AFM131 Chapter Notes - Chapter 7: Small Business, Affiliate Marketing, Business Plan

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Sept 29, Oct 1 1
Chapter 7: Entrepreneurship and Starting a Small Business
Entrepreneurship
Entrepreneurship: accepting the challenge of starting and running a business
Self-employed Canadians: 15%
Small business vs Entrepreneur
Small Business Entrepreneur
Amount of Wealth
Creation
Small, steady stream of
income to be sustainable
Can result in substantial wealth
Speed of Wealth
Creation
Over time Can be rapid
Risk Relatively lower Relatively high
Innovation Status quo New products/services or
processes
Note: Small Business = businesses intend to stay small that separates that from
entrepreneurship
Why people take the entrepreneurial challenge
1. New idea, process, or product
Meet an unmet need?
Find a more cost effective way to do a process
Launch a new product or improve a current product
2. Independence (be own boss)
3. Challenge (people thrive on solving challenges)
4. Family pattern (relatives gone into businesses, family already has business)
5. Profit (being invested in your idea)
6. Immigrants (some immigrants can’t find a job, not recognized by their home country
degree)
What does it take to be an entrepreneur?
1. Self-directed (manage growth of your own business, self-starter, lead without any push)
2. Self-nurturing (able to motivate yourself to keep on going with your idea)
3. Action oriented (set up an action plan, time frame)
4. Highly energetic (fully invested emotionally, physically, financially)
5. Tolerant of uncertainty
6. Able to learn quickly (learn from mistakes, learn success/failure from other entrepreneurs)
Micropreneurs
Micro-enterprises: a small business with less than 5 employees
Micropreneurs: owners of microenterprises, willing to accept risk of starting and managing
small business
Growth in Home-based businesses
Growth due to:
Computer technology: easier to stay in touch
Corporate downsizing: (people are uncertain of job security/roles, start own business
they can have control over)
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Changes in social attitudes: (supportive culture, encourage new ideas/creativity)
Challenges in home-based businesses
Getting new customers
Managing time: (how to make sure another competitor doesn’t beat you to it, be fully
invested)
Keeping work and family tasks separate: work/life balance
Abiding by city ordinances: following rules in city, might not be able to set in business
in residence area to not cause disturbance and traffic
Managing risk: more to lose if there’s burglary, have proper insurance policy in place,
have sensitive financial information in your home
Web-based businesses
How to stand out?
Find creative ways to engage in your target audience (twitter chat)
What are you offering: are you offering better than retail marketers (Better
selection/pricing)
Affiliate marketing: internet based marketing strategy where a business rewards
individuals or other businesses (affiliates) for each visitor they send to your website
oTeam up with another company with a strong web base
E-commerce challenges in Canada:
oBehind in app usage, view full catalogue of inventory
oCanada slow in technology (just used picture cheque)
Entrepreneurship within firms
Intrapreneurs: creative people who work as entrepreneurs within corporations
oUse firms existing resources
oApple changed the way we expect in our smartphone, watch
oBlackberry was leader in smartphone leaders
Entrepreneurial team: group of experienced people from different areas of business who
join together to form a managerial team with the skills needed to develop, make, and market
a new product
oDevelop make, market a new product
oWith more dedicated people and resources, ideas can develop faster and be more
robust
Support Systems for Entrepreneurs
Government support
Business development bank of Canada
Canada Business Network
Incubators
Hands on management assistance, education, technical and vital business support
services, networking resources, financial advice, can provide office space
Crucial in early development stage Goal: ensure small business survives start up period
AND produce successful graduates who will run a productive business in the future
Ex. Velocity at the University of Waterloo
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