Module 3: Entrepreneurship & Starting a Small Business PDF

Module 1 & 2 recap 1 age Source: McGraw Hill, Understanding Canadian Business, 9th edition  Module 1 & 2 recap mage source: https://strategyzer.com/canvas/business-model-canvas 2...

Module 1 & 2 recap 1 age Source: McGraw Hill, Understanding Canadian Business, 9th edition  Module 1 & 2 recap mage source: https://strategyzer.com/canvas/business-model-canvas 2 2 Module 03: Entrepreneurship and Starting a Small Business Topics of discussion 1. What distinguishes an entrepreneur from a small business owner? 2. Why do people take on the challenge of starting a small business and how can they get started? 3. What is the role of small business in Canada? 4. What does it take to run and manage a successful small business? 5. What are the opportunities and challenges for small businesses that want to go global? 6. Can entrepreneurship exist within a company? Why or why not? 4 4  What is “Entrepreneurship”? Entrepreneurship Accepting the challenge of starting and running your own business Image source: venimo/iStock/Thinkstock 5 5  What is “Entrepreneurship”? ehttps://business.financialpost.com/entrepreneur/small-business/are-you-an-entrepreneur-or-a-small-business-owner-or-both 6 6 What is “Entrepreneurship”? Small business vs. entrepreneurship Small Business Entrepreneurship Growth Slow and steady Rapid and volatile Wealth generation Wealth generation (income (gains and losses) replacement) Innovation – Status quo – identifying focuses on serving competitive needs of an advantage to drive established value customer base Risk Risky Riskier Larger investment Greater uncertainty 7 7  What is “Entrepreneurship”? Small business vs. entrepreneurship ehttps://business.financialpost.com/entrepreneur/small-business/are-you-an-entrepreneur-or-a-small-business-owner-or-both 8 8 Module 03: Entrepreneurship and Starting a Small Business Why people are willing to “accept the challenge” Why people take the entrepreneurial challenge Independence Control, flexibility Profit Challenge Family pattern Immigrants Second career 10 10  Why people take the entrepreneurial challenge New idea, process, or product – Meet an unmet need – More cost-effective – New or better product 11 11 Image source: venimo/iStock/Thinkstock Why people take the entrepreneurial challenge External factors – Social attitudes – Success stories – Job market – Technology – Home based business – Web based business Image source: https://www.americanexpress.com/en-us/business/trends-and-insights/articles/6-incredible-companies-that-started-in-a- 12 12 garage/ Why people take the entrepreneurial challenge Entrepreneurial potential self-assessment https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/business-a ssessments/pages/self-assessment-test-your-entrepreneurial-potent ial.aspx 13 13  Why people take the entrepreneurial challenge Entrepreneurial attributes Self-directed Self-nurturing Action-oriented Tolerant of uncertainty Able to learn quickly Highly energetic Image source: venimo/iStock/Thinkstock 14 14  Why people take the entrepreneurial challenge source: https://blog.gfar.net/2016/10/24/is-the-road-of-an-entrepreneur-ever-a-straight-one/ 15 15  Why people take the entrepreneurial challenge 16 16 e: https://www.ic.gc.ca/eic/site/061.nsf/vwapj/CNF_BSR-NEC_TNS_2002-2014_May2018_eng.pdf/$file/CNF_BSR-NEC_TNS_2002-2014_May2018_en  Why people take the entrepreneurial challenge Lowest vs. highest failure rates – Easiest to start vs. hard to start – Barriers to entry (upfront investment, specialized equipment, laws and regulations, expertise (training), time, etc.) Image source: Daisy-Daisy/iStock/Thinkstock 17 17  Why people take the entrepreneurial challenge Challenges – Getting new customers – Managing time – Keeping work and family tasks separate – Managing risk Image source: RamCreativ/iStock/Thinkstock 18 18 Module 03: Entrepreneurship and Starting a Small Business Small business in Canada Importance of small business in Canada Small business – Independently owned and operated – Not dominant in its field – Meets certain standards of size (typically 1 to 99 employees) 20 20  Importance of small business in Canada ge source: http://www.ic.gc.ca/eic/site/061.nsf/eng/h_03018.html#point1-1 21 21  Importance of small business in Canada 22 22 Image source: https://www.bdc.ca/en/articles-tools/business-strategy-planning/manage-business/pages/10-things-didnt-know-canadian-sme.aspx  Importance of Small Business in Canada Government support Services to help entrepreneurs and small businesses succeed – Business Development Bank of Canada (BDC) – Innovation Canada mage source: Business Development Bank of Canada (Government of Canada), Innovation Canada (Government of Canada) 23 23 Importance of Small Business in Canada Sole Partnership Corporation