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

MGTA01H3 Chapter Notes - Chapter 3: Tim Hortons, Irving Oil, Labour Force Survey


Department
Management
Course Code
MGTA01H3
Professor
Bill Mc Conkey
Chapter
3

This preview shows pages 1-2. to view the full 7 pages of the document.
Chapter 3: Uderstadig Etrepreeurship, Sall Busiess,
ad New Veture Creatio
The Links among Small Business, New Venture Creation, and Entrepreneurship // The Role
of Small and New Businesses in the Canadian Economy
Small Business
an owner-managed business with less than 100 employees
a private sector is the part of the economy that is made up of companies and organizations that
are not owned or controlled by the government
can be measured by the number of employees, sales revenue, the size of investment required,
o the usiess’ type of oeship stutue
Industry Canada is the main federal government agency responsible
government relies on information provided by Statistics Canada:
- business register (tracks businesses and must consist of 1 paid employee, annual sales
revenues of $30,000 or more, or be incorporated)
- labour force survey (tracks individuals to determine (un)employment levels)
The New Venture/Firm
a recently formed commercial organization that provides goods and/or services for sale
a business is considered new if:
- it’s eoe opeatioal ithi the peious  oths
- adopts any of the main organization forms (proprietorship, partnership, corporation, or
co-operative)
- sells goods or services
Entrepreneurship
the process of identifying an opportunity in the marketplace and accessing the resources
needed to capitalize on it
entrepreneurs are people who recognize and seize opportunities
intrapreneurship are people who exhibit entrepreneurial characteristics and create something
new in existing large firms
- do’t hae to oe theseles of esoues; poided y eployes
The Entrepreneurial Process
The Entrepreneur
Identifies the personal characteristics of entrepreneurs; includes behavioral (high-energy level),
personality traits (independence), and skills (problem solving)
Entrepreneurs need to identify an opportunity and access resources
find more resources at oneclass.com
find more resources at oneclass.com

Only pages 1-2 are available for preview. Some parts have been intentionally blurred.

Identifying Opportunities
generates ideas for new (or improved) products, processes, or services, screening ideas so the
one that presents the best opportunity can be developed, and then develops it
idea generation
- ideas are mainly generated from events relating to work or everyday life
- work experience is the most common source of ideas, accounting for 45-85%
- personal interest and hobby accounts for 16%
- a chance happening (when venture ideas come unexpectedly) accounts for 11%
screening
- the idea creates or adds value for the customer
- can solve significant problems or meets a need in a new or different way
- the idea provides a competitive advantage that can be sustained
- exists when potential customers see the product or service better than that of
competitors
- all other things being equal, the longer markets are in the state of flux, the
greater the likelihood of being able to sustain a competitive advantage
- the idea is marketable and financially viable
- important to determine whether sales will lead to profits
- thorough investigation of who the customers are, what their needs are, how the
product or service will satisfy their needs better than competitors
- must have an understanding of the key competitors who provides similar
products and benefits to target market
- customers define the competition in terms of who best satisfies their needs
- a sales forecast is an estimate of how much of a product or service will be
purchased by the prospective customers for a specific period of time (typically
one year)
- forms the foundation for determining the financial viability of the
venture and the resources needed to start it
- total revenue = units sold x selling price
- determining financial viability involves preparing financial forecasts which are 2-
 yea pojetios of a etue’s futue fiaial positio ad pefoae
- consists of an estimate of start-up costs, a cash budget (forecasts the
cash receipts and cash disbursements of the business), an income
statement (shows profit or loss), and a balance sheet (shows the assets,
liailities, ad the oe’s euity
- the idea has low exit costs
- exit costs are high if the business is not expected to generate profit for a
number of years since business cannot be abandoned in the short term
- exit costs are low if the venture can be shut down without a significant loss of
time, money, or reputation
developing the opportunity
- new ventures use one or more of the three main entry strategies:
find more resources at oneclass.com
find more resources at oneclass.com
You're Reading a Preview

Unlock to view full version