bat and two, we're starting to see existing companies come in for = help and=20 build larger companies," he said yesterday.

The centre, which gets both public- and private-sector support, = offers=20 services from businesses information and resources to seminars and = individual consultations or mentoring for startups or existing = businesses.=20 Its main office is in City Hall. The yearly report it released = yesterday=20 tracked business trends by surveying clients who used its services = in 2004=20 about their operations 12 months later.

Of the 3,880 individuals who used the centre last year, the = survey=20 found that nearly 2,450 had started or were in business one year = later.=20 Last year's survey found 4,230 individuals sought centre services = in 2003,=20 which resulted in 2,920 businesses operating in 2004.

One of the most surprising findings in this year's report was = the=20 number of businesses -- 44 per cent -- that grew large enough to = hire=20 employees, said Mr. Daze. The average was five employees in = addition to=20 the owner.

The report does not break down how many of those companies were = startups and how many were existing companies that sought help = moving to=20 the next level. But Mr. Daze said the job creation wasn't a result = of=20 skewed numbers from one or two larger companies because those were = removed=20 from the survey. The report shows the importance of job generation = by=20 small businesses, he said.

"Almost half of the people in business were hiring other = employees.=20 That is a market that is often overlooked, but it is incredibly=20 important."

In Ontario, about 75 per cent of businesses have fewer than 20=20 employees.

Among other findings, the report said clients raised about $205 = million=20 in new investment. As was the case last year, the lion's share of=20 financing -- 85 per cent -- came from the entrepreneur and friends = and=20 family, but 48 per cent of entrepreneurs had bank loans or credit = card=20 financing (up from 26 per cent in the previous survey). Financing = from=20 angels or private investors provided only two per cent of funds, = down from=20 14 per cent in the 2004 survey.

Technology-related business, which has accounted for 30 to 40 = per cent=20 of new businesses for at least the past four years, was again the = most=20 popular. That sector accounted for 30 per cent of the 2,448 = businesses=20 surveyed. Arts and entertainment represented 15 per cent of = businesses.=20 The remaining sectors were split among 12 other business = categories.