Entrepreneurship Basics

Problems Faced by Entrepreneurs

• Many businesses fail
• Refer to page 69 in Made in Canada

Industrial Incubators

• Industrial incubators such as the Venture Center in Toronto, help new/inexperienced entrepreneurs overcome problems that can cause a business to fail
• Refer to pages 69-70 in Made in Canada

Franchises

• A franchise is when an individual (franchisee) buys the rights to operate a business using a company's (franchisor) brand, products, and systems.

Franchise Industries

• Industries that typically have franchises include: fast food chains, retail stores, and service-based businesses.
• Examples in fast food chains include: McDonald's, Subway, and KFC.
• Examples of retail stores include: 7-Eleven and The UPS Store.
• Examples of service-based businesses include: Anytime Fitness, Hilton Hotels, and Jiffy Lube.
• Franchising used when companies want to expand quickly with minimal direct investment while leveraging franchisees' capital and local market expertise
• Refer to pages 72-74 in Made in Canada

Franchise Agreements

• Franchisees sign a legal contract outlining fees, rules, and operational requirements.

Initial Investments

• Franchisees pay an upfront franchise fee to the franchisor

Royalty Fees

• Franchisees pay ongoing royalties (a percentage of revenue) to the franchisor

Brand & Operational Support

• Franchisors provide training, marketing, and operational guidance

Corporations Defined

• A corporation is a legal entity separate from its owners (shareholders)
• Corporations can enter into contracts, own property, and be taxed independently

Key Features of a Corporation

• Limited Liability: Shareholders are not personally responsible for company debts
• Perpetual Existence: The corporation continues to exist even if owners or leadership change
• Ability to Raise Capital: Corporations can issue stock to raise funds
• Separate Legal Identity: A corporation can sue or be sued independently of its owners

Types of Corporations

• Public Corporation trades shares on stock exchanges (e.g., Apple, Tesla)
• Private Corporation is privately owned, not traded publicly (e.g., SpaceX, Chick-fil-A)
• Nonprofit Corporation operates for social or charitable purposes (e.g., Red Cross)

Benefits of Being an Entrepreneur

• Independence and control are benefits, because Entrepreneurs make their own decisions, and are not bound by a boss or corporate structure
• Financial Growth Potential: Unlike a fixed salary, business owners can scale their income based on success
• Pursuing Passion: Many entrepreneurs start businesses based on their interests or expertise
• Flexibility: Entrepreneurs have control over work schedules and business direction
• Legacy & Impact – Entrepreneurs can build businesses that have a lasting effect on their community or industry.

Disadvantages of Being an Entrepreneur

• Financial Risk – Business success is uncertain, and entrepreneurs may face losses or debt
• Long Working Hours – Unlike a 9-to-5 job, entrepreneurs often work long and unpredictable hours
• Lack of Benefits – No employer-provided health insurance, paid leave, or retirement plans
• High Stress – Managing business challenges, employees, and competition can be overwhelming
• Uncertain Income – Earnings can be inconsistent, especially in the early stages

Canada's Industrial Expansion (Immigration POV)

• Immigration provided a steady labor force for factories, railways, and mining sectors.
• Immigrants often faced poor conditions, low wages, and discrimination.
• Language barriers and limited access to workers' rights made improvement difficult

Canada's Economic Development

• Abundant natural resources (timber, minerals, and oil) supported logging, mining, and energy industries.
• These industries created jobs, exports, and strengthened the economy
• Reliance on natural resources led to deforestation, pollution, and resource depletion
• Sustainability and conservation efforts became more prominent in government policies.

1. Advantage: Private Enterprise over Crown Corporation (consumers in society).

• Advantage crown corporation over a private enterprise (Private enterprise are usually more competitive than crown corporations)
• Refer to page 106 in Made in Canada

2. Main Reasons: People Become Entrepreneurs

• Independence
• Filling Gaps
• Financial Success Possibility
• Benefit Society

3. Crown Corporations privatized

• Privatization will improve the performance of the crown corporation

4. Franchisee

• Franchisee cannot make major decision for the store

5. 3 Examples Crown Corporations

• CBC, Canada Post, and The Bank of Canada

6. Reason(s): Start A Business With Close Friend?

• No, it can potentially ruin the relationship because of business decisions

7. Newly Established Businesses Fail (Number)

• 4/5 businesses fail

8. Reasons: Entrepreneurs Fail

• Fail to understand market place

9. Industrial Incubator (Purpose)

• Provides favorable conditions and promote/ support new skills and ideas

10. Privatizing Crown Corporations (Benefits Subjective)

• Benefits are subjective to industry ran in
• Increases efficiency and increases flexibility

11. Franchise (Example)

• Mcdonalds is an example of a franchise

12. Votes dictated (Business Type)

• The number of shares one has in corporation

13. Traits (Successful Entrepreneurs)

• Self-confidence and motivation

14. Losing Income Corporation

• They can lose their source of income

15. Cooperatives (Qualities)

• Is most likely looking for service not profit

Definitions of a Sole Proprietor

• One person owns or manages it
• Receives all the profits
• Is responsible for all the debts

Definition of Board of Directors

• Board members is managed by corporation

Benefit: Franchising to Franchisors

• They are paid franchisee fees

Simiarities and Differences - Proprietorship and Partnership

• Similar- owners responsible for all debts and profits &unlimited liability
• Different Sole: 1 owner with unlimited liability vs
• Partnership: two/more combine profit/debt resources

Franchising (Disadvantages)

• Franchisee paid royalty, fees, overall franchise purchases, creative control

###. Reasons- become entrepreneurs

• They'd work for themselves, and prefer identify gap believed to be filled, have possibility Financial Success.

