1. UNIT 3 Entrepreneurship

2. Entrepreneur Defined A person who takes risks A person who takes risks and starts a venture and starts a venture (profit or not-for-profit) to (profit or not-for-profit) to solve a problem or to take solve a problem or to take advantage of an opportunity; advantage of an opportunity; a person who provides an a person who provides an innovative product or service innovative product or service to meet a consumer to meet a consumer want or need. want or need.

3. Entrepreneurial Characteristics Most entrepreneurs possess the following characteristics: Most entrepreneurs possess the following characteristics: 1. Risk Takers 1. Risk Takers 2. Perceptive 2. Perceptive 3. Curious 3. Curious 4. Imaginative 4. Imaginative 5. Persistent 5. Persistent 6. Goal-Setters 6. Goal-Setters 7. Hardworking 7. Hardworking 8. Self-Confident 8. Self-Confident 9. Flexible 9. Flexible 10. Independent 10. Independent

4. Risk Taker There is no sure thing in business. A failed business could mean bankruptcy or near bankruptcy. Not everyone can cope with that stress There is no sure thing in business. A failed business could mean bankruptcy or near bankruptcy. Not everyone can cope with that stress Successful entrepreneurs minimize and manage risk through proper business planning and assessment of the venture’s prospects for success.

5. Perceptive Entrepreneurs do not avoid problems Entrepreneurs do not avoid problems Problems are perceived as opportunities to learn, improve, grow, create and develop new ideas Problems are perceived as opportunities to learn, improve, grow, create and develop new ideas

6. Curious  Entrepreneurs like to know how things work, could things work, and answer questions such as what if? And I wonder…and they do And I wonder…and they do the research to find out the the research to find out the answers answers

7. Imaginative Entrepreneurs imagine solutions to problems and create new products or generate new ideas Entrepreneurs imagine solutions to problems and create new products or generate new ideas They have a vision (visionaries) They have a vision (visionaries)

8. Persistent Successful entrepreneurs face constant challenges – mistakes made, money and family stress, confronting criticism, unforseen events, and don’t give up.

9. Goal Setter Successful entrepreneurs are motivated by setting new goals and mapping out the steps to take to get there.

10. Hardworking No success comes easy. There is no easy way to be successful. No success comes easy. There is no easy way to be successful. The road to excellence is not paved by a single act, but rather a series of acts. The road to excellence is not paved by a single act, but rather a series of acts.

11. Self-Confident Entrepreneurs believe in themselves – they have a postive self-worth (self-esteem), and self- image Believe their efforts will pay off

12. Flexible The only constant in life and business is change Entrepreneurs view change as an opportunity Entrepreneurs view change as an opportunity Must be able to be flexible and adapt to changing trends in the market, technology, economic environment and competitive environments.

13. Independent Entrepreneurs have a need to be in control of their own destiny. Entrepreneurs have a need to be in control of their own destiny. They don’t like to work in a controlled environment being told what to do. They don’t like to work in a controlled environment being told what to do.

14. Entrepreneurial Skills Skill means having the knowledge and ability to do something specific. Skills are easier to develop than characteristics. Entrepreneurs have a variety of skills including: 1. Research 2. Leadership and Management Skills 3. Relationship Skills

15. 1. Research Skills  One of the most important research skills is knowing what questions to ask.  The first step in acquiring knowledge and information is asking a good question.

16. Research Skills  May begin with questions such as: 1. “Why is that?” 2. “What if?” 2. “What if?” 3. “How does that work?” 3. “How does that work?” 4. “How could I make it easier to..”? etc 4. “How could I make it easier to..”? etc

17. Research Process  1. Ask the questions  2. Gather research  3. Organize data  4. Analyze/Interpret data  5. Draw conclusions  6. Map out next steps

18. Gathering Information Data Research Data falls into two categories: Primary Research  Information is collected first hand by an individual or group for a specific purpose.  For example, questionnaires or surveys Secondary Research  Information that others have collected and made available to the public  For example, Statistics Canada.

19. Primary Research  Because of the cost and time involved in conducting primary research, entrepreneurs will often begin looking for answers by conducting secondary research.  Should the results of the secondary research prove favourable, an entrepreneur will often use primary research later in the business creation process.

20. Secondary Research Examples of Secondary Research Tools  Books from the library or bookstore  Periodicals such as magazines, newspapers, and newsletters, trade journals  The internet  Business consultants – For example, government departments, and your local chamber of commerce  Professionals – lawyers, accountants, etc.  Educational Institutions – colleges, universities  Indexes and Databases

21. Secondary Research Indexes and Database Examples: 1. Statistics Canada Povides a wealth of information through articles, charts, graphs, trends, on everything Canadian. Povides a wealth of information through articles, charts, graphs, trends, on everything Canadian. 2. CanCorp Financial website Provides detailed information on more than 8000 Canadian Companies Provides detailed information on more than 8000 Canadian Companies 3. The Thomas Resister of American Manufacturers Provides information on 156 000 North Americanmanufacturers and more than 450 000 products. Provides information on 156 000 North Americanmanufacturers and more than 450 000 products.

