PowerPoint Presentations for Small Business Management: Launching and Growing New Ventures, Fifth Canadian Edition Adapted by Cheryl Dowell Algonquin College

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

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 Limited1-3

LOOKING AHEAD

• Economically attractive and timely opportunity that creates value

• True opportunity exists only for entrepreneur who has: – interest, resources, and capabilities required to

succeed


ENTREPRENEURIAL OPPORTUNITY

LO 1

• 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


ENTREPRENEURSHIP AND SMALL BUSINESS

LO 2

• 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


WHAT IS A SMALL BUSINESS?

LO 3

• 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 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


WHAT IS A SMALL BUSINESS?

LO 3

THE MOTIVATORS OF ENTREPRENEURSHIP


LO 4


KEY SMALL BUSINESS STATISTICS

LO 4

DRAWBACKS OF ENTREPRENEURSHIP


LO 4

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

LO 4

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

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

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

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

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

GETTING STARTED IN ENTREPRENEURSHIP


• FOUR ROUTES TO ENTREPRENEURSHIP1. Starting a new business2. Entering a family business3. Opening a franchised business4. Buying an existing business

LO 6

AGE, GENDER, AND ENTREPRENEURIAL OPPORTUNITY


LO 6

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

themselvesLO 6

1-20

PRECIPITATING EVENTS

Copyright © 2013 by Nelson Education Limited

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

LO 6

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

ENTREPRENEURIAL CHARACTERISTICS


1. Commitment and determination2. Leadership3. Opportunity obsession4. Tolerance of risk, ambiguity and uncertainty5. Creativity, self-reliance and adaptability6. Motivation to excel

LO 7

Documents

PowerPoint Presentations for Small Business Management: Launching and Growing New Ventures, Fifth Canadian Edition Adapted by Cheryl Dowell Algonquin College