PowerPoint
Presentations for
Small Business Management:
Launching and Growing New Ventures,
Fifth Canadian Edition
Adapted by
Cheryl Dowell
Algonquin College
CHAPTER 1
Entrepreneurs
Copyright © 2013 by Nelson Education Limited
LOOKING AHEAD
After studying this chapter, you should be able to:
1. Discuss the availability of entrepreneurial opportunities and give examples of
successful businesses started by entrepreneurs.
2.
Explain the nature of entrepreneurship and how it is related to small
business.
3.
Define small business and identify the importance of small business.
4.
Identify rewards and drawbacks of entrepreneurial careers.
5.
Describe the various types of entrepreneurs and entrepreneurial ventures.
6.
Discuss several factors related to readiness for entrepreneurship and getting
started in an entrepreneurial career.
7.
Describe some characteristics of successful entrepreneurs.
Copyright © 2013 by Nelson Education Limited
1-3
ENTREPRENEURIAL OPPORTUNITY
• Economically attractive and timely
opportunity that creates value
• True opportunity exists only for entrepreneur
who has:
– interest, resources, and capabilities required to
succeed
LO 1
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1-4
ENTREPRENEURSHIP
AND SMALL BUSINESS
• Entrepreneurs:
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active owner-managers
second-generation operators of family-owned firms
franchisees
owner managers who have bought out the founders of
existing firms
• Small business managers:
– receive specified compensation
– do not assume ownership risks
LO 2
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1-5
WHAT IS A SMALL BUSINESS?
• Criteria
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LO 3
Financing supplied by one person or small group
Localized business operations (except marketing)
Business’ size small relative to larger competitors
Fewer than 100 employees
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1-6
WHAT IS A SMALL BUSINESS?
• According to Statistics Canada, in 2009:
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1,114,915 small businesses in Canada
2.7 million self-employed workers
98 % have fewer than 100 employees
contribute about 42 % to Canada’s GDP
employ 48 % of total labour force in private sector
46 % have female ownership
87 % of Canadian exporters and make up 21 % of
Canada’s total value of exports
– 75 % operate in service industries
– 25 % in goods-producing industries
LO 3
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THE MOTIVATORS OF
ENTREPRENEURSHIP
LO 4
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1-8
KEY SMALL BUSINESS STATISTICS
LO 4
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1-9
DRAWBACKS OF ENTREPRENEURSHIP
LO 4
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1-10
CAUSES OF BUSINESS FAILURE
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32 % inadequate research and development
23 % lacked competitive advantage
14 % due to uncontrolled costs
13 % due to poorly developed marketing
strategies
• 10 % poor market timing
• 8 % succumbed to competitor activities
LO 4
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1-11
VARIETIES OF ENTREPRENEURSHIP
• Founder (“Pure” Entrepreneur)
– brings a new firm into existence
• General Manager (“Second Stage”
Entrepreneur)
– directs the continuing operations of established
firms
• Franchisee
– power is limited by the contractual relationship
with a franchising organization
LO 5
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1-12
HIGH POTENTIAL VENTURES VS.
SMALL FIRMS AND MICRO BUSINESS
• High-Potential Venture (Gazelle)
– has great prospects for growth
• Attractive Small Firm
– provides substantial profits to its owner
• Micro Business (Lifestyle)
– provides minimal profits to its owner
LO 5
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1-13
CHARACTERISTICS OF
ARTISAN ENTREPRENEURS
• Technical skills and little business knowledge
– Paternalistic approach
– Reluctance to delegate
– Narrow view of strategy
– Personal sales effort
– Short planning horizon
– Simple record keeping
LO 5
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1-14
CHARACTERISTICS OF
OPPORTUNISTIC ENTREPRENEURS
• Business skills and technical knowledge
– Scientific approach to problems
– Willing to delegate
– Broad view of strategy
– Diversified marketing approach
– Longer planning horizon
– Sophisticated accounting and financial control
LO 5
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1-15
ENTREPRENEURIAL TEAMS
• Two or more who work together as entrepreneurs
• Helpful to:
• Secure a broad range of managerial talents
• Enhance profits
• Useful in:
• High technology businesses
• Attractive small firms
• High potential ventures
LO 5
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1-16
GETTING STARTED IN ENTREPRENEURSHIP
• FOUR ROUTES TO ENTREPRENEURSHIP
1. Starting a new business
2. Entering a family business
3. Opening a franchised business
4. Buying an existing business
LO 6
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1-17
AGE, GENDER, AND
ENTREPRENEURIAL OPPORTUNITY
LO 6
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1-18
REFUGEES AS ENTREPRENEURS
• Refugee
– becomes an entrepreneur to escape an
undesirable situation
• Foreign refugee
– leaves his or her native country and becomes an
entrepreneur in the new country
• Corporate refugee
– leaves big business to go into business for
themselves
LO 6
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1-19
PRECIPITATING EVENTS
• An event, such as losing a job, that moves an
individual to become an entrepreneur
– job termination
– job dissatisfaction
– unexpected opportunity
LO 6
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CHARACTERISTICS OF
SUCCESSFUL ENTREPRENEURS
• Internal Locus of Control:
– entrepreneurs tend to hold themselves
accountable for their own successes or failures
• External Locus of Control:
– non-entrepreneurs tend to believe that external
circumstances, luck or fate impact upon their
worlds
LO 7
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ENTREPRENEURIAL CHARACTERISTICS
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Commitment and determination
Leadership
Opportunity obsession
Tolerance of risk, ambiguity and uncertainty
Creativity, self-reliance and adaptability
Motivation to excel
LO 7
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