•ability to make things quickly and efficiently
•ratio of inputs (time, $$$) outputs (products/services)
•how many man-hours, $$ or tons of natural resources does it take to make stuff?
•Labour (a key factor of production) is under-utilised.
•Unemployment: People would like to work - but can't find work.
•The unemployed are people who are actively looking for work
•Prices for goods going up
•People can afford to buy less.
•Hurts people on fixed incomes (pensioners)
•Suggests: shortages of things people want
•Approximately 2.4 million businesses in Canada
•Canada is a market economy
oTherefore anyone may start a business without fees, or government permission
•Easy to start a small business and easy for a small business to fail.
•To be incorporated in the registry a business must have
oAt least 1 employee
oAnnual Sales revenues of at least $30,000 or be incorporated
•Small Business: (An owner-managed business with less than 100 employees)
oScale / Importance in Canada:
•The majority of businesses are small businesses (<100 employers)
•Annual contribution has been scaled at 25%
Failure and Success:
% that fail % that fail
Year (Canada) (USA)
2 39 40
5 64 60
10 80 90
New Venture/Firm: A recently formed commercial organization that produces goods/services for sale
•Entrepreneurs: (People who recognize and seize opportunities) are “Internals”
oAssemble and mobilize resources
oRisk tolerance-- assume risks to realize rewards
oRisk intolerance: New or previously unknown situations seen as threatening
oRisk Tolerance People see new or previously unknown situations as desirable
oHigh “Need for Achievement”
o“Needs Motivation” Theory (Three Basic Human Motivations)
1. Need for power (N-Pow)—need to lead
2. Need for affiliation (N-Aff)—need friendly relationships and interactions
with others, and need to be liked and held in high regard. Team players.