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MGM102H5 (178)
Chapter 8

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University of Toronto Mississauga
Dave Swanston

Chapter 8 - entrepreneurship Entrepreneurship is accepting the challenge of starting and running a business. This is to start a business. An entrepreneur is a person of very high aptitude who pioneers change, possessing characteristics that a very small fraction of the population has. Anyone that wants to work for themselves is an entrepreneur. Entrepreneurship and other businesses have differences: • Amount of wealth creation: they'll basically make a lot of money for themselves. • Speed of wealth creation: they make money really quickly. • Risk: is very high. If it didn't have a high risk, entrepreneurship would be impossibly competitive. • Innovation: will give the entrepreneur a competitive advantage. Reasons why people want to be an entrepreneur: • New ideas/process/product • Independence • Challenges - motivated and driven people like a challenge. • Family pattern • Profit • Immigrants - cause they find it hard to find employment Important entrepreneurial characteristics: self directed, determined, action-oriented, highly energetic, tolerant of uncertainty, able to learn quickly. Courage is also important. They don't just think and talk about an idea, they act on it. The source of innovation is more like a flashlight. Imagine a search party, walking around in the dark, shining lights, looking around, asking questions, and looking some more. Sam Walton used this flashlight approach. He visited his stores and those of competitors and he took notes. His managers used flashlighting too. ENTREPRENEURS don't always look for what customers need - they look for what they don't need as well. For potential entrepreneurs: you should work for other people first to learn how the earn their money. You should research your market but don't take too long to act. Start your business when you have a customer, try the venture as a sideline at first. Don't set goals too high. Plan your objectives using specific time frames. Surround yourself with people smarter than you: accountants, board of directors who are interested in your well-being and will give you straight answers. And don't be afraid to fail. Women entrepreneurs are growing in numbers. Women tend to operate in the wholesale, retail and professional services industry. Female entrepreneurs are growing because they have financial needs, there is a lack of promotion opportunities, women returning to the workforce, family and personal responsibility, public awareness of women in businesses (cause more women are in media, this encourages other women to start), part time occupations (women have some talent in writing, designing and making clothes, these are hobbies, which they will try out and see how far they can go with it). Finally there is a higher rate of success for women, this is because women feel less pressured than men to achieve quick results. They are more cautious, so they make fewer mistakes. They also accept advice more readily than men, who may have a macho image of having to know it all. BTW: small and medium-sized enterprises are businesses that have fewer than 500 employees. Entrepreneurial team is a 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. Micro-enterprise: a small business defined as having fewer than five employees. Micropreneurs: small business owners with fewer than five employees who are willing to accept t he risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle. Home based businesses are growing because of computer technology, corporate downsizing, change in social attitudes. The challenges that home-based businesses face: getting customers (getting the word out is difficult), managing time (self-discipline), keeping work and family tasks separate, abiding by city ordinances (there are restrictions placed by the gov't about how much traffic a home-based business can attract in a neighborhood), and managing risk. Web-based businesses are growing too because it's a better vehicle for the customers. It took too much time creating and mailing catalogues. It was a slow process. Intrapreneurs: creative people who work as entrepreneurs inside a corporation. The idea is to use a company's existing resources - human, financial, and physical - to launch new products and generate new profits. Incubators: centres that provide hands-on management 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. GOVERNMENTS: the missions of Canada Business is to improve the start-up, survival, and growth rates of small and medium sized enterprises. This includes assisting with sound business planning, market research, and the use of strategic business information. They have created a website for potential entrepreneurs that have a database of research literature on small business and entrepreneurship. The gov't can also have a significant effect on entrepreneurship by offering investment tax credits that give tax breaks to businesses that make the kind of investments that create jobs. Business establishment: has at least one paid employee, annual sales revenue of $30,000 or is incorporated and has filed a federal corporate income tax return at least once in the previous three years Employer business: meets one of the business establishment criteria and usually maintains a payroll of at least one person, possibly the owner. Small business: a business that is independently owned and operated, is not dominant in its field, and meets certain standards of size in terms of employees or annual revenues. Small businesses are extremely important for the Canadian economy. This is because nearly all small businesses are Canadian-owned and managed. Large businesses are foreign owned and managed. Small businesses thus plays a role in helping to maintain the canadian identity and canadian economic independence. Small businesses also continue to be feeders for future large businesses, after small businesses establish a good track record, some of the convert from private to public companies, enabling them to obtain significant financing and become larger companies. Small businesses' biggest obstacle is the lack of qualified workers. Small firms believe that th
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