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BUS 201 (122)
Chapter 4

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Simon Fraser University
Business Administration
BUS 201
Maureen Fizzell

Chapter 4Entrepreneurship Small Business and New Venture CreationSmall BusinessMeasures of a small business the number of people the business employs the companys sales revenue the size of the investment required or the type of ownership structure the business has Industry Canada is the main federal government agency responsible for small businessThe government relies on two distance information for Canadian small business statisticsthe Business Register tracks businesses and the Labour Force Survey which tracks individuals to be included in the register at least one paid employee annual sales rev 30000 or more incorporatedgoodsproducing business in the Register is considered small if it has fewer than 100 employeesserviceproducing business is considered small if it has fewer than 50 employeesLabour Force Survey uses information from individuals to make estimates of employment and unemployment rate Industry Canada reports that there are 23 million business establishments in Canada and about 26 million people who are selfemployed an unincorporated business operated by a selfemployed person would not be counted among the 23 million businesses in the Register because the majority of businesses in Canada have no employees nor are they incorporated nascent entrepreneurs people who were trying to start a business over four years only 15 of those who reported establishing an operating business had incorporated their firmsmall business ownermanaged business with less than 100 employeesIndustry Canada estimates the percentage of small businesss contribution to Canadas GDP over the past decade at 26 percent annually Queens Centre for Business Venturing develops a ranking of the top 50 small and medium sized employers to work for superior employee recognition managing performance career opportunities and organizational reputation The New VentureFirmoDetermine when a new firm comes into existence incorporated sold goods and or services when it was formedoNew Venturea recently formed commercial organization that provides goods andor services for saleEntrepreneurshipoEntrepreneurship process of identifying an opportunity in the marketplace and accessing the resources needed to capitalize on itopeople start new businesses bc they want to control their own destiny and prefer to take a chance rather than looking for a secure joboEntrepreneurs a business person who accepts both the risks and the opportunities involved in creating and operating a new business ventureoHeritage Foundation publishes an index of economic freedom helps the extent to which entrepreneurs have freedom to pursue new business opportunities otop three countries 2010 Hong Kong Singapore and Australiaosmall businesses often provide an environment to use personal attributes creativity that have come to be associated with entrepreneurs oIntrapreneurs People who create something new within an existing large firm or organizationoDifference between intrapreneurs and entrepreneurs is that intrapreneurs typically dont have to concern themselves with getting the resources needed to bring the new product to market since big companies tend to have the necessary resources already available The Role of Small and New Businesses in the Canadian EconomySmall Businesseso978 businesses in Canada are small and more than half of them have fewer than 5 employeesoMediumsized businesses 100499 employees comprise 19 of employer businessesoLargesized businesses more than 500 employees represent just 03osmall businesses provide more jobs than large businesses because it leads the way when it comes to innovation and new technology oAccording to Statistics Canada there were 10901100 private sector employees in 2010oPrivate Sector part of the economy that is made up of companies and organizations that are not owned or controlled by the government oSmall businesses account for over 23 of employment in noninstitutional health care 90 construction industry 77 other services 73 and accommodation and food 69oanother five industries at least half of the workforce is employed by small businessesNew Venturesonew firms are not only the main source of job creation they rae also responsible for the vast majority of new products and servicesowoman now account for half of all new businesses that are formedo877000 women entrepreneurs in Canada and 47 of small and medium sized enterprises have some degree of female ownershipoHowever women lead only 12 of the smalland mediumsized businesses that export goods and servicesoMompreneurs women who run businesses from their homesoThe Mompreneur Networking Group organizes seminars and publishes Mompreneur a free magazine that helps women who want to start a businessThe Entrepreneurial Processentrepreneurial process is influenced by the social economic political and technological factors in the broader environmentthree key process entrepreneur opportunity and resources Entrepreneur is at the heart of the entrepreneurial process behavioural personality traits skillsEntrepreneurs must identify an opportunity and access resourcesIdentifying Opportunitiesoinvolves generating ideas for new or improved products processes or services screening those ideas and developing the best ones Idea Generationgenerating ideas involves abandoning traditional assumptions about how things work and how they ought to be and seeing what others do notprospective new or improved product process or service can be profitably produced and is attractive relative to other potential venture ideas it might present an opportunitymajority originate from events relating to work or every life
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