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The case for side-hustling: Meet Canada’s newest business owners

Unexpected burst of entrepreneurship seems to defy year largely defined by grim economic fallout of COVID-19


By Brett Bundale

For Mike Livingstone, a pandemic-related job loss offered a chance to chase after a long-held dream. When he was laid off last spring, the transportation executive switched gears and became his own boss, following his passion and opening a bakery.

“We’d always wanted to have our own business, but the timing was never right,” he said in an interview. “Our kids were little and we just needed stability. But when I lost my job, it was a lot easier to take a risk because I didn’t have as much to lose.”

A rare silver lining has emerged a year into the COVID-19 pandemic that has otherwise caused widespread economic devastation.

As thousands of businesses shut down and millions of workers were laid off, some Canadians seized the opportunity to strike out on their own.

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According to Statistics Canada’s most recent data, the number of new business openings in November exceeded the number of business closures for the fifth month in a row.

The unexpected burst of entrepreneurship seems to defy a year largely defined by the grim economic fallout of rising infections and tightening restrictions.

For some, starting a business was a matter of necessity, a side-hustle to make ends meet and stay busy until the economy rebounded.

These could include opportunistic startups that took advantage of the so-called COVID-19 economy like cleaning services, homemade masks, online fitness and delivery services, said James Bowen, adjunct professor in the Telfer School of Management at the University of Ottawa.

While some will stick around, others will fade away with the novel coronavirus, he said.

“2020 accelerated some trends we’ve been seeing build up over time but it also changed a number of business models,” Bowen said. “The cost of entry has dropped and we see more people starting companies on the side, but the failure rate might be different as the economy and society has transitioned and is looking for a better future.”

Meanwhile, some new businesses were in the works even before the pandemic hit, while others — like Livingstone — found the crisis sharpened their focus on what they really wanted in life.

“We talked about what the future looked like for us and decided to make a change,” said Livingstone, now the owner of Cobs Bread Bakery in Georgetown, a community northwest of Toronto, along with his wife, Annie Hoare.

“This was a business opportunity but it was really about a passion.”

While it might seem unorthodox to open a new business while so many others went under, Livingstone is not alone.

Toronto cannabis retail store Forever Buds opened in January while the city was under lockdown.

“We could have stopped and waited until this was all over but with no end in sight, we decided to roll with the punches and move forward,” said Vish Joshi, the CEO of Forever Buds.

“It’s a bit of a downer that we couldn’t actually open our doors to customers for a grand opening. But we worked hard to create a buzz online.”

In Nova Scotia, Chanoey’s Pasta opened in June while COVID-19 restrictions were in place.

Catherine Paulino, co-owner of the Dartmouth restaurant along with her husband and chef Carl Mangali, said they had already leased a space and taken out loans and “couldn’t turn back.”

But the entrepreneurs had come up with a nearly pandemic-proof business, she said.

“We hit the jackpot with our business plan because we were focused on takeout anyways,” Paulino said. “We pay all our bills on time and we even take a day off a week now.”

While there are challenges to opening a business during a pandemic, she added that there are benefits too.

“We found some of the rates lower than we expected and we received some discounts on our (point-of-sale) system.”

Indeed, some real estate lease prices have dipped during the pandemic as sublets flood the market, while e-commerce and online ordering has thrived.

Yet the startup surge over the last year could be followed by a wave of closures post-pandemic, Bowen said.

“The failure rate is probably going to be higher for two reasons,” he said. “One is that there’s going to be people starting companies that don’t have the background.”

“The other is second-mover advantage and that is when somebody starts a business and demonstrates that there’s a market for something new, maybe it’s a niche market or an emerging market, and then an established big player … takes over.”