Module 1 & 2 recap
Image source: https://strategyzer.com/canvas/business-model-canvas
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Module 1 & 2 recap
Image Source: McGraw Hill, Understanding Canadian Business, 9th edition
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Module 1 & 2 recap
Image source: https://strategyzer.com/canvas/business-model-canvas
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Module 03: Entrepreneurship and Starting a Small Business
Topics of discussion
1.
What distinguishes an entrepreneur from a small business owner?
2.
Why do people take on the challenge of starting a small business
and how can they get started?
3.
What is the role of small business in Canada?
4.
What does it take to run and manage a successful small business?
5.
What are the opportunities and challenges for small businesses that
want to go global?
6.
Can entrepreneurship exist within a company? Why or why not?
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What is “Entrepreneurship”?
• Entrepreneurship
Accepting the challenge of starting and
running your own business
Image source: venimo/iStock/Thinkstock
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What is “Entrepreneurship”?
Image sourcehttps://business.financialpost.com/entrepreneur/small-business/are-you-an-entrepreneur-or-a-small-business-owner-or-both
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What is “Entrepreneurship”?
Small business vs. entrepreneurship
Small Business
Entrepreneurship
Growth
Slow and steady
• Wealth generation
(income replacement)
• Status quo – focuses on
serving needs of an
established customer
base
Rapid and volatile
• Wealth generation (gains
and losses)
• Innovation – identifying
competitive advantage to
drive value
Risk
Risky
Riskier
• Larger investment
• Greater uncertainty
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What is “Entrepreneurship”?
Small business vs. entrepreneurship
Image sourcehttps://business.financialpost.com/entrepreneur/small-business/are-you-an-entrepreneur-or-a-small-business-owner-or-both
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Module 03: Entrepreneurship and Starting a Small Business
Why people are willing to “accept the challenge”
Why people take the entrepreneurial
challenge
• Independence
• Control, flexibility
• Profit
• Challenge
• Family pattern
• Immigrants
• Second career
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Why people take the entrepreneurial
challenge
• New idea, process, or product
– Meet an unmet need
– More cost-effective
– New or better product
Image source: venimo/iStock/Thinkstock
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Why people take the entrepreneurial
challenge
• External factors
– Social attitudes
– Success stories
– Job market
– Technology
– Home based business
– Web based business
Image source: https://www.americanexpress.com/en-us/business/trends-and-insights/articles/6-incredible-companies-that-started-in-a-garage/
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Why people take the entrepreneurial
challenge
Entrepreneurial potential self-assessment
•
https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/businessassessments/pages/self-assessment-test-your-entrepreneurial-potential.aspx
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Why people take the entrepreneurial
challenge
Entrepreneurial attributes
• Self-directed
• Self-nurturing
• Action-oriented
• Tolerant of uncertainty
• Able to learn quickly
• Highly energetic
Image source: venimo/iStock/Thinkstock
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Why people take the entrepreneurial
challenge
Image source: https://blog.gfar.net/2016/10/24/is-the-road-of-an-entrepreneur-ever-a-straight-one/
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Why people take the entrepreneurial
challenge
Image source: https://www.ic.gc.ca/eic/site/061.nsf/vwapj/CNF_BSR-NEC_TNS_2002-2014_May2018_eng.pdf/$file/CNF_BSR-NEC_TNS_2002-2014_May2018_eng.pdf
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Why people take the entrepreneurial
challenge
• Lowest vs. highest failure rates
– Easiest to start vs. hard to start
– Barriers to entry (upfront investment, specialized equipment, laws and
regulations, expertise (training), time, etc.)
Image source: Daisy-Daisy/iStock/Thinkstock
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Why people take the entrepreneurial
challenge
• Challenges
–
–
–
–
Getting new customers
Managing time
Keeping work and family tasks separate
Managing risk
Image source: RamCreativ/iStock/Thinkstock
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Module 03: Entrepreneurship and Starting a Small Business
Small business in Canada
Importance of small business in Canada
• Small business
– Independently owned and operated
– Not dominant in its field
– Meets certain standards of size (typically 1 to 99
employees)
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Importance of small business in Canada
Image source: http://www.ic.gc.ca/eic/site/061.nsf/eng/h_03018.html#point1-1
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Importance of small business in Canada
Image source: https://www.bdc.ca/en/articles-tools/business-strategy-planning/manage-business/pages/10-things-didnt-know-canadian-sme.aspx
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Importance of Small Business in Canada
Government support
• Services to help entrepreneurs and small businesses succeed
– Business Development Bank of Canada (BDC)
– Canada Business Network
Image source: Business Development Bank of Canada (Government of Canada), Canada Business Network (Government of Canada)
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Importance of Small Business in Canada
Sole Proprietorship
Partnership
Corporation
What is it?
A business owned
and operated by one
person
A legal business
relationship between
two or more people
(partnership
agreement)
A business operated
as a separate legal
entity (distinct from
its owners)
Advantages
• Simple/easy to
create
• Sharing of
resources and
expertise
• Separate legal
entity
• Limited liability
Disadvantages
• No distinction
between owner
and business
• Unlimited liability
• No distinction
between partners
and business
• Conflict resolution
• Unlimited liability
• More expensive to
setup and
maintain
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Module 03: Entrepreneurship and Starting a Small Business
Getting started - improving the chance of success
Ways to get into your first business venture
• Learn from others
– Entrepreneurship courses
– Talk to entrepreneurs
– Build a network
Image Source: Askold Romanov/iStock/Thinkstock
• Get some experience
– Work for others
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Image Source: https://uwaterloo.ca/entrepreneurship/
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Ways to get into your first business venture
Incubators
• Provide space, services, advice
and support to assist new and
growing businesses become
established and successful
– Hands-on management
assistance, education, technical
and vital business support
services, networking resources,
financial advice
• Crucial in early development
stage
Image source: Velocity and Y Combinator
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Ways to get into your first business venture
• Buy an existing business
– Established customer base, existing
relationships with suppliers and
lenders, established reputation
– Considerations:
• Why are they selling the
company?
