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UNIT 3 Entrepreneurship
Entrepreneur DefinedEntrepreneur Defined
A person who:A person who: 1. takes risks and starts a 1. takes risks and starts a venture (profit or not-for-profit) venture (profit or not-for-profit) to solve a problem or to take to solve a problem or to take advantage of an opportunity;advantage of an opportunity; 2. a person who provides an 2. a person who provides an
innovative product or service innovative product or service to meet a consumer want or need.to meet a consumer want or need.
Entrepreneurial CharacteristicsEntrepreneurial Characteristics
Most entrepreneurs possess the following Most entrepreneurs possess the following characteristics:characteristics:
1. Risk Takers1. Risk Takers 2. Perceptive2. Perceptive 3. Curious3. Curious 4. Imaginative4. Imaginative 5. Persistent5. Persistent 6. Goal-Setters6. Goal-Setters 7. Hardworking7. Hardworking 8. Self-Confident8. Self-Confident 9. Flexible9. Flexible 10. Independent10. Independent
Risk TakerRisk Taker
There is no sure thing in business. AThere is no sure thing in business. A failed business could mean bankruptcy failed business could mean bankruptcy or near bankruptcy. Not everyone can or near bankruptcy. Not everyone can cope with that stress cope with that stress
Successful entrepreneurs minimize Successful entrepreneurs minimize andand manage risk through proper business manage risk through proper business planning and assessment of the planning and assessment of the venture’s prospects for success. venture’s prospects for success.
PerceptivePerceptive
Entrepreneurs do not avoid problemsEntrepreneurs do not avoid problems
Problems are perceived asProblems are perceived as opportunities to learn, improve, opportunities to learn, improve, grow,grow, create and develop new ideas create and develop new ideas
CuriousCurious
Entrepreneurs like to know:Entrepreneurs like to know: How things work?How things work? Could things work?Could things work?
And answer questions such as:And answer questions such as: What if? What if? And I wonder…And I wonder…
Entrepreneurs do the research to find out the Entrepreneurs do the research to find out the answersanswers
ImaginativeImaginative
Entrepreneurs imagine Entrepreneurs imagine solutions solutions to problems and create to problems and create newnew
products or generate new ideas products or generate new ideas
They have a vision (visionaries)They have a vision (visionaries)
PersistentPersistent
Successful entrepreneurs Successful entrepreneurs face constant challengesface constant challengessuch as: such as: 1. mistakes made1. mistakes made2. money and family stress2. money and family stress3. confronting criticism 3. confronting criticism 4. unforseen events4. unforseen events
Successful entrepreneurs do Successful entrepreneurs do notnot
give up. give up.
Goal SetterGoal Setter
Successful Successful entrepreneurs are entrepreneurs are motivated by:motivated by:
1. setting1. setting new goals new goals
2. mapping out the2. mapping out the steps to take to steps to take to
reachreach their goals. their goals.
HardworkingHardworking
No success comes easy. There is No success comes easy. There is no easy way to be successful.no easy way to be successful.
The road to excellence is not The road to excellence is not paved by a single act, but rather paved by a single act, but rather
aaseries of acts.series of acts.
Self-ConfidentSelf-Confident
Entrepreneurs believe in Entrepreneurs believe in themselves – they have a themselves – they have a
postive postive self-worth (self-esteem), self-worth (self-esteem), and self-and self- imageimage
Believe their efforts will pay offBelieve their efforts will pay off
FlexibleFlexible
The only constant in life andThe only constant in life and business is change business is change
Entrepreneurs view change as anEntrepreneurs view change as an opportunity opportunity
Must be able to be flexible and adaptMust be able to be flexible and adapt to changing trends in the market, to changing trends in the market, technology, economic environment technology, economic environment and competitive environments. and competitive environments.
IndependentIndependent
Entrepreneurs have a needEntrepreneurs have a need to be in control of their own to be in control of their own destiny. destiny.
They don’t like to work in aThey don’t like to work in a controlled environment controlled environment being told what to do. being told what to do.
Entrepreneurial SkillsEntrepreneurial Skills
Skill means having the knowledge and ability to do Skill means having the knowledge and ability to do something specific.something specific.
Skills are easier to develop than characteristics.Skills are easier to develop than characteristics.
Entrepreneurs have a variety of skills including:Entrepreneurs have a variety of skills including:
1.1. ResearchResearch2.2. Leadership and Management SkillsLeadership and Management Skills3.3. Relationship SkillsRelationship Skills
1. Research Skills1. Research Skills
One of the most important One of the most important research skills is knowing research skills is knowing what questions to ask.what questions to ask.
The first step in acquiring The first step in acquiring knowledge and information is knowledge and information is asking a good question.asking a good question.
Research SkillsResearch Skills
Entrepreneurs may begin with questions Entrepreneurs may begin with questions such as:such as:1. “Why is that?” 1. “Why is that?”
