Lecture 4-7

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15 Feb 2011
Small Businesses in Canada
Canada is a market economy
Anyone may start a business
oNo Fees
oNo government permission
Canadians Work in Small Businesses
10% are self employed, work alone
Nearly 25% work in businesses
Nearly 50% work in businesses
Small Business Failure Rates
Its easy to start a small business
Its easy for a small business to fail
Entrepreneurs: Personality TraitsThe people likely to become entrepreneurs
High Need for Achievement
oPsychologist David McClelland (1961) Needs Motivation Theory: 3 Ba.
Need for power (N-Pow)
People who are authority. They need to be influential. N-Pow
produces a need to lead. These people need personal status and
prestige. Profs Brother (like to be powerful, and influential)
Need for affiliation (N-Aff)
People who need friendly relationships, motivated by
interaction with others. N-Aff produces need to be liked, held in
high regard. Team Players.(high school teacher brother; hanging
out like others) (liked to be liked)Doctors, Nurses, High school
Teacher, Priest,
Need for Achievement (N-Ach)
People, who seek achievement, want to attain challenging goals.
N-Ach produces people who need accomplishment.(ex.Professor)
set goals for themselves and challenge themselves
oEntrepreneurs: seek challenges, set goals, take risks, have a very high Need
for Achievement
Internal locus of control
oLocus of Control
A persons belief abourt what cause good or bad results in his or her
The extent to which people believe that they can control events that
affect them
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oInternal Locus of control
People belief that events result from their own behaviour and actions
internal try to influence others
internals assume their efforts will succeed
oExternal Locus Of Control
People who believe that powerful others, fate, or chance determine events.
Less likely to: be leaders, take risks, start their own business
oEntrepreneurs are Internal locus of control:
recognise opportunities
Assemble and mobilise resources
Assume risk to realise rewards
Risk Tolerance
oRisk: Uncertainty of outcome
oPeople see risk: From new situations complexity or the unknown
oRisk Intolerance New or previously unknown situations see threatening
oRisk Tolerance: People see new pr previously unknown situation as desirable.
Self Confident
Vast majority of businesses start from scratch
Entrepreneurs: Demographics Traits
Kids of entrepreneurs
oEntreprenuuers in family: single most telling indicator of successful
o80% of entrepenuers have hertitage of family business
oImportance of Role Models (Nurture)
oGenetic Predisposition (nature)
Immigrants/kids of immigrants
oImmigrants/their children throught to make entrepreneurs
oImmigrants to Canada are economic migrants. Packed up lives, belongings
families, to improve economic well being
oThey need confidence,willingness, high need to achieve
Older than average worker
oWhy: it takes experience, confidence, contacts, and $$$ to start a business
oAverage age of starters: is increasing
Not great students
oEntreprenuers: doers not thinkers
oPerfer action to contemplation
Women more successful
oWomen starts business with fewer $$
oThey are more realistic
oBetter negotiators
oMen hav testorone
oThey take on more employees
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