PowerPoint

Presentations for

Small Business
Management:
Launching and Growing New
Ventures, Fifth Canadian Edition

Adapted by
Cheryl Dowell
Algonquin College

CHAPTER 1
Entrepreneurs

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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.
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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

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ENTREPRENEURSHIP
AND SMALL BUSINESS
Entrepreneurs:
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

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WHAT IS A SMALL BUSINESS?

Criteria
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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WHAT IS A SMALL BUSINESS?

According to Statistics Canada, in 2009:

1,114,915 small businesses in Canada

2.7 million self-employed workers
98 % have fewer than 100 employees
contribute about 42 % to Canadas GDP
employ 48 % of total labour force in private sector
46 % have female ownership
87 % of Canadian exporters and make up 21 % of
Canadas total value of exports
75 % operate in service industries
25 % in goods-producing industries

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THE MOTIVATORS OF
ENTREPRENEURSHIP

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KEY SMALL BUSINESS STATISTICS

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DRAWBACKS OF
ENTREPRENEURSHIP

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CAUSES OF BUSINESS FAILURE

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
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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

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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

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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
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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
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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

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GETTING STARTED IN
ENTREPRENEURSHIP
FOUR ROUTES TO
ENTREPRENEURSHIP
1.
2.
3.
4.

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Starting a new business

Entering a family business
Opening a franchised business
Buying an existing business

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AGE, GENDER, AND

ENTREPRENEURIAL OPPORTUNITY

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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

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PRECIPITATING EVENTS
An event, such as losing a job, that
moves an individual to become an
entrepreneur
job termination
job dissatisfaction
unexpected opportunity

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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
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ENTREPRENEURIAL
CHARACTERISTICS
1.
2.
3.
4.

Commitment and determination

Leadership
Opportunity obsession
Tolerance of risk, ambiguity and
uncertainty
5. Creativity, self-reliance and
adaptability
6. Motivation to excel
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