Chapter 6 - Edwards School of Business
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Transcript Chapter 6 - Edwards School of Business
Chapter 6
Prepared by
Norm Althouse
University of Calgary
Copyright © 2011 by Nelson Education Ltd.
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LEARNING OUTCOMES
1 Explain why people become entrepreneurs, and what the different types of
entrepreneurs are.
2 Describe the characteristics that successful entrepreneurs share.
3 Discuss how small businesses contribute to the Canadian economy.
4 Summarize the first steps to take if you are starting your own business.
5 Examine some of the special challenges of a small business owner.
6 Identify the advantages and disadvantages facing owners of small
businesses.
7 Describe how the Business Development Bank of Canada helps small
businesses.
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8 List some of the trends that are shaping entrepreneurship and small-business
ownership.
Copyright © 2011 by Nelson Education Ltd.
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Small Business in Canada
Account for approximately 98% of all employers
≈ 55% of Canadian businesses employ fewer than 5
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people
≈ 95% of Canadian businesses employ fewer than 50
people
Approximately 40% of all new jobs are created by
small businesses
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ENTREPRENEURSHIP TODAY
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Entrepreneurs
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People with vision, drive,
and creativity who are
willing to take the risk
of starting and managing
a new business to make
a profit or of greatly
changing the scope
and direction of an
existing firm.
Reasons for Becoming an Entrepreneur
Desire to control one’s own destiny
The opportunity for profit
Create something new
Personal satisfaction
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Lifestyle
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Types of Entrepreneurs
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Classic
Entrepreneurs
Risk takers who start
their own companies
Multipreneurs
Entrepreneurs who start
a series of companies
Intrapreneurs
Employees who apply their
creativity, vision, and
knowledge
within a large corporation
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The Entrepreneurial Personality
Ambitious
Independent
Self-confident
Passionate
Committed
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Risk taking
Energetic
Creative
Visionary
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What is a Small Business?
Independently managed
Characteristics
of a
Small Business
Owned by an individual
or a small group
Based locally
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(although may serve wide market)
Not a dominant company
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Small Businesses are found in various sectors:
Services
Wholesale
Manufacturing
Retail
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Agriculture
Construction
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Ways to Start Your Own Business
Start from Scratch
Buy an Existing Business
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Buy a Franchise
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Chapter 6
Checklist Before Starting a Business
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Getting Started
Find an idea
Choose a form of business organization (see ch 5)
Develop the business plan
Financing
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Debt
Equity
Angel investors (see Exhibit 6.3)
Venture capital
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Risky Business
Economic Factors
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Reasons for
Business
Failures
Financial Causes
Lack of Experience
Personal Reasons
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Managing a Small Business (how to keep going)
Using outside consultants
Hiring and retaining employees
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Going global with exports
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Why Small Businesses Thrive
Independence and a better lifestyle
Personal satisfaction from work
Best route to success
Rapidly changing technology
Outsourcing
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Major corporate restructurings and
downsizing
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Why Stay Small? (the advantages)
React more quickly to changing market forces
Develop and market ideas faster, with fewer
financial resources and fewer people
Efficient operations keeps costs down
Serve specialized markets
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Offer a higher level of personal service
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Disadvantages of Small Businesses
Difficulties in obtaining adequate financing
Limited managerial skills may impact growth
Expensive to comply with regulations
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Requires a major commitment by owner
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Mission of the BDC (Business Development Bank of Canada)
Help people start and
manage small businesses
Help win federal contracts
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Speak on behalf of small businesses
http://www.bdc.ca
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Trends in Entrepreneurship
Changing demographics create
entrepreneurial diversity
Baby boomers, increase in minority groups
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Growth of “Web-Driven Entrepreneurs”
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