NOT a Share Class Name (Publicly Traded)

• Option D. Private Bonds

Partnership (Example Business)

• Ben & Jerry's is a prime example of a partnership

Crown Corporation ( Example )

• Canada Post is the best example of Crown Corporation

#. Entrepreneur ( Characteristics)

• Willing to take on risk

Sole Proprietors ( Benefits)

• More Flexibility is a huge benefit

One Advantage, Private Enterprise Over Crown Corp

• Page 106

One Goal Crown vs Private Enterprises

• Crown, Government Serves. public interest (shareholders) focus profit

Traits- Successful Entrepreneur

• Resillient, Risk Taker, Responsible (Option D - All of the Above)

Action: Franchisee ( No longer )

• Rely on franchisor

Nationalize Corp Actions:

• Government nationalizes a corporation when public unment (Expects better outcomes from govment)

What Business model grants right operate?

• That is franchise (option D)

Advantage: Franchise

• Lower Start up Costs

What economic creates value opportunity exploitation ?

• Enterpertual profit is the answer

Based votes Owner ship model?

• C operation

Reason Business Fail?

• option D. all of the above

Not Associated- Franchise MDOEL

• In expensive start up is not part of the model(option B)

Traits- Cooperative Business structure NOT?

• Option B. unlimited liability. * That is for partnership

Control Cooperation Structure

• option B. common share holders, common stock holders

Traits - Enterpertual

• option C . risk avoidance is not part of the mindset

voting Corporation structrure

Option . B One vote per share in corporation

Qualities, Successful Entrp.

• Option take risks hardwork adaptability strong work ethic good communication skills knowledgpassion

Not benefit. For Incubators

Option C Allow large companies expand lower cost

Actions- Individual entrepreneurs?

• Option B Work HIGH positions

Advantage. , franchising

A the business is cost efficient

Trait Single Most important

F - Business requires skills and chararcteristics that supports them

What is an enterpreneur

A. an individual who agressively starts, expands a business

What is not a problem for entrepeneurs

B too much money

Which is not a Franchise

D. Walmart

Not coop

• A. McDonalds is not a CooP or a Credit Union

Not a characteristic of an entrepreneur

• D Gambling

Customers can pay if

• B Coop

Unlimitedly liability is

• C Sope Propertershiip % Partnership

why crown corp prizvati

:Privatization will improve the performance of the corporation

Key Quality Entrepreneur

Self confidence motivated

Is one reason businesses fail

• Not understanding market is one reason

How do new Businesses Fail

• New business can fail due to lack of funding or no mentorship
• One needs A unique value opportunity

One Qualities- Sole Propetorship

• Owner has unlimited liability and easy to start and manage
• Limitedly liability (Corporation)
• You sell limited shares

Traits Coop NOT have?

Option :unlmited liability

Crown vs, cooperation

• Crown- govern (services) vs cooperation profit- privately

Entrepreneur differ from employees?

• Option
• Entrepreneurs start businesses from scratch using skill ,

What is A franchise?

• A franchise is a buissness management that bought expansion beyound

Benefit vs becoming entrepreneur

• A. not being Lazy because one needs Hardworking

Actions Entrepreneurs would DO- smart?

B they will do market research

Traits Entrp: not lazy

• Entrp. are not lazy (Gurfathe)

partnership vs corp

• Partners: Unlimited liability easy
• Corp is opposite

Qualitiy of A partnership

Partnerships are often easier to form Shares traded a stock exchange The following which is character tics, public cororpation

What helps Entre for success

• Persistence is the key

role creativity ?

Creativity Essential Problem-Solving"

Board of Directors

The Represent Interest"

Not advantage being franchise?

d) a. (complete control business. the individual has LESS in franchise so not option A!

what does entrep do?

Create value by the market opportunity costs A. Cooperations B. Partnershp;

Sole Propetorship

D. BCHP

Action- Smart Entrepreneur?

NOT educated Risk is important

What's the difference between sole prop and corporation?

• Government-owned vs. privately owned
• Aim to serve public good vs. privately owned for Shareholders.

What NOT Characteristics Sole Properitorship

• Ownership can be easily to an other person

The advantage for owners and investors

• Limited liability ,for owners

Corporate Structure

Corporation owns by share holders

franchise is

Grants individuals right operate established brand

Best for large capital raising?

• Is best with corporation

MC: What should entrepreneur NOT do when pursuing a Product .

• Option be money is not one of the drivers

Entrepreneures qualities

• Just A and C, Determnation and hardworking

Neg CORPORATIONS?

• Option B. Strict Redulation

Entrenure become-Reason?

• To WORK for the self

What do Entreperuens look for to start coop?

• • local coffee independtely BRAND is the location

Entrepenr: role differences entreperens franchise

F: Provides brand recognition and business support

Small bus do not want for the the government c) The

Crown, what structure it is with this corporation structure

Is owned by government provides services.

Molly, labor Hilarae ,A The Discovery oil Alberta’s High tariffs protect domestic industry, Canada Industry of Technology during the 20th

Advantages Disadvantage and structure Sole B. Established brand recognition and support from the franchisor General Partnership In

Not Common Type in Sole Propriorship and Canada

Corporation charactertic It it’s sperate legal entity it’s owners

Entrepreneur best Description Creating innovative solutions to solve adapting in change And

Frachise (Daya) LImited for The owners Best :Business that grants to operate under its established models brand ! Raise through sale

• FRQ The three examples are provide examples of situations

Test your knowledge of entrepreneurship with this quiz. Questions cover business failure rates, cooperative structures, corporate control, franchise models, sources of capital and the role of a franchisor.