Business Chapter 3 Reading Notes
- Every day, approximately 380 businesses are started in Canada.1 New firms create the most jobs.
- Industry Canada is the main federal government agency responsible for small business.
- The Business Register (which tracks businesses), and the Labour Force Survey (which tracks
individuals). To be included in the register, a business must have at least one paid employee,
annual sales revenues of $30 000 or more, or be incorporated
- Good-producing business in the register is considered small id it has fewer than 100 employees,
while a service-producing business is considered small if it has fewer than 50 employees.
- Individuals are classified as self-employed if they are working owners of a business that is either
incorporated or unincorporated, if they work for themselves but do not have a business
o (some musicians, for example, would fall into this category), or if they work without pay
in a family business.
- Industry Canada reports that there are 2.2 million "business establishments" in Canada and about
2.5 million people who are "self-employed.
- Small business as an owner-managed business with less than 100 employees.
- Abusiness is considered to be new if it has become operational within the previous 12 months, if
it adopts any of the main organizational forms (proprietorship, partner¬ ship, corporation, or co-
operative), and if it sells goods or services.
o Thus, we define a new venture (or new firm) as a recently formed commercial
organization that provides goods and/or services for sale.
- Entrepreneurship is the process of identifying an opportunity in the marketplace and accessing the
resources needed to capitalize on that opportunity.7 Entrepreneurs are people who recognize and
- Not only small business owners Many successful managers in large organizations in both the
public and private sectors also exhibit similar characteristics.
o Entrepreneurship therefore occurs in a wide range of contexts: not just in small or new
firms, but also in old firms, in large firms, in firms that grow slowly, in firms that grow
rapidly, in non-profit organizations, and in the public sector.
- People who exhibit entrepreneurial characteristics and create something new within an existing
large firm or organization are called intrepreneurs.
- Akey difference between intrapreneurs and entrepreneurs is that entrepreneurs typically don't
have to concern themselves with getting the resources needed to bring the new product to market
since their employer provides the resources.
1 - It may surprise you to learn that close to 98 percent of all businesses in Canada are small (having
less than 100 employees).
- Approximately 58 percent of all business establishments in Canada—whether small or large—are
located in Ontario and Quebec.
o The Western provinces (36 percent), the Atlantic Provinces (6 percent) and The
Northwest Territories, the Yukon, and Nunavut only represent 0.3 percent of Canada's
- small (fewer than 100 employees), medium (100-499 employees), and large businesses (500+
- The term private sector generally refers to the part of the economy that is made up of companies
and organizations that are not owned or controlled by the government.
- According to Industry Canada, small businesses account for over two-thirds of employment in
four industries: non-institutional health care (90 percent), the construction industry (77 percent),
other services (73 percent), and accommodation and food (69 percent).
- Gross domestic product (GDP). GDP refers to the market value of all final goods and services
produced within a country in a given period of time.
- Over the past decade, the annual contribution has been valued at 25 percent16—less than the
sector's contribution to employment but significant nonetheless.
- According to Statistics Canada, the number of firms in Canada grew 12 percent between 1991
- Between 1991 and 2003, the number of businesses grew by an average of 9300 each year, with
8800 of these being small- and medium-sized enter¬ prises (SMEs).
- There are now more than 800 000 women entrepreneurs in Canada, and the number has been
increasing by more than 3 percent each year in recent years.
- Research conducted by Industry Canada shows that over the past two decades the number of
female entrepreneurs has grown by 208 percent compared with just a 38 percent increase for men.
- Abusiness operated for several years prior to hiring employees it would only be classified is a
new business when the employees were acquired.
- To get to the destination (the start-up of a new venture), the entrepreneur must identify a business
opportunity and access the resources needed to capitalize on it.
- Some are behavioural (for example, high energy level), others are personality traits (for example,
independence), and still others are skills (for example, problem solving).
- The two main things that entrepreneurs need to do are to identify an opportunity and access
2 - Identifying opportunities involves generating ideas for new (or improved) products, processes, or
services, screening those ideas so that the one that presents the best opportunity can be developed,
and then developing the opport