2. “What if?”2. “What if?” 3. “How does that work?”3. “How does that work?” 4. “How could I make it easier to..”?4. “How could I make it easier to..”?
etc etc
Research ProcessResearch Process
1. Ask the questions1. Ask the questions
2. Gather the research2. Gather the research
3. Organize the data collected3. Organize the data collected
4. Analyze/Interpret data collected4. Analyze/Interpret data collected
5. Draw conclusions5. Draw conclusions
6. Map out next steps6. Map out next steps
Gathering Information DataGathering Information DataResearch Data falls into two categories:Research Data falls into two categories:
Primary ResearchPrimary Research Information that is collected first hand by an Information that is collected first hand by an
individual or group for a specific purpose.individual or group for a specific purpose. For example, questionnaires or surveysFor example, questionnaires or surveys
Secondary ResearchSecondary Research Information that others have collected and Information that others have collected and
made available to the publicmade available to the public For example, Statistics Canada.For example, Statistics Canada.
Primary Research Primary Research
Because of the cost and time involved in Because of the cost and time involved in conducting primary research, entrepreneurs will conducting primary research, entrepreneurs will often begin looking for answers by conducting often begin looking for answers by conducting secondary research.secondary research.
Should the results of the secondary research Should the results of the secondary research prove favourable, an entrepreneur will often use prove favourable, an entrepreneur will often use primary research later in the business creation primary research later in the business creation process.process.
Secondary ResearchSecondary Research
Examples of Secondary Research ToolsExamples of Secondary Research Tools Books from the library or bookstoreBooks from the library or bookstore Periodicals such as magazines, newspapers, Periodicals such as magazines, newspapers,
and newsletters, trade journalsand newsletters, trade journals The internet The internet Business consultants – For example, Business consultants – For example,
government departments, and your local government departments, and your local chamber of commercechamber of commerce
Professionals – lawyers, accountants, etc.Professionals – lawyers, accountants, etc. Educational Institutions – colleges, universitiesEducational Institutions – colleges, universities Indexes and Databases Indexes and Databases
Secondary ResearchSecondary ResearchIndexes and Database Examples:Indexes and Database Examples:1.1. Statistics CanadaStatistics Canada Provides a wealth of information through articles, charts, Provides a wealth of information through articles, charts,
graphs, trends, on everything Canadian.graphs, trends, on everything Canadian.
2.2. CanCorp Financial websiteCanCorp Financial website Provides detailed information on more than 8000 Provides detailed information on more than 8000
Canadian CompaniesCanadian Companies
3. 3. The Thomas Resister of American ManufacturersThe Thomas Resister of American Manufacturers Provides information on 156 000 North Provides information on 156 000 North
Americanmanufacturers and more than 450 000 Americanmanufacturers and more than 450 000 products.products.
Indexes and Databases Con’tIndexes and Databases Con’t
4 4 Industry Canada WebsiteIndustry Canada Website Provides a comprehensive list of Canadian companies Provides a comprehensive list of Canadian companies
and additional information to help entrepreneurs.and additional information to help entrepreneurs.
5. 5. Frasers WebsiteFrasers Website Provides detailed information on about 30 000 Provides detailed information on about 30 000
Canadian industrial suppliers.Canadian industrial suppliers.
Note: Some databases require a fee to use, butNote: Some databases require a fee to use, but most provide some data for free. Libraries may most provide some data for free. Libraries may have access to the information because they pay for have access to the information because they pay for
the services for the public.the services for the public.
Information UsefulnessInformation Usefulness
Not all information will prove to be useful Not all information will prove to be useful Some information may lead to new Some information may lead to new
questions and answers to be solved which questions and answers to be solved which may lead to more researchmay lead to more research
Some Information may lead to other Some Information may lead to other venture ideas venture ideas
An entrepreneur needs to sort through and An entrepreneur needs to sort through and assess what information to use, discard, assess what information to use, discard, and continue to explore.and continue to explore.
Using the InternetUsing the Internet
AdvantagesAdvantages DisadvantagesDisadvantages
2. Management Skills2. Management Skills
Role of Management in BusinessRole of Management in Business To achieve the goals of the organization byTo achieve the goals of the organization by
directing the allocation and use of the directing the allocation and use of the organization’s human, financial, and material organization’s human, financial, and material resources. resources.
Management performs four major functions Management performs four major functions for for any business venture:any business venture:
1.1. PlanningPlanning2.2. OrganizingOrganizing3.3. DirectingDirecting4.4. ControllingControlling
ManagementManagement
PlanningPlanning
Business PlanBusiness Plan Financial PlanningFinancial Planning Marketing PlansMarketing Plans Production PlanningProduction Planning Human Resource Human Resource
PlanningPlanning
OrganizingOrganizing
Use time planners, to Use time planners, to do lists, reminder do lists, reminder files, personal planner files, personal planner assistantsassistants
ManagementManagement
DirectingDirecting
Empowering Empowering employees to share in employees to share in the goals of the the goals of the companycompany
Delegate, assist and Delegate, assist and encourage initiative encourage initiative and self-direction in and self-direction in staff.staff.
ControllingControlling
Budgets are needed Budgets are needed to control expenses, to control expenses, inventory, and other inventory, and other material resources.material resources.
Accurate book Accurate book keeping and effective keeping and effective accounting systems accounting systems are imperative.are imperative.
