SMALL BUSINESS MANAGEMENT Chapter 1 The Role of Small Business and Entrepreneurship in Canada. 4/3/2011 Mrs. Shefa El Sagga SBM

CHAPTER OBJECTIVES 1. Discuss the evidence of the level of interest & activity in the small business sector. 2. Review common methods of defining small business & explain why a definition is important. 3. Understand the current extent of entrepreneurship & small business in Canada. 4. Discuss the positive benefits a healthy small business sector can offer to society. 5. Explain the probable future environment for entrepreneurship & the small business community.

The Entrepreneurial Revolution Smaller organizational units are acquiring greater power because the individual entrepreneur is the most important global player. ……. big companies will have to break up and become "confederations of small, entrepreneurial companies in order to survive“ John Naisbitt Gobal Paradox Small organizational units are gaining greater power as national boundaries are rendered permeable by communication and information technology. Both countries and companies are deconstructing into smaller and smaller entities with greater economic power. The power shifting from the vertical to the horizontal, and from hierarchical to interconnected.

What has fuelled this growth? Throughout course we will examine many examples that will illustrate many reasons why? A dream Downsizing No Jobs Natural interest and desire American clothing

The Entrepreneurial Revolution The evidence of Small business growth (difficult to measure) Increase in the number of business establishments. Increase in the number of employees of small business. Increases in government interest and programs. How Many come from small business background in family List types of business 4/3/2011 Mrs. Shefa El Sagga SBM

The Entrepreneurial Revolution Increases in the number of small business related courses at colleges and universities. Increase in entrepreneurial activities in large businesses. Increases in political power of small businesses. Improvement in the image of small businesses. New Driving Growth Through Entrepreneurship and Innovation Increase in entrepreneurial activities in large businesses 4/3/2011 Mrs. Shefa El Sagga SBM

What Is Small Business? Comparison and Evaluation. Government Programs. Lending Programs. Number of employees. Total Revenue. Profits. Management-Ownership Structure. Although defining a small business is difficult, it is important to make for comparison, evaluation, and various lending and assistance programs. can improve your chances of success with good planning, preparation, and insight. Start by evaluating your strengths and weaknesses as a potential owner and manager of a small business. 97% of all businesses, 29% of gross sales, 50% of gross domestic product 58% of the labour force, 32% of business profits, 20 % of all business assets. 4/3/2011 Mrs. Shefa El Sagga SBM

Current State of Small Business in Canada Young Entrepreneurs. Female Entrepreneurs. Immigrant Entrepreneurs. Entrepreneurial Activity by Industry. Entrepreneurial Activity by Region. 4/3/2011 Mrs. Shefa El Sagga SBM

Contributions Labour Intensity. Innovations and Inventions. Productivity and Profitability. bias for action. staying close to the customer. autonomy and entrepreneurship. productivity through people. hands-on value driven. simple form - lean staff. 4/3/2011 Mrs. Shefa El Sagga SBM

Contributions (cont) Flexibility. Canadian Ownership. Small Business Health as a Link to Economic Growth. Social Contributions. 4/3/2011 Mrs. Shefa El Sagga SBM

Small Business and the Future Change. Technology. Consumer Demographics and Buying Patterns (baby boomers aging – moving into small business in great numbers). Competitive Aspects of Markets. Global Markets, Large Business Response pluses and minuses. 4/3/2011 Mrs. Shefa El Sagga SBM

Small Business and the Future The Economy. The Political Climate. The Social Climate. The Economy: careful planning exchange rates. The Political Climate: Terrorism killer but government is more responsive. The Social Climate: looked upon favorably. 4/3/2011 Mrs. Shefa El Sagga SBM

Concept Checks Why has there been an increase in entrepreneurial activity throughout the world in recent years?. What evidences are there that there is an entrepreneurial “revolution” occurring?. Why is it important to define small business?. Many countries are turning to small business and private initiative to assist in their economic growth. The entrepreneurial revolution is evidenced by increases in: business establishments, employees in small businesses, government small business programs, college small business classes, and entrepreneurial activities of large companies. Although defining a small business is difficult, it is important to make for comparison, evaluation, and various lending and assistance programs. 4/3/2011 Mrs. Shefa El Sagga SBM

Concept Checks What are the criteria used to make the small business definition?. What is the extent of small business in Canada?. What two demographic groups have shown an increase in proprietorship in recent years in Canada?. 4. Some of the common criteria in defining small are total revenue, number of employees, profitability and type of management structure. 5. Small business accounts for 97% of all businesses, 29% of gross sales, 50% of gross domestic product and 58% of the labour force, 32% of business profits, and 20 % of all business assets. 6. In recent years there has been an increase in small businesses established by young people and women 4/3/2011 Mrs. Shefa El Sagga SBM

Concept Checks What are the contributions small businesses can make to society?. What are the positive and negative factors which may influence the small business community in the future?. Small business promotes ownership and economic growth, provides jobs, innovations, high productivity, flexibility, and social contributions to a society. The climate for starting a small business in the future should improve; however there will continue to be competitive disadvantages. The factors which may influence this change include technology, consumer demographics and buying patterns, and the competitive aspects of markets. 4/3/2011 Mrs. Shefa El Sagga SBM