MGTA05 – Foundations - Week 8

“Enterprise in Canada”

(Chapter 7 to page 153)

Updated: Nov 2, 2021

6:15 am
Preview: Enterprise & Entrepreneurs
Argument/Hypothesis:

Canadians’ prosperity is due

to a system that encourages
private enterprise
and
entrepreneurial behavior

Canada’s liberal, market system works

 Introduction
Canada is a liberal, market economy
Anyone may start almost any business

NO fees
Very few regulations
NO government permission
3rd easiest place to start a business
(out of 190 countries)*
* World Bank – Doing Business Report, 2019
 World Bank Ranking 2019
According to World Bank’s “Ease of Doing Business”
survey (2019), Canada is 3rd easiest country in
which to start a business
 Free Enterprise
You could start a business tomorrow
 “Free Enterprise”
refers to:
freedom from bureaucracy
ease and speed of starting
low cost and minimum regulation
when starting and running a business

in order to begin most businesses in

Canada you just need to... start
many people do...
Many Businesses Started Every Year
entries exits net change
. 150,000
~140.000
120,000 new businesses
. 90,000 started every
year
60,000

30,000

-30,000
~125.000
-60,000
close
-90,000 every
year
-120,000

-150,000
2010 2011 2012 2013 2014
7
Recent Data From Statistics Canada

This is the most recent available data

These numbers are remarkably consistent

with prior years
 Enterprise in Canada
We don’t know exactly
how many businesses are in Canada
We can guess – based on tax data
Most recent estimate:
~1.3 million self-employed tax payers
~1.3 million businesses with employees
~2.6 million businesses in total
Most of these are “small”
*Canadian Business Counts, December 2016 Released: Feb 15, 2017
http://www.statcan.gc.ca/daily-quotidien/170215/dq170215e-eng.htm
Canadian Businesses: “Small”
“Small” has no “official’ definition
Various Canadian organisations
define “small” in various ways:
Canadian Bankers Assoc: less $500,000 in loans
Export Development Corp: < $1,000,000 in exports Industry
Canada: small manufacturer <100 employees
Industry Canada: small service business <50 employees
and many other definitions....

One way to gauge size:

How many employees?
 Where Canadians work...
.
 Where Canadians work...
.

another
1.6 million
(~9%)
work for

businesses
with
1 to 4
employees
 Where Canadians Work..
another
.
1.8 mm
(~10%)
work for
businesses
with 9%
5 to 9 1 to 4 employees
employees
 Where Canadians work...

20-49 ~50%
.

10-19
of
5 to 9 Canadians
1 to 4
work
with
work less than
alone
50
others
 We also know...

~90% 1 to 4 employees
~600,000 businesses
of 25% of all businesses
Canadian
businesses only
10 to 19
employ
less ~10%
20 to54t9o 9 si-
u
than 0 0 0 of Canadian
b
5 3
0 0 ,
Self employed (work alone) ~2 - 9 9e s e s
ten 100n businesses
+ f the to
ta l
~1.3 million businesses 9% o employ
people 53% of all businesses more than
10 people
 Job Creation By Small Businesses
Not only are there many small business
Not only do they provide >50% of jobs

Small businesses (<100 employees) creating

most new jobs

86%
of net new jobs from 2007 - 2015
Source: Industry Canada, Key Small Business Statistics, August 2016
 Small Business: Key Points
>90% of Canadian businesses employ <10
>50% of Canadians work with <50 others
“small” businesses create >80% of jobs
Small businesses are important
You should know about them
 Business Failure Rates

It’s easy to start a business

It’s easy for a business to fail
Enterprise: A project or undertaking that
requires effort but whose outcome is uncertain
Business Survival Rates (Canada)
85% - survive to end of year 1
70% - survive to end of year 2
62% - survive to end of yr. 3
53% 51%

Source: Industry Canada, Key Small Business Statistics, July 2012.

 Business Survival Rates (USA)
.
Interesting Fact About Entrepreneurs

30% don’t last 2 years

50% don’t last 5 years

Most would-be entrepreneurs think

the odds of success are:
even worse!
This material is relevant to assignment
Toromark wants to expand to a location
where:
• it can find many new customers,
• enterprise is flourishing,
• state / local governments are supportive
• it believes it can grow

Find and present relevant data