Class Notes (1,100,000)
CA (630,000)
UTSC (30,000)
MGT (300)
MGTA01H3 (400)
Lecture

Textbook notes Ch.3-Understanding Entrepreneurship, Small Business and New Venture Creation


Department
Management (MGT)
Course Code
MGTA01H3
Professor
Chris Bovaird

This preview shows pages 1-3. to view the full 9 pages of the document.
1
CHAPTER 3 ± UNDERSTANDING ENTREPRENEURSHIP, SMALL BUSINESS
AND NEW VENTURE CREATION
Principle points:
Market Economies - easy to start a business
Æ sole proprietorship
Small business very important to Cdn. Economy
Æ number of business
Æ number of jobs
Æ job creation
Who starts new businesses [small business]: entrepreneur
Æ demographic characteristics
Æ psychological characteristics
Introduction
- Canada is free market economy.
- Generally, entrepreneurs have NO obligation to ask govt. permission to establish new
business.
- Generally: no fees payable, no forms to fill in [banks need permission]
- At simplest: to start a new business, just.... begin (380 new business everyday)
The New Venture Firm: a recently formed commercial organization that provides G+/S
for sale
criteria for firms coming into existence:
1) when it was formed
2) whether it was incorporated
3) sells G or S
- its new if become operation in last 12 months
Entrepreneurship: the process of identifying an opportunity in the market place and
accessing the recourses needed o capitalize on it
Entrepreneurs: Individual who organises and co-ordinates the activities required to start
a new business. Individuals who recognize and seize opportunities
(French: entrer: to enter prendre: to take)
- small business are usually independently owned and influenced by unpredictable market
forces
- provide an environment to use personal attributes (ex creativity) that have come to
associated with entrepreneurs
- entrepreneurs characteristics are everywhere: big companies, public/private sectors ect
Intrapreneurs: ppl who show entrepreneurial characteristics and create something new
within an existing large firm or organization
GLIILQWUDSUHQHXUVGRQ¶WKDYHWRFRQFHUQWKHPVHOYHVZLWKJHWWLQJWKHUHVRXUFHVQHHGed to
bring the new product to market since their employees provides the resources
- starting business involves dealing with: uncertainty, ambiguity, and unpredictability
www.notesolution.com

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

2
Who Starts A Business?
Entrepreneur: Individual who organises and co-ordinates the activities required to start
a new business
(French: entrer: to enter prendre: to take)
Entrepreneurs: Demographic Attributes [READ TEXT]
Children of entrepreneurs ("Pull" factors)
Immigrants/children of immigrants ("Push" factors)
Æ forced to start own business maybe cuz of no MBA degree
Between ages 30 - 40 (Managed risk)
Æ QHHGODERXUUDZPDWHULDOVDQGFDSLWDODQGSSOMXVWRXWRIXQLGRQ¶WKDYHDOOWKDW
Not academically inclined (Doers not thinkers)
- ppl of entrepreneurs but not good at skol
Women less likely to fail (Better risk managers)
- men make decisicions faster
Entrepreneurs: Personality Trait
High NAch (Need for Achievement)
Comfortable with uncertainty
Willingness to take calculated risks
Self Confidence (Self directed)
Internal locus of control
Three most common forms:
1. Sole Proprietorship
2. Partnership
3. Corporation
1. Sole Proprietorship: Business owned and operated by one person, who is personally
UHVSRQVLEOHIRUWKHEXVLQHVV¶GHEWV
- Easiest form of business organisation
- Most common form of business ownership
Advantages
Quick
Cheap (free)
Simple
Disadvantages
Personal liability
Unlimited liability
Business dies with owner
Small Business
small business: an owner-managed business with less than 100 employees
Experts agree: it's difficult to define "small business"
Definition in textbook has weaknesses:
"An independently owned and managed business that does not dominate its market."
But - what is "independently owned and operated"? Independent from who?
- Industry Canada is the main federal gov agency responsible for small business
[estimates 2.1 businesses/ impossible to know]
Æ reporting small business statistics rely one 2 sources
www.notesolution.com

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

3
1) Business register (tracks business)
2) labour force survey (tracks individuals)
x to be included in register: one paid employee, annual sales revenue $30 000 +, or
be incorporated
x goods business : 100 ± employee = small
x service : 50- = small
x Labour force survey use info from individuals to make estimates of employment
and unemployment levels
Æself-employed if working for own business even if unpaid
x Majority of business in Canada have no employees (owner) and not
incorporated
General Motors of Canada is independently owned by GM
"Not dominant": Sleeman has c. 8% share of Cdn. beer market. Is it a small
business?
THE ROLE OF SMALL AND NEW BUSINESS IN THE CANADIAN ECONOMY
- b4 1980, large business were the focus of attention in terms of economic impact within
industrialized nations
Small Business
- Close 98% of business in Canada are small
- 58% of all business established are in Ontario and Quebec
- Account for over 2/3 of employment in 4 industries: non-institutional health care,
construction industry, other services and accommodation and food
- Contribute 25% to GDP
Private sector: the part of the economy that is made up of companies and organizations
that are not owned or controlled by the gov
New ventures
- most growth occur in service producing sectors
- # of firms in high-knowledge industries (ex.high technology) nearly doubling
- more women are in work : 800 000 + women entrepreneurs and increase 3% APR
- a business counted new could have been operating for few yrs b4 being
statistically counted as a new business
THE ENTREPRENEURIAL PROCESS
- identify opportunity Æaccess the resources need to capitalize on it Æsocial, economic,
political, and technological factors in the broader environment will have an influence
Entrepreneurs (page 43 chart)
www.notesolution.com
You're Reading a Preview

Unlock to view full version