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MGTA01H3 (583)
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Chapter 2

Chapter 2 notes

5 Pages
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Department
Management (MGT)
Course Code
MGTA01H3
Professor
H Laurence

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Chapter 3 Understanding Entrepreneurship, Small Business, and New Venture Creation
Links among Small Business, New Venture Creation, and Entrepreneurship
Small Business
-to be included in the business register:
At least one employee
Annual sales revenues of $30 000 or more
Be incorporated
-goods producing business is small if less than 100 employees
-service business small if fewer than 50 employees
-Labour Force Survey uses info from individuals to estimate employment/unemployment
levels
-self-employed if working owners of business, or work w/o pay in family business
-unincorporated business operated by self-employed person not counted in Industry Canada
-Small business: an owner-managed business with less than 100 employees
The New Venture/Firm
-when it was formed, whether it was incorporated, and if it sold goods and/or services
-new if operational within previous 12 months
-New venture/firm: recently formed commercial organization that provides goods and/or
services
Entrepreneurship
-Entrepreneurship: the process of identifying an opportunity in the marketplace and
accessing the resources needed to capitalize on that opportunity
-Entrepreneurs: people who recognize and seize opportunities
-small business usually independently owned and influences by unpredictable market
forces, thus provide use of creativity => associated with entrepreneurship
-entrepreneurship exists in all types of businesses (small, large, old, new, non-profit etc.)
-Intrapreneurs: people who exhibit entrepreneurial characteristics and create something
new within existing large firm
Do not need to concern themselves with getting the resources needed to bring the
new product
The Role of Small and New Businesses in the Canadian Economy
www.notesolution.com
Small Businesses
-98% of businesses in Canada are small, and majority of them have less than 5 employees
-Private sector: part of the economy made up of businesses not owned/controlled by gov.
-most private sector employees work in small businesses (49% => most are 5-19 employees)
-small businesses make a huge contribution to the GDP (market value of all goods/services
produced within a time period), about 25%
New Ventures
-new firms are the main source of job creation, and new products/services
-growth of female entrepreneurs in recent years
-a business without employees is classified as new only when employees are acquired
-contribution to employment
-innovation and new technology
The Entrepreneurial Process
-entrepreneurs must identify a business opportunity, and access the resources
-growth, stability, decline, demise
The Entrepreneur (p.43)
-characteristics include behavioural (high energy level), personality traits (independent), or
skills (problem solving)
-not who the person is but what the person does
Identifying Opportunities
Idea Generation
-abandoning traditional assumptions
-ideas mainly come from work experience => familiar with the product/service, customers,
suppliers, competitors, and market needs => then relate to personal capabilities
-from interest/hobby
-from a chance happening => idea generated unexpectedly
Screening
1.Idea creates or adds value for the customer: solves a significant problem or
meets significant need in new/different ways
2.Idea provides a competitive advantage that can be sustained: customers see
the product as better option, maintaining it against competitors’ actions or changes
to industry
www.notesolution.com

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Description
Chapter 3 Understanding Entrepreneurship, Small Business, and New Venture Creation Links among Small Business, New Venture Creation, and Entrepreneurship Small Business -to be included in the business register: At least one employee Annual sales revenues of $30 000 or more Be incorporated -goods producing business is small if less than 100 employees -service business small if fewer than 50 employees -Labour Force Survey uses info from individuals to estimate employmentunemployment levels -self-employed if working owners of business, or work wo pay in family business -unincorporated business operated by self-employed person not counted in Industry Canada -Small business: an owner-managed business with less than 100 employees The New VentureFirm -when it was formed, whether it was incorporated, and if it sold goods andor services -new if operational within previous 12 months -New venturefirm: recently formed commercial organization that provides goods andor services Entrepreneurship -Entrepreneurship: the process of identifying an opportunity in the marketplace and accessing the resources needed to capitalize on that opportunity -Entrepreneurs: people who recognize and seize opportunities -small business usually independently owned and influences by unpredictable market forces, thus provide use of creativity => associated with entrepreneurship -entrepreneurship exists in all types of businesses (small, large, old, new, non-profit etc.) -Intrapreneurs: people who exhibit entrepreneurial characteristics and create something new within existing large firm Do not need to concern themselves with getting the resources needed to bring the new product The Role of Small and New Businesses in the Canadian Economy www.notesolution.com
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