22. Indexes and Databases Con’t 4 Industry Canada Website Provides a comprehensive list of Canadian companies and additional information to help entrepreneurs. Provides a comprehensive list of Canadian companies and additional information to help entrepreneurs. 5. Frasers Website Provides detailed information on about 30 000 Canadian industrial suppliers. Provides detailed information on about 30 000 Canadian industrial suppliers. Note: Some databases require a fee to use, but most provide some data for free. Libraries may have access to the information because they pay for the services for the public. the services for the public.

23. Information Usefulness  Not all information will prove to be useful  Some information may lead to new questions and answers to be solved which may lead to more research  Some Information may lead to other venture ideas  An entrepreneur needs to sort through and assess what information to use, discard, and continue to explore.

24. Using the Internet Advantages Disadvantages Disadvantages

25. 2. Management Skills Role of Management in Business To achieve the goals of the organization by directing the allocation and use of the organization’s human, financial, and material resources. To achieve the goals of the organization by directing the allocation and use of the organization’s human, financial, and material resources. Management performs four major functions for any business venture: Management performs four major functions for any business venture: 1. Planning 2. Organizing 3. Directing 4. Controlling

26. Management Planning Planning  Business Plan  Financial Planning  Marketing Plans  Production Planning  Human Resource Planning Organizing Organizing  Use time planners, to do lists, reminder files, personal planner assistants

27. ManagementDirecting  Empowering employees to share in the goals of the company  Delegate, assist and encourage initiative and self-direction in staff. Controlling  Budgets are needed to control expenses, inventory, and other material resources.  Accurate book keeping and effective accounting systems are imperative.

28. 3. Relationship Skills As an entrepreneur you have different relationship with: 1. Staff 2. Suppliers 3. Customers

29. Staff Relationships To maintain good relationships with their staff, entrepreneurs need to recognize what motivates their staff. To maintain good relationships with their staff, entrepreneurs need to recognize what motivates their staff. Recognizing each employee is different and has different interests, needs, and ideas about fair and equal treatment. Recognizing each employee is different and has different interests, needs, and ideas about fair and equal treatment. Motivation skills rely on matching rewards to an employee’s needs and personality. Motivation skills rely on matching rewards to an employee’s needs and personality. Empathy – the ability to understand what other people think and feel, is a key characteristic in an entrepreneur with good relationship skills. Customers should not be treated better than your staff. Customers should not be treated better than your staff.

30. Supplier Relationships Suppliers may be in the form of the government, service providers, merchandise suppliers, or material and equipment sellers Suppliers may be in the form of the government, service providers, merchandise suppliers, or material and equipment sellers Communication is the most important skill when dealing with suppliers Paying bills on time is one way to maintain good relationships with suppliers Consider carefully elements of your contract with your supplier if applicable. (i.e. credit, payment and deliver and return terms, etc.

31. Customer Relationships Key Questions For Entrepreneurs to Ask Themselves: Key Questions For Entrepreneurs to Ask Themselves:  What can I do to make my customers feel positive about doing business with me?  What example can I set for my staff when dealing with both customers and staff.  Key sentiments to demonstrate to customers and staff include: respect, consideration, appreciation, and integrity and honesty

32. Venture Evaluation Criteria Want to start a business? Before risking all your cash, energy, and confidence, be sure to evaluate your product or business idea first. Want to start a business? Before risking all your cash, energy, and confidence, be sure to evaluate your product or business idea first.  Below are key areas to evaluate before proceeding: 1. Feasibility – Can you really do this? 2. Marketability – Can you really sell this? 3. Profitability – Can you make a profit on this?

33. 1. Feasibility Study Financing List the amount required in the form of a budget Include the source of the capital with details (bank terms, etc) Location Explain your choice of location Outline details regarding location (address, rent, taxes, utilities, etc.) Licences and Permits List the licences and permits you require. State where, when, and how you will obtain them. Suppliers Make a list of everything you need. Next to each of the items on your inventory needs list, name the supplier, price, and terms. Staff Describe your staffing needs What is your detailed plan for obtaining the necessary employees.

34. 2. Marketability Ask yourself the following questions about your product, service or charity: 1. Does your target market want this product? Prove it. 2. Who is your competition? How much of the market do they possess already? How ill you take it away from them? 3. Are you competitively priced? 4. Is this a short-term venture? How long will it last? 5. What does your product, service, or charity offer that no other product, service, charity offers? Why would a customer pay money for whatever your provide?

35. Profitability  Financial information needs to be assessed: 1. Costs to run and operate the business 2. Sale projections 3. Projected Income Statements and Cash Flow Statements