- Learning Objectives

- Explain why people are willing to become entrepreneurs, and describe the
attributes of successful entrepreneurs.
- Discuss the importance of small business to the Canadian economy.
- Summarize ways to learn how small businesses operate
- Analyze what it takes to start and run a small business
- Outline the advantages and disadvantages that small businesses have in
entering global markets.
- The Age of the Entrepreneur
- Entrepreneurial venture is the concept of starting a small business to offer a
product with the international of disrupting an industry or maximizing profit.
- Entrepreneurial ventures differ from small businesses in the following four ways:
- Amount of wealth
- Rather than simply generating an income stream that replaces
traditional employment, a successful entreprenutial venture
creates substantial wealth, typically excess in excess of several
million dollars in profit.
- Speed of wealth creation
- While a successful small business can generate several million
dollars of profit over a lifetime, entrepreneurial wealth creation
often is rapid (e.g within five years)
- Risk
- The risk of an entrepreneurial venture must be high. Otherwise,
with the incentive of sure profits, many entrepreneurs would be
pursuing the idea and the opportunity no longer would exist.
- Innovation
- Entrepreneurship often involves substantial innovation beyond
what a small business might exhibit. This innovation gives venture
the competitive advantage that results in wealth creation.
- Learning Objective 1: Explain why people are willing to become entrepreneurs,
and describe the attributes of successful entrepreneurs.
- Some reasons why:
- Opportunity
- Many people today may not have the skills for today’s complex
organizations, but they do have the initiative and drive to work the
long hours demanded by entrepreneurship
- New ideas, process, or product
- Some entrepreneurs are driven by a firm belief, perhaps even an
obsession, that they can produce a better product, or a current
product at a lower cost, than anybody else.
- Profit
- Profit is another reason to become an entrepreneur.
- However, it is important to note that long after a business has
produced substantial profits and amassed personal fortunes for its
 owners, many continue to enjoy the challenge of overcoming the
endless problems that every business faces and the satisfaction of
continued success.
- ‘Enviropreneurs’ (aka environmental-entrepreneurs) are
innnovators who seek to do well (earn a profit) by doing good
(enhancing the environment).
- Challenge
- Entrepreneurs take moderate, calculated risks; they do not just
gamble. In general though, entrepreneurs seek achievement more
than power.
- Independence
- Many entrepreneurs simply do not enjoy working for someone
else – they want to be the ones to make the decisions that lead to
their success or failure.
- Family pattern
- Some people grow up in an atmosphere in which family members
have started their own businesses, perhaps going back several
generations.
- This background may presdispose young people to think along the
same lines.
- What attributes does it take to be an entrepreneur?
- Self-directed
- Need to be self-disciplined and thoroughly comfortable being your
own boss.
- Self-nurturing
- Must believe in your idea even when no one else does, and be
able to replenish your own enthusiasm.
- Action-oriented
- Great business ideas are not enough – the most important thing is
a burning desire to realize, actualize, and build your dream into
reality.
- Highly energetic
- It is your own business and your must be emotionally mentally,
and physically able to work long and hard.
- Employees have weekends and vacations – entrepreneurs often
work seven days a week, 18 hours a day and do not take
vacations for years.
- Tolerant of uncertainty
- Successful entrepreneurs take only calculated risk, however, they
still must be able to take some risks.
- Remember, entrepreneurship is NOt for the squeamish or those
bent on security. You cannot be afraid to fail.
- Able to learn quickly
 - Making errors is inevitable. Only those who do mothing make no
mistakes – what is important is that you learn from them.
- Good entrepreneurs learn lessons quickly. They adapt and
change direction as required instead of letting pride stand in the
way of admitting mistakes.
- Turning your passions and problems into opportunities
- While many business ideas are inspired by their passions, many see
business opportunities in their problems.
- Most Most entrepreneurs do not get ideas for products from some flash of
inspiration. Flashlight metaphor:

