Chapter Five: Entrepreneurship and Small Business Management
1. What is Entrepreneurship?
- Strategic thinking and risk taking behaviour that results in the creation of new opportunities for individuals
2. Who are entrepreneurs?
a. Risk-taking individuals who take actions to pursue opportunities and situations others may fail to
recognize or may view as problems or threats.
b. They are founders of businesses that become large-scale enterprises.
c. People who: buy a local franchise outlet, open a small retail shop, or operate a self-employed service
3. Intrapreneurs: People who introduce a new product or operational change in an existing organizations –
example: Ken Kurtargi (Inventor of the Play station)
4. Changing conditions lead to entrepreneurial opportunities:
5. Typical entrepreneurial backgrounds and experiences:
a. Parents were entrepreneurs or self-employed
b. Families encourages responsibility, initiative, and independence
c. Have tried more than on business venture
d. Have relevant personal or career experience
e. Become entrepreneurs between 22 and 45 years of age
f. Have strong interests in creative production and enterprise control
g. Seek independence and sense of mastery
6. What are small and medium-sized businesses? (SME)
a. Small-sized business: for goods producing firms, with 100 or fewer employees; for service firms, with 50
or fewer employees, micro-enterprise fewer than 5 employees, 50% of private labour force works in
b. Medium –sized business: from 101 to 499 employees
7. How can they be established?
a. By starting a new business
b. Buying an existing business
c. Buying and running a franchise
8. 97% of small firms make up of all goods producing employer business in Canada.
9. 95% of small firms make up of all service producing employer business in Canada.
10. From 1991 – 2002:
a. Average number of new small/medium business set up every year: 135,000
b. Average number of small/medium business closing down: 127,000
c. Net average of new small/medium business every year: 8,000
11. Family businesses:
a. Owned and run by the family b. Largest percentage of businesses worldwide
c. Can provide an ideal business situation
d. Problems unique with family business: family business feud (occurs when family members have major