ADMS 1000 Lecture Notes - Lecture 12: Small Business, Environment Of Canada, Unemployment Benefits
8 Feb 2017
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SMALL BUSINESS & ENTREPRENEURSHIP IN CANADA
What is the significance of studying entrepreneurship and small business?
• one million small businesses in Canada
• More than seven million Canadians employed by them, start-ups and small business are
the backbone of our economy.
• 98 percent of Canadian businesses have between [only] 1 and 99 employees.
• Small businesses account for $68-billion in exports making up 25 percent of Canada's
total export value
➢ Similarities between Entrepreneurship and Small businesses:
-take risks
-recognizing opportunities
-profit making
➢ Why is it important to define size of business?
-to benchmark against your competitors (eg, salary survey- need to determine to pay fairly and so
they go to their competitors and look at data for other small, medium or large businesses)
-To determine the companies eligibility for government incentive
-to determine the organizations need to comply with legislation
➢ Differences between Entrepreneurship and Small businesses:
-Entrepreneurs want to grow big but small businesses want to stay at the same level
Defining “small business”
• Here is the Government of Canada’s definition for small, medium and large business:
• 1. Small Business has 1 to 99 paid employees.
• 2. A medium-sized business has 100 to 499 paid employees.
• 3. A large business has 500 or more paid employees.2
• Canada is second only to the U.S. in levels of entrepreneurial activity- ahead of most G7
countries and much of the developed world. About 13 % of the working-age population
involved in early-stage entrepreneurial activity, "The Canadian environment and culture
for entrepreneurship is healthy.
• Entrepreneurship is seen as a good career for which opportunities exist within the
capacities of a large segment of the population". 19
➢ We as a nation are very entrepreneurial
➢ Why does small business flourish (start up and do well) in Canada?
-government funding which is encouraging
-changing generational preferences
-changing attitudes to entrepreneurial activity
-we have a good social system in Canada (education is free, welfare, employment insurance-
safety net so they have time to think about other things)
➢ Small business
-service sector (health care, retail, counseling, construction –can be low level or high level jobs)
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-at least 50% of businesses in Canada are service sectors
-small business employ more people
➢ Large businesses
-financial services
-manufacturing
-capital intensive
-9.7% of our business in Canada are large business
-large business make more GDP
➢ Medium Business
-20% of our business in Canada are medium business
*numbers are employment by sizes*
Women VS Men
• The number of self-employed men is more than triple the number of self-employed
women,
• women are increasingly joining the ranks of small business operators. Between 1989 and
1997, the number of self-employed women increased over forty percent.
• In 2014, about 15 % of SMEs were majority owned by women and almost 30% were
equally owned by women and men.
• The increase in the number of women creating businesses is a significant change in
workforce composition and is perceived to be driven by job dissatisfaction and those
benefits of entrepreneurship that relate to balancing one's personal and business lives.
Women also look to entrepreneurship to avoid the glass ceiling. With women occupying
less than 20% of the top jobs in corporations, many are betting that the only way to be
president of a company is to start their own.20
➢ Why the rise in female small business/entrepreneurship
-Women have become dissatisfied with traditional corporate culture (flexibility/Work life
balance) --) women has to either decide to give up her job if she has kids or be single and not
have children because males don’t want to stay home and take that load because of this social
stigma
➢ women are much better off economically because of education
➢ women find it hard to work under someone, they will start their own business because
they find that that might be more flexible
THE ECONOMIC CONTRIBUTIONS OF SMALL BUSINESS
• Employment
• Information Technology
• Job Creation
• Innovation & Competitiveness
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Employment
In 2015, the Canadian private sector employed over 11.6 million people. Small businesses
employed over 8.2 million individuals in Canada (70.5 % of the total private labour force Larger
firms tend to dominate in capital intensive industries such as financial services,
telecommunications, pharmaceuticals and aircraft manufacturing. These industries tend to
present barriers to entry that smaller firms cannot overcome. Instead, small business is growing
most rapidly in the services industry, with business services such as consulting, showing the
greatest rate of growth. It should also be noted that small business activity, while present in all
province and territories, is highest in British Columbia, followed by Alberta and Ontario.5a
➢ In 2015, small businesses employed 70% of the labor force
Information technology
Canada’s Information and Communications Technologies (ICT) sector has over 36,000
companies in the Canadian with the majority (over 32,000 companies) operating within the
software and computer services industries. It is interesting to note that the ICT sector consists
mainly of small companies – over 31,000 of those companies have fewer than 10 employees. On
the other hand, there are far less large companies (about 120) in this sector. Those large
companies operate mostly in the manufacturing sub-sector and include those firms with over 500
employees, including subsidiaries of foreign multinational corporations5b
➢ Mostly small business
Job Creation
In terms of job creation, small businesses create a vastly disproportionate share of net new jobs.
over 50% of the Canada's gross domestic product (GDP)
almost 90% of the private-sector labour force
over three-quarters of the new jobs created in the past decade.7
➢ Small business contribute 30% to each province
Innovation & Competitiveness
Observers recognize that as new business ventures arise there is an opportunity for innovation to
occur.
➢ To start a business you need a good idea
➢ In 2014, the highest number of innovations were in manufacturing, professional,
scientific services and wholesale
➢ Between 2011-2013 small business accounted for 27% of R & D expenditures
THE ENTREPRENEURIAL PROFILE
• Are entrepreneurs born or are they made?
➢ Personality traits are born with and skills are learned and formed
• Traits Commonly Associated with Entrepreneurs
• ENTREPRENEURS ARE…
• Self Confident • Positive
• Organized • Goal Oriented
• Experienced (do what you know) • Risk Takers
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find more resources at oneclass.com
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Document Summary
To benchmark against your competitors (eg, salary survey- need to determine to pay fairly and so they go to their competitors and look at data for other small, medium or large businesses) To determine the companies eligibility for government incentive. To determine the organizations need to comply with legislation. Entrepreneurs want to grow big but small businesses want to stay at the same level. Defining small business : here is the government of canada"s definition for small, medium and large business, 1. Small business has 1 to 99 paid employees: 2. A medium-sized business has 100 to 499 paid employees: 3. A large business has 500 or more paid employees. 2: canada is second only to the u. s. in levels of entrepreneurial activity- ahead of most g7 countries and much of the developed world. We as a nation are very entrepreneurial.
