1. ENTREPRENEURSHIP AND STARTING A SMALL BUSINESS Bus101

2. 1. Why people become entrepreneurs, 2. The attributes of successful entrepreneurs. 3. The importance of small business to the Canadian economy. 4. The major causes of small-business failure. 5. Ways to learn about how small businesses operate. 6. Analyze what it takes to start and run a small business. 7. Outline the advantages and disadvantages that small businesses have in entering global markets. Bus101

3. Accepting the challenge of starting and running a business. Entrepreneurial ventures differ from small businesses in the following four ways: 1. Amount of wealth creation. 2. Speed of wealth creation. 3. Risk. 4. Innovation. Bus101

4. 1. New idea, process or product. 2. Independence. 3. Challenge. 4. Family Pattern. 5. Profit. 6. Immigrants. Bus101

5.  Some important entrepreneurial attributes are: 1. Self-directed 2. Determined 3. Action-oriented 4. Highly energetic 5. Tolerant of uncertainty 6. Able to learn quickly  Courage is also very important for an entrepreneur. Bus101

6.  Between 1996 and 2006, the number of self- employed women grew by 18%.  It is estimated that 47% of small and medium- sized enterprises (SMEs) have some degree of female ownership.  Small and medium-sized enterprises (SMEs): Refers to all businesses with fewer than 500 employees.  Women owners of SMEs tend to operate in the wholesale, retail and professional services industry. Bus101

7. There are a variety of reasons for the significant emergence of female entrepreneurs: 1. Financial need 2. Lack of promotion opportunities 3. Women returning to the workforce 4. Family and personal responsibility 5. Public awareness of women in business 6. Part-time occupations 7. Higher rate of success for women Bus101

8.  Entrepreneurial team: A group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product.  Team members can combine creative skills with production and marketing skills.  A team can ensure more co-operation and coordination among functions. Bus101

9.  Micro-enterprise: A small business defined as having fewer than five employees.  Micropreneurs: Small-business owners with fewer than five employees who are willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle. Bus101

10. There are a number of reasons for the growth of home-based businesses:  Computer technology  Corporate downsizing  Change in social attitudes Bus101

11. There are also challenges of running a home- based business:  Getting new customers  Managing time  Keeping work and family tasks separate  Abiding by city ordinances  Managing risk Bus101

12.  The Internet has made it possible for small web-based businesses to thrive  Internet sales grew to an estimated $62.7 billion in Canada in 2007  Web-based business isn’t always a success; it can often lead to failure Bus101

13.  Intrapreneur: Creative people who work as entrepreneurs within corporations.  The main idea is to use the corporations existing resources to launch new products and make profits. Bus101

14.  Canada Business is a federal government information service for entrepreneurs  Specialized programs  Incubators: Centers that provide hands-on management assistance, education, information, technical and vital business support services, networking resources, financial advice, as well as advice on where to go to seek financial assistance. Bus101

15. Small Versus Big Business  Business establishment: Has at least one paid employee, annual sales revenue of $30000, or is incorporated and has filed a federal corporate income tax return at least once in the previous three years.  Employer business: Meets one of the business establishment criteria and usually maintains a payroll of at least one person, possibly the owner.  Small business: A business that is independently owned and operated, is not dominant in its field, and meets certain standards of size in terms of employees or annual revenues. Bus101

16.  Nearly all small businesses are Canadian- owned and managed.  Small businesses are feeders for future large businesses.  On average, 130,000 new small businesses are created in Canada each year.  Small businesses employ approximately 48% of the total private labour force. Bus101

17. Small businesses exist in many sectors:  Service Businesses  Retail Businesses  Construction Firms  Wholesalers  Manufacturing Bus101

18.  Statistics Canada reports that 96% of small businesses survive for one year, 85% for three years, and 70% for five years. Bus101

20. There are several ways to start you first business undertaking:  Start your own company.  Buy an existing business.  Buy a franchise unit.  Inherit/takeover a family business. Bus101

21. Advantage  Freedom to design and manage Disadvantages  Risk of the unknowns  Time investment  Lenders are wary Bus101

22. Advantages  Probability of success  Name recognition and mass advertising  Access to a support network  Services from the franchisor Bus101

23. Disadvantages  High cost  Subject to Policy Change  Head office control  Saturation in the local market  Franchisor’s position in the agreement Bus101

24. Advantages  Access to Financial and Management Resources  Strong Reputation  Loyal Employees  Support of Family Members Disadvantages  Family conflict  Family interest versus business interest  Poor history of survival Bus101

25. There are many functions of a business in a small-business setting:  Planning your business  Financing your business  Knowing your customers (marketing)  Managing your employees (HR)  Keeping records (accounting) Bus101

26.  Business plan: A detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resources and qualifications of the owner(s).  A business plan usually consists of a: cover letter, executive summary, company background, management team, financial plan, capital required, marketing plan, location analysis, manufacturing plan and appendix Bus101

27.  Half of all SMEs rely on financial services firms to provide them with business financing.  Love Money  Personal Savings  Venture capitalists (VCs)  Angel investors: Private investors who invest their own money in potentially hot new companies before they go public.  Debt as opposed to equity Bus101

28.  Market: People with unsatisfied wants and needs who have both the resources and the willingness to buy.  Once you have identified your market and its needs, you must fill those needs.  Small businesses know their customers better than large businesses and adapt quickly to their changing needs. Bus101

29.  Hiring, training and motivating employees are critical for a growing small business.  Employees of small businesses often find their jobs more challenging, their ideas more accepted, and their bosses more respectful than a large business.  Entrepreneurs must often delegate authority as their business keeps growing. Bus101

30.  A business person who sets up an effective accounting system early will save much grief later.  Many business failures are caused by poor accounting practices.  Other small-business owners may be able to recommend you a respected accountant. Bus101

31. Small businesses have advantages over large businesses in international trade:  Overseas buyers prefer dealing with individuals rather than large bureaucracies  Small companies can ship faster  Small companies provide a variety of suppliers  Small companies can provide more personal service Bus101

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