• Do your due diligence –
any potential issues?
• What price to pay?
Image source: Albert Floyd/iStock/Thinkstock; vectorikart/iStock/Thinkstock
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Ways to get into your first business venture
• Buy a franchise
– Benefiting from the experience and
reputation of the franchisor
– Working with a proven product/service
– Ongoing support from the franchisor
– Lack of control
– Resources needed to start may be significant
Image source: International Franchise Association
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Ways to get into your first business venture
• Inherit/take over a family business
– Established reputation and relationships
– Unique challenges
• Ownership
• Control issues
• Performance issues
– Continuation rates are low
• Lack of expertise in family
• Lack of succession plan
Image source: vectorikart/iStock/Thinkstock
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Test your knowledge
Sally Wright has just taken early retirement, including a substantial retirement
allowance. She wishes to continue working and wants to invest her retirement allowance
in her own small business, and feels comfortable doing so with an established product
and process. She worked for the same employer in the same job all of her working career
and therefore has no experience in running her own business.
In starting her own business she would be well-advised to:
A. start the business from scratch.
B. buy an existing business.
C.
buy a franchise.
D. work for someone in an existing small business for the next 10 years.
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Module 03: Entrepreneurship and Starting a Small Business
Running a successful small business
Managing a small business
Figure: Figure 7.3, Understanding Canadian Business, 9th Cdn ed. © 2016 McGraw-Hill Education Limited
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Managing a small business
Good business management
includes:
• Planning your business
• Knowing your customers (marketing)
• Managing your employees (human resource
development)
• Keeping records (accounting and financial
management)
• Financing your business
Image source: robuart/iStock/Thinkstock
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Managing a small business
Business plan
A detailed, written
agreement that describes:
– The business opportunity
– The business environment
– Target market and strategy to
reach your market
– Your people
– Your operations
– Projected revenues,
expenses and cash flows
Image source: vasabii/iStock/Thinkstock
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Managing a small business
Sample outline of a business plan
• See Figure 7.4/page 280 of your text
• Check out sample plans at
Business plan template for entrepreneurs | BDC.ca
Image source: robuart/iStock/Thinkstock
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Managing a small business
What’s wrong with many business plans?
- too focused on the numbers
- too positive
Image source: Nongkran_ch/iStock/Thinkstock
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Managing a small business
Image Source: https://canadabusiness.ca/business-planning/business-planning-faqs/#toc7
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Managing a small business
Financing your business
• Consider costs to launch a business, such as:
– Materials and equipment
– Salaries
– Services
– Marketing
– Rent
Image source: vasabii/iStock/Thinkstock
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Managing a small business
Capital sources
of successful
entrepreneurs
Image source: http://www.ic.gc.ca/eic/site/061.nsf/eng/h_03018.html#point1-1
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Managing a small business
1.What are the ingredients of a successful financing pitch?
2.What mistakes do entrepreneurs make when requesting financing from
the Dragons?
Image source: http://www.cbc.ca/dragonsden
/
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Managing a small business
Crowdfunding:
Raising money from a large number of people online
Check out Canada’s history with crowdfunding at:
http://www.cbc.ca/news/canada/montreal/what-10-000kickstarter-projects-reveal-about-canada-s-entrepreneurs1.4084372
Image sources: Kickstarter, Indiegogo
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In the news
Image sources: http://business.financialpost.com/entrepreneur/1018-biz-mtb-clearbanc
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Module 03: Entrepreneurship and Starting a Small Business
Advantages and disadvantages small businesses have in
entering global markets
Test your knowledge
Which of the following best describes the opportunities available to small
businesses in international markets?
A.
The world market is a much larger and potentially more lucrative
market than the Canadian domestic market.
B. The threat of terrorist activities prevents small businesses from
competing internationally.
C. Most foreign buyers prefer to deal with large, well-known
corporations rather than small businesses.
D. Higher business costs eliminate the profit opportunities in global
markets.
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Small business and international prospects
Opportunities
• World market is larger and can be more lucrative
• Absorb excess inventory
• Extend product life
Hurdles
•
•
•
•
Financing
How to get started?
Lack of cultural understanding
Amount of paperwork
Image source: vasabii/iStock/Thinkstock
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Small business and international prospects
Advantages over large businesses
• Able to adapt quickly due to less bureaucracy
• Provide more personal and customized service
Image source: vasabii/iStock/Thinkstock
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Module 03: Entrepreneurship and Starting a Small Business
Entrepreneurship within organizations
Test your knowledge
Ketan is an intrapreneur for a multinational electronics company. As an
intrapreneur, Ketan will:
A. be expected to recruit new managerial talent for
his firm.
B.
use the firm's existing resources to develop new products.
C. be concerned mainly with improving the firm's
public image.
D. concentrate on creating new ventures that can be spun off to
become independent firms.
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Entrepreneurship within firms
• Intrapreneurs:
Image source: pking4th/iStock/Thinkstock
creative people who work as
entrepreneurs within
corporations
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Discussion Question
What does an entrepreneurial culture within a firm look like?
•
•
•
•
•
•
allows employees time for creative thinking and idea generation
encourages collaboration and expertise sharing
embraces failure and the related learning
hires traits consistent with entrepreneurship
promotes leaders that can make decisions and take risks
has a long-term view
Image source Apple Inc.
Image source: 3M
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For next week
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