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- To look at problems and/or passions and see opportunities in them, ask
yourself:
- What do I want, but can never find?
- What product would improve my life?
- What really irritates me and what product would help?
- You may have a business idea that is a good opportunity if:
- It fills customers’ needs
- You have the skills and resources to start the business
- You can sell the product at a price customers are willing and able
to pay, and still make a profit.
- You can get your product to customers before your window of
opportunity closes (i.e before competitors with similar solutions
beat you to the marketplace)
- You can keep the business ging
- Reasons for the emergence of female entrepreneurs:
- Financial need
- Fluctuating employment and drops in average real
incomes over the years have encouraged many women to
start a business
- Lack of promotion opportunities
- Most positions in higher management are still dominated
by men. Although the situation is improving, it is improving
at an extremely slow pace.
- Women returning to the workforce
- Many women who return to the job market after raising a
family find that their skills are outdated.
- Family and personal responsibility
 - The high rate of divorced and single mothers has created a
situation in which some women find themselves with
children and little or no financial support.
- Some even refuse support to be more independent.
- Public awareness of women in business
- As more publicity highlights that growing numbers of
women have started their own ventures, the idea catches
on and gives other the confidence to try.
- Part-time occupations
- Often women with some particular talent e.g writing,
designing, etc. are encourage ro develop their hobby/skills
on a part-time basis to see how far they can go with it.
- Higher rate of success for women
- Female entrepreneurs seem to have a better success rate
than men, due to factors such as:
- Women feel less pressured then men to achieve
quick results.
- They are a little more cautious
- They accept advice more readily than men.
- Entrepreneurial teams
- An entrepreneurial team is 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.
- A team may be better than an individual entrepreneur because
team members can combine creative skills with production and
marketing skills right from the start.
- Entrepreneurship within firms
- Entrepreneurship in a large organization is often reflected in the
efforts and achievements of intrapreneurs – creative people who
work as entrepreneurs within corporations.
- The idea is to use company’s existing resources – human,
financial, and physical – to launch new products ang generate
new products.
- Micropreneurs and Home-Based Businessses
- The smallest of small businesses are called micro-enterprises,
most often defined as having one to four employees
- While other entrepreneurs are committed to the quest for
growth, micropreneurs (owner of micro-enterprises) know
they can be happy even i their companies never appear on
a list of top-ranked businesses
- Many home-based businesses are owned by people combining
career and family. Reasons for growth of home-based businesses:
- Computer technology
 - Fast broadband connections, smartphones, and
other technologies are so affordable that setting up
a business takes a much smaller initial investment
than it once did.
- Corporate downsizing
- Downsizing has led some to venture out on their
own.
- Changers in social attitudes
- Whereas home-based entrepreneurs used to be
asked when they were going to get a “real job”,
they are not likely to be asked instead for how-to-
do-it advice.
- Challenges of working at home:
- Getting new customers
- Getting the word out can be difficult because you
do not have a retail storefront
- Managing time
- You save time by not commuting, but it takes self-
discipline to use
- Keeping work and family tasks separate
- It takes self-discipline to leave the work at the office
if the office is at home
- Abiding by city ordinances
- Government ordinances restrict the types of
businesses that are allowed in certain parts of the
community and how much traffic a home-based
business can attract to the neighbourhoood.
- Managing risk
- Home-based entrepreneurs should review their
homeowners insurance policy since not all policies
cover business-related claims.
- Online businesses
- Online businesses have to offer more than the same merchandise
customers can buy at stores – they must offer unique products or
services.
- An online business is not always a fast road to success. It can
sometimes be a shortcut to failure, like in the dotcom crash.
- One of the disadvantages of online businesses is that it is easy for
copycats to find your successful products, copy them, and sell the
imitations on other sites (e.g Amazon)
- Encouraging Entrepreneurship: What Government Can Do
- Entrepreneurs and new start-ups can find assistance from a business
accelerator, a program that gives developing companies access to mentorships,
 investors, and other support to help them become stable, self-sufficient
businesses.
- Business incubators provide space, services, advice, and support to assist new
and growing businesses to become established and successful.
- The incubator’s main goal is to produce successful firms that will leave
the program financially viable and freestanding.
- They vary in the way they deliver their services, in their organizational
structure, and in the types of clients they service.
- Learning Objective 2: Discuss the importance of small business to the Canadian
economy
- Small versus big business
- Small business can be defined as a business that is”
- Independently owned and operated
- Not dominant in its field
- Meets certain standards of size in terms of employees or annual
revenues
- Small business statistics

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- Importance of small businesses
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- Small-Business Success and Failure

