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Canada (511,348)
Administration (2,738)
ADM1100 (112)
Lecture

ADM 1100 Class 3.docx

4 Pages
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Department
Administration
Course Code
ADM1100
Professor
Patrick Woodcock

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Description
ADM 1100 Class 3 Small businesses: - Industry Canada identifies small businesses as fewer than 100 employees - 97% of businesses are small businesses - They account for 29% of the GDP - Creates new job opportunity - Tends to be very innovative - Big companies are buying small innovative firms Why small businesses fail: - Increasing amount of failure every year - 17% are successful after 4 year; 33% failures; 50% open - Managing inexperience or inadequate funding (inaccurate budget estimation) - The larger the business, the easier it is to deal with gov regulation - The more the business grows, the more it needs to have finance (to hire new salespple, to have larger services, etc.) Types of businesses (see book graph) : - Collective (Cooperatives) businesses are like a partnership but it is different because there is a limited liability (it acts like a partnership however) – gets credit unions, coops They can be very complex though - Franchise: there is a relationship between the franchiser and the franchisee of control – ownership over them • Canada has 76 000 individual franchises -- popularity due to the fact that the brand/ business is already established, recognisable, proven to work • But It is costly to have a franchise : royalty payments for every supply (you pay the franchiser an agreed upon rate for the supplies they sell you) or rate on revenues/ base rate for every year, you need to buy all of your supply, contract usually states that you must buy from the franchise business, they tell you what the design of the franchise will be / the location and the person must pay for those services/fees, franchise agreement restrictions (tells you when to clean, frequency of the visits for managers, how to train, etc.)—very restrictive and franchise can be taken at any time if the contract is broken • Must pay up front to buy a franchise store – must be very rich • WHY FRANCHISE? Many franchises start off as small businesses and they become franchises because as they grow bigger, giving every outlet a manager may cause to have some pple who don’t care of the business—hard to trust them with a store ; so by putting ownership, the person feels responsible of the good function of the business. It is also a way of expanding - Entrepreneurship : person who likes to grow, enjoys taking risks, responsibility, organising realisations and goals (even though can be abstract), use of resources • Classical entrepreneur: starts own business • Serial entrepreneurs: start businesses again and again (in succession) • Social entrepreneur: not motivated by $$ -- very passionate and invested in the idea and turns eventually into a business Entrepreneurs work the hardest – no support staff/ financial resources • Some opportunities for entrepreneurship: Global
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