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Chapter 3

BUSINESS CUSTOM 2/E VOL. 1 Chapter 3 Readings (very detailed and helpful)

8 Pages
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Department
Management (MGT)
Course Code
MGTA01H3
Professor
Chris Bovaird

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Chapter 3: Understanding entrepreneurship, small business, and new venture creation
The links among small business, new venture creation, and entrepreneurship:
Everyday 380 business in Canada start
New firms create jobs, noted for entrepreneurship, and are small…but this doesnt mean
most small businesses are entrepreneurial
Small business:
Defining small business is tricky
Industry Canada is the main federal government agency responsible for small business
relies upon Statistics Canada: the Business Register (which tracks businesses)—to be included in
registera business must have at least one paid employee, annual sales revenues of $30 000 or
more, or be incorporated, and the Labour Force Survey (which tracks individuals)
oLabour Force Survey uses info from individuals to make estimates employment and
unemployment levels…Individuals are classified as self-employed if they are working owners
of a business, if they work for themselves but do not have a business (i.e. musicians), or if
they work without pay in a family business
Good-producing business in the register is small if it has less than 100 employees and
service-producing business is small if it has less than 50 employees
There are 2.2 million “business establishments in Canada and about 2.5 million people
areself-employed”
Small business: an owner-managed business with less than 100 employees
The New Venture/Firm:
to figure out when a firm comes into existence consider: when it was formed, whether it
was incorporated, and it if sold goods and/or services
business is considered new is it has become operational with the previous 12 months, if it
adopts any of the main organizational forms (proprietorship, partnership, corporation, or co-
operative) and if it sells goods or services
www.notesolution.com
New venture/firm: a recently formed commercial organization that provides goods
and/or services for sale
Entrepreneurship:
Entrepreneurship: the process of identifying an opportunity in the marketplace and
accessing the resources needed to capitalize it
Entrepreneurs: people who recognize and seize opportunities
People who exhibit entrepreneurial characteristics and create something new within an
existing large firm or organization are called intrapreneurs
oProtector & Gamble encourages intrapreneurs
Key difference b/w intrapreneurs and entrepreneurs is that intrapreneurs typically dont
have to concern themselves with getting the resources needed to bring the new product to market
since their employer provides the resources
Starting a biz. from scratch requires dealing with uncertainty, ambiguity, and
unpredictability
The role of small and new business in the Canadian economy:
Small businesses:
98% of all businesses in Canada are small (having less than 100 employees)
Small (fewer than 100), medium (100-499), large (500+)
Private sector: the part of the economy that is made up of companies and organizations
that are not owned or controlled by the gvnt
According to Industry Canada, small businesses account for 2/3 of employments in four
industries: non-institutional health care (90%), the construction industry (77%), other services
(73% percent) and accommodation and food (69%)…in another five industries at least half of the
workforce is employed by small businesses
GDP (Gross Domestic Product) refers to the market value of all final goods and services
produced within a country in a given period of time
www.notesolution.com
Small businesses contribute significantly to GDP
New ventures:
New firms are not only the main source of job creation, they are also responsible for the
cast majority of new products and services
SMEs: small- and medium-sized enterprises
There are now more than 800 000 women entrepreneurs in Canada, increasing 3%/yr.
Over past two decades, female entrepreneurs grew by 208% than 38% increase for men
An unincorporated business operated by a self-employed person (with no employees)
would not be included in the Statistics Canadas Business Register
SMEs outperform large businesses in many areas, especially in terms of their
contribution to employment
New businesses lead the way when it comes to innovation and new technology
The entrepreneurial process:
After start-up, the ventures next phase of development will result in one of the outcomes:
growth, stability (Staying the same), decline, or demise (ceasing to exist)
The entrepreneur:
personal characteristics of entrepreneurs include: high energy level (behavioural),
independence (personality traits), problem solving (skills)…some others like internal locus of
control, team building, creativity, initiative
important fact is not who the person is but what the person does
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 ban be developed, and
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Chapter 3: Understanding entrepreneurship, small business, and new venture creation The links among small business, new venture creation, and entrepreneurship: Everyday 380 business in Canada start New firms create jobs, noted for entrepreneurship, and are smallbut this doesnt mean most small businesses are entrepreneurial Small business: Defining small business is tricky Industry Canada is the main federal government agency responsible for small business relies upon Statistics Canada: the Business Register (which tracks businesses)to be included in registera business must have at least one paid employee, annual sales revenues of $30 000 or more, or be incorporated, and the Labour Force Survey (which tracks individuals) o Labour Force Survey uses info from individuals to make estimates employment and unemployment levelsIndividuals are classified as self-employed if they are working owners of a business, if they work for themselves but do not have a business (i.e. musicians), or if they work without pay in a family business Good-producing business in the register is small if it has less than 100 employees and service-producing business is small if it has less than 50 employees There are 2.2 million business establishments in Canada and about 2.5 million people are self-employed Small business: an owner-managed business with less than 100 employees The New VentureFirm: to figure out when a firm comes into existence consider: when it was formed, whether it was incorporated, and it if sold goods andor services business is considered new is it has become operational with the previous 12 months, if it adopts any of the main organizational forms (proprietorship, partnership, corporation, or co- operative) and if it sells goods or services www.notesolution.com
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