- Business survival is defined as the percentage of new firms that continue
to operate when they reach a given age.
- Causes of small business failure:
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- Causes of small business success

- Learning Objective 3: Summarize ways to learn how small business operates

- Ways to get into your business venture:
- Learn from others
- Get some experience
- Many small business owners got the idea from their prior jobs.
- Recommendation is to have at least 3 years experience in a
sector before starting a business.
- Buy an existing business
- Buy a franchise
- Inherit/take over a family business
- Learning Objective 4: Analyze what it takes to start and run a small business
- Six functions of a business ina small business setting
- Planning your business
- A business plan is 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)
- Business plan structure
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- Financing your business
- Sources of financing
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- Financial institutions
- E.g credit unions, banks, etc.
- Small credit unions have more flexibility to make lending
decisions based on everything they know about their
customers, rather than on a more automated basis as
larger banks must.
- Angel investors and venture capitalists
- Angel investors (also known as business angels) are
usually wealthy individuals who invest their open funds into
private companies. Their investments can be in many
forms:
- The form of early stage business capital at the
start-up phase
- During the level of expansion
- Capital for established businesses to grow
- Mentorship and contacts to their invested
companies
- Venture capital is a type of private-equity financing
provided to start-up companies and small businesses
believed to have long-term growth poetntial. They are
similar to angel inventors, however there are two minor
differences
- Venture capitalists are a group of wealthy
individuals or a company that manages the assets
of those individuals or even money that is pooled
by investment firms.
- Due to the volume of money that flows into venture
capital firms, businesses able to secure venture
capital on average gets deals in the millions of
dollars.
- Crowdfunding
- Crowdfunding is the raising of funds through the collection
of funds through the collection of small contributions from
 the general public (known as the “crowd”) using the
Internet and social media.
- Traditionally, crowdfunding is used to raise money to fund
the development of a well-defined, singular project.
- Online financing resources
- There are many information sources for financing.
Examples of government grants and programs include:
- The scientific research and experimental
developmental program
- The national research council’s industrial research
assistance program.
- Knowing your customers
- One of the most important elements of small-business success is
knowing the market, which consists of 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 set
out to fill those needs. How? Offer top quality at a fair price with
great service.
- Remember, it is not enough to get customers – you have
to keep them.
- One of the greatest advantages that small businesses have over
larger ones is the ability to know their customers better and to
adapt quickly to their ever-changing needs.
- The only way to know what your customers’ needs are is to listen,
listen, listen. Do not let your passion and ego get in the way of
changing your products to fit what customers really want.
- Managing your employees
- It is not easy to find good, qualified help when you offer less
money, fewer benefits. And less room for advancement than
larger firms do.
- That is one reason why employee relations is important for
small business management.
- Employees of small companies are often more satisfied with their
jobs than are their counterparts in business. This is because quite
often they find their jobs
- The gig economy
- The gig economy is work based on people having
temporary jobs or doing separate pieces of work, each
paid separately, rather than working in a permanent job for
an employer.
- Advantages
- Hire someone at lower rate.
 - Way to complete required work especially if cash
flow is a problem or a business is just starting out.
- Disadvantages
- This would entail someone else to manage – when
owners already have little time as it is – that is more
focused on their own business’ success rather than
your business.
- Keeping records
- Small-business owners often say the most important assistance
they received in starting and managing the business involved
accounting.
- 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
that lead to costly mistakes.
- Looking for help
- Small-business owners have learned (often the heard way) taht
they need outside consulting advice early in the process.
- A necessary and invaluable aide is a competent, experienced
lawyer who knows and understands small business.
- Learning Objective 5: Outline the advantages and disadvantages that small
business have in entering global markets.
- Major hurdles of companies missing out on huge global markets
- Financing is often difficult to find
- Would-be exporters do not know how to get started and do not
understand the cultural differences between markets.
- The bureaucratic paperwork can threaten to bury a small business
- Small business advantages over large businesses in international trade
- Overseas buyers enjoy dealing with individuals rather than with large
corporate bureaucracies.
- Small companies can usually begin shipping much faster
- Small companies can provide products to a wide variety of suppliers
- Small companies can give customers more personal service and more
undivided attention because each overseas account is a major source of
business to them.