Textbook Notes (290,000)
CA (170,000)
UTSC (20,000)
MGT (800)
MGTA01H3 (600)
Chapter 3

Chapter 3 Notes


Department
Management (MGT)
Course Code
MGTA01H3
Professor
Chris Bovaird
Chapter
3

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Chapter 3 Notes:
Understanding Entrepreneurship, Small Business, and New
Venture Creation
SMALL BUSINESS
Small Business: An owner- managed business with less than 100 employees.
Hard to define
Measures of small business
# of employees
companys sales revenue
size of investment required
type of ownership structure
Industry Canada : Responsible for small businesses
Govt relies on Business Register and Labour Force Survey.
Business register: Tracks businesses
To be included, it must have
1.at least 1 paid employee
2.annual sales rev of $30000+
3.or be incorporated
Labour Force Survey: info from individuals to estimates employ and unemployment
levels
Self-employed: working owners of the business that is un/incorporated
ex/ Work for themselves but dont have a business (musicians)
ex/ work without pay in a family business
Many self-employed people are not counted as a business in the register.
# of new firms are always underestimated
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The NEW VENTRUE/ FIRM
New venture/ Firm: Recently formed commercial organization that provides goods and
services for sale.
If operated within the past 12 months
Adopted any organizational form (proprietorship, partnership etc.)
Sells goods or services
ENTREPRENEURSHIP
Entrepreneurship: The process of identifying an opportunity in the marketplace and
accessing the resources needed to capitalize on it.
Entrepreneurs: People who recognize and seize opportunities.
Creativity
Occurs everywhere, public/ private sector, small/ old firms etc
Intrapreneurs: People who create something new within an existing large firm/
organization
Dont need to worry about resources because company will provide them unlike
entrepreneurs
ROLES OF SMALL AND NEW BUSINESSES IN CANADIAN
ECONOMY
Small businesses:
98% of Canadian businesses are small
Huge % of small business have less than 5 employees
Accounts for 2/3 of employment in:
non-institutional health care, construction, services, food/ accommodations
Contribute 25% of GDP
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Private Sector: The part of the economy that is made up of companies and organizations
that are not
owned or controlled by the government.
New Ventures:
Main source of job creation
New products and services
Innovation and new technologies
Service-producing firms are growing FAST (esp high-knowledge industry such as IT,
biotech etc)
Women play big role in the growth of new firms
Female entrepreneurs + self-employed are growing rapidly in the past 10 years
New business could have been operating for several years before it actually counts as
new.
THE ENTREPRENEURIAL PROCESS
Steps to start-up a new venture:
1.Being an entrepreneur (with entrepreneurial characteristics)
2. Identify a business opportunity
3.Access the resources needed to capitalize on it
If the elements above are matched, the business will most likely to become
operational
The Entrepreneur characteristics
Behavioural High energy level
Skills Problem solving, Team building
Personality traits
High need for achievement (set goals for themselves)
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