3. Relationship Skills3. Relationship Skills
As an entrepreneur you have different As an entrepreneur you have different relationship with:relationship with:
1.1. StaffStaff
2.2. SuppliersSuppliers
3.3. CustomersCustomers
Staff RelationshipsStaff Relationships To maintain good relationships with their staff, To maintain good relationships with their staff,
entrepreneurs need to recognize what motivates their entrepreneurs need to recognize what motivates their staff.staff.
Recognizing each employee is different andRecognizing each employee is different and has different interests, needs, and ideas has different interests, needs, and ideas about about fair and equal treatment.fair and equal treatment.
Motivation skills rely on matching rewards to Motivation skills rely on matching rewards to an employee’s needs and personality.an employee’s needs and personality.
Empathy – the ability to understand what Empathy – the ability to understand what other people think and feel, is a key other people think and feel, is a key characteristic in an characteristic in an
entrepreneur with good entrepreneur with good relationship skills.relationship skills.
Customers should not be treated better thanCustomers should not be treated better thanyour staff.your staff.
Supplier RelationshipsSupplier Relationships
Suppliers may be in the form of the government,Suppliers may be in the form of the government,service providers, merchandise suppliers, or materialservice providers, merchandise suppliers, or materialand equipment sellersand equipment sellers
Communication is the most important skillCommunication is the most important skill when dealing with suppliers when dealing with suppliers
Paying bills on time is one way to maintainPaying bills on time is one way to maintain good relationships with suppliers good relationships with suppliers
Consider carefully elements of your contractConsider carefully elements of your contract with your supplier if applicable. (i.e. credit, with your supplier if applicable. (i.e. credit,
payment and deliver and return terms, etc.)payment and deliver and return terms, etc.)
Customer RelationshipsCustomer Relationships
Key Questions For Entrepreneurs to Ask Themselves:Key Questions For Entrepreneurs to Ask Themselves:
What can I do to make my customers feel positive about What can I do to make my customers feel positive about doing business with me?doing business with me?
What example can I set for my staff when dealing with both What example can I set for my staff when dealing with both customers and staff.customers and staff.
Key sentiments to demonstrate to customers and staff Key sentiments to demonstrate to customers and staff include: respect, consideration, appreciation, and integrity include: respect, consideration, appreciation, and integrity and honestyand honesty
Venture Evaluation CriteriaVenture Evaluation Criteria
Want to start a business? Before risking all Want to start a business? Before risking all your cash, energy, and confidence, be sure to your cash, energy, and confidence, be sure to evaluate your product or business idea first. evaluate your product or business idea first.
Below are key areas to evaluate before Below are key areas to evaluate before proceeding:proceeding:
1.1. Feasibility – Can you really do this?Feasibility – Can you really do this?
2.2. Marketability – Can you really sell this?Marketability – Can you really sell this?
3.3. Profitability – Can you make a profit on this?Profitability – Can you make a profit on this?
1. Feasibility Study1. Feasibility StudyFinancingFinancing List the amount List the amount
required in the form of required in the form of a budgeta budget
Include the source of Include the source of the capital with details the capital with details
(bank terms, etc)(bank terms, etc)
LocationLocation Explain your choice of Explain your choice of locationlocation
Outline details Outline details regarding location regarding location
(address, rent, taxes, (address, rent, taxes, utilities, etc.)utilities, etc.)
Licences and PermitsLicences and Permits List the licences and List the licences and permits you require.permits you require.
State where, when, State where, when, and how you will and how you will
obtain them.obtain them.
SuppliersSuppliers Make a list of Make a list of everything you need.everything you need.
Next to each of the Next to each of the items on your items on your
inventory needs list, inventory needs list, name the supplier, name the supplier, price, and terms.price, and terms.
StaffStaff Describe your staffing Describe your staffing needsneeds
What is your detailed What is your detailed plan for obtaining the plan for obtaining the
necessary employees.necessary employees.
2. Marketability2. MarketabilityAsk yourself the following questions about your Ask yourself the following questions about your product, service or charity:product, service or charity:
1.1. Does your target market want this product? Prove it.Does your target market want this product? Prove it.2.2. Who is your competition? How much of the market do Who is your competition? How much of the market do
they possess already? How ill you take it away from they possess already? How ill you take it away from them?them?
3.3. Are you competitively priced?Are you competitively priced?4.4. Is this a short-term venture? How long will it last?Is this a short-term venture? How long will it last?5.5. What does your product, service, or charity offer that What does your product, service, or charity offer that
no other product, service, charity offers? Why would a no other product, service, charity offers? Why would a customer pay money for whatever your provide?customer pay money for whatever your provide?
ProfitabilityProfitability
Financial information Financial information needs to be assessed:needs to be assessed:
1.1. Costs to run and Costs to run and operate the businessoperate the business
2.2. Sale projectionsSale projections
3.3. Projected Income Projected Income Statements and Cash Statements and Cash Flow StatementsFlow Statements
Additional Resources UsedAdditional Resources Used
Wilson, Jack et al. Wilson, Jack et al. The World of Business.The World of Business., 5 , 5 Ed., Neslon Education Ltd., Canada, 2007Ed., Neslon Education Ltd., Canada, 2007