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Chapter 7 Entrepreneurship and Starting a Small Business.docx

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Rita Cossa

Entrepreneurship and Starting a Small  Business The Age of the Entrepreneur   2.7 million people in Canada who are self-employed represent 15% of workers in the economy o More young people are venturing and starting their own businesses  Entrepreneurship o Accepting the challenge of starting and running a business/starting one o A person of very high aptitude who brings change, and has characteristics that are only found in a few people of the population How Entrepreneurships differ from Small Businesses  Amount of Wealth Creation o Not only replaces traditional employment for many, but creates excess amount of wealth  Speed of Wealth Creation o Often a rapid creation of wealth (may occur in a 5 year period)  Risk o Risk is very high for entrepreneurial ventures  Innovation o Key for remaining competitive beyond what a small business could expect  In production, customer service, technology, etc. Why People Take the Entrepreneurial Challenge  Leave the corporate life  Sudden inheritance that allows them to try something different  A change in health that needs them to refocus their career  A change in family responsibility requiring more income  Disliking supervisor to the point that they quit and start their own businesses Main Reasons  New idea, process, or product o Someone believes they can produce a better product at a lower cost than anybody else  Discovered a new way of doing things or a new technology that can reduce cost and price of product to become competitive  Independence o Many people enjoy working for themselves and not others  Challenge o Excitement from doing something that is new or difficult  Family Pattern o Some people grow with family members who started their own businesses and end up doing the same  Profit o The reward for a successful venture is massive  Immigrants o With no Canadian job experience, weak language skills, and difficult to find employment, but the passion to succeed many immigrants start their own ventures  Ex. Convenient stores What does it take to be an entrepreneur?   Self-Directed o Comfortable with being their own boss  Self-nurturing o Must believe in your own idea when other don’t  Action Oriented o Don’t just develop ideas, put them into effect  Highly Energetic o Must be emotionally and physically able to take on the large workload in order to succeed  Tolerant for Uncertainty o Risk always exists when starting a venture, make calculated risks but as well be able to take risks when needed  Able to learn quickly o Mistakes are unavoidable, it is best to learn from them fast Turning Your Passions and Problems into Opportunity  Many see their own passions and problems as a means to provide a good or service that will achieve their dreams o Ask yourself what can you never find and will be able to provide at an affordable price  Not all opportunities succeed, but they are a good opportunity when: o It fills a customers’ needs o You have the skills and resources to start a business o You can sell at a price customers are willing to pay and still make a profit o You keep the business going Female Entrepreneurs  Since the 90’s women entrepreneurship has grown more rapidly than men by 23% o Mostly in accommodation and good service industries  Some reasons as to why o Financial need: average real incomes have dropped and unemployment is fluctuating causing many to start their own businesses o Lack of promotion opportunities: sexism at the workplace causing women to take on their own challenges o Women Returning to the Workforce: Find that skills haven’t kept up to date and subtle age discrimination causing them to start their own ventures o Family and Personal Responsibility: Divorced or single mothers need to provide financially and still take care of family; start their own business at home o Public Awareness of Women in Business: More female entrepreneurs encourage other females to have the courage o Part Time Occupations: Have certain talents and want to try and profit from them on the side o Higher rate of success for women: Men are to brash and women tend to be more cautious and patient in terms of achieving results Entrepreneurial Teams  A group of experienced people from different areas of business who join together to form a managerial team with skills needed to develop and market a new product o The synergy can lead to a great start from the beginning and allow a stronger delegation of task Micropreneurs and Home Based Businesses  Not many want to grow their businesses to mammoth sizes because many wish to keep a balanced lifestyle o Smallest of small business are called micro-enterprises: Defined as having fewer than five employees  Micropreneurs o Small business owners with micro-enterprises but also remain small to keep a balanced lifestyle  Many are home-based businesses; mostly service producing sectors; 55% of all employed businesses are micro-enterprises  Home based business help cater to family needs as well as income o Computer Technology has levelled the competitive field allowing for more home based businesses through communication technologies o Corporate Downsizing: Precarious security for work has caused many to take on entrepreneurial ventures at home  Companies that lose these employees actually higher smaller companies to take on roles that are vacant o Change in Social Attitudes: Micro-enterprises are taken with esteem now more than ever  Challenges in starting a micro-enterprise o Getting new customers is difficult o Need discipline in managing time at home o Keeping work and family task separate o Abiding by City ordinances: City regulations based on if you can run a business at home o Managing risk: Damages to the house, etc. Web­Based Businesses  Small businesses compete with other small businesses as well as large web-based brick and mortar businesses o Canadians only spent $18 billion dollars or 3.4% of total retail sales online  This is far behind other countries like the US and UK  Must offer more than regular products that can be bought at store, unique products need to be provided so consumers for incentivized to buy online  Affiliate Marketing o Internet based marketing strategy in which a business rewards individuals or other businesses (affiliates) for each visitor or customer the affiliate sends to the website  Ex. Sharing Farmville on Facebook to get more coins  Sell will pay you commission  It may be easy to start up, but it can fail very easily as well Intrapreneurs  Creative people that work within corporations to use existing resources to launch new products Government Role in Encouraging Entrepreneurship   Canadian Business Network o Single point of access for federal and provincial/territorial government services, programs, business information and provide referrals to other government programs and regulations  Want to help Small and medium sized companies  Industry Canada’s SME Research and Statistics Site o Designed to encourage small-business researchers and policy analysts across Canada to share info  Extensive library on business literature  Incubators o Provide hands on assistance education, information technical and vital business support services, networking resources, financial advice, as well as advice on where to go to seek financial assistance  Increases the survival rate of smaller businesses  Government o Can encourage entrepreneurship by offering investment tax credits Starting a Business  The management style of a small business is also similar to the management style of medium or larger business o Demand capital goods, ideas, financial management, etc.  The Business Regis
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