Financial confidence and financial knowledge both inform financial readiness. This purpose-built diagnostic enables users to compare their small business financial knowledge against that of 1,000 small business owners and to identify opportunities to strengthen your financial knowledge and financial confidence. Understanding your financial readiness is important for several reasons.
Poor financial decisions are among the main reasons why Canadian SMEs fail. Financial decisions are enhanced by having the requisite financial knowledge and having the confidence to act on your financial knowledge.
When it comes to financial behaviors, such as budgeting or applying for commercial credit, financial confidence trumps financial knowledge. The Scotiabank Women InitiativeTM research indicates that women small business owners who express a need for capital, but who have relatively low financial confidence, are 60% less likely to apply for a loan compared to similar but otherwise financially confident women business owners.
Financial knowledge is also associated with the ability of small business owners to acquire and deploy capital, and to manage the finances of an enterprise. Our research found that most small business owners assess their overall level of financial knowledge as ‘Fairly Knowledgeable’ or ‘Knowledgeable.’ Only 20.4% of men small business owners and 12.4% of women small business owners assess themselves as ‘Very Knowledgeable.’
This learning aid guides you through a series of questions as you compare your responses with those of 1,000 small business owners across Canada. Your own insights will help uncover your level of financial knowledge, assess your financial confidence and help you discern how to strengthen your financial readiness.