Proprietorship What is it? A business A legal business A business owned and relationship operated as a operated by one between two or separate legal person more people entity (distinct (partnership from its owners) agreement) Advantages Simple/easy to Sharing of Separate legal create resources and entity expertise Limited liability Disadvanta No distinction No distinction More ges between between expensive to owner and partners and setup and business business maintain Unlimited Conflict liability resolution Unlimited 24 24 liability Module 03: Entrepreneurship and Starting a Small Business Getting started - improving the chance of success  Ways to get into your first business venture Learn from others Get some experience – Entrepreneurship – Work for others courses – Talk to entrepreneurs – Build a network Image Source: Askold Romanov/iStock/Thinkstock 26 26  27 27 mage Source: https://uwaterloo.ca/entrepreneurship/  Ways to get into your first business venture Incubators Provide space, services, advice and support to assist new and growing businesses become established and successful – Hands-on management assistance, education, technical and vital business support services, networking resources, financial advice Image source: Velocity and Y Combinator 28 28  Ways to get into your first business venture Buy an existing business – Established customer base, existing relationships with suppliers and lenders, established reputation – Considerations: Why are they selling the company? Do your due diligence – any potential issues? What price to pay? Image source: Albert Floyd/iStock/Thinkstock; vectorikart/iStock/Thinkstock 29 29  Ways to get into your first business venture Buy a franchise – Benefiting from the experience and reputation of the franchisor – Working with a proven product/service – Ongoing support from the franchisor – Lack of control – Resources needed to start may be significant Image source: International Franchise Association 30 30  Ways to get into your first business venture Inherit/take over a family business – Established reputation and relationships – Unique challenges Ownership Control issues Performance issues – Continuation rates are low Lack of expertise in family Lack of succession plan Image source: vectorikart/iStock/Thinkstock 31 31  Test your knowledge Sally Wright has just taken early retirement, including a substantial retirement allowance. She wishes to continue working and wants to invest her retirement allowance in her own small business, and feels comfortable doing so with an established product and process. She worked for the same employer in the same job all of her working career and therefore has no experience in running her own business. In starting her own business she would be well-advised to: A. start the business from scratch. B. buy an existing small business.  C. buy a franchise. D. work for someone in an existing small business for the next 10 years. 32 32 Module 03: Entrepreneurship and Starting a Small Business Running a successful small business  Managing a small business Figure: Figure 7.3, Understanding Canadian Business, 9th Cdn ed. © 2016 McGraw-Hill Education Limited 34 34  Managing a small business Good business management includes: Planning your business Knowing your customers (marketing) Managing your employees (human resource development) Keeping records (accounting and financial management) Financing your business Image source: robuart/iStock/Thinkstock 35 35  Managing a small business Business plan A detailed, written agreement that describes: – The business opportunity – The business environment – Target market and strategy to reach your market – Your people – Your operations – Projected revenues, Image source: vasabii/iStock/Thinkstock 36 36 expenses and cash flows  Managing a small business Sample outline of a business plan See Figure 7.4/page 280 of your text Check out sample plans at Business plan template for entrepreneurs | BDC.ca Image source: robuart/iStock/Thinkstock 37 37  Managing a small business What’s wrong with many business plans? - too focused on the numbers - too positive Image source: Nongkran_ch/iStock/Thinkstock 38 38  Managing a small business Image Source: https://smallbusinessbc.ca/article/10-common-business-plan-mistakes/ 39 39  Managing a small business Financing your business Consider costs to launch a business, such as: – Materials and equipment – Salaries – Services – Marketing – Rent Image source: vasabii/iStock/Thinkstock 40 40  Managing a small business Capital sources of successful entrepreneurs ge source: http://www.ic.gc.ca/eic/site/061.nsf/eng/h_03018.html#point1-1 41 41  Managing a small business 1.What are the ingredients of a successful financing pitch? 2.What mistakes do entrepreneurs make when requesting financing from the Dragons? Image source: http://www.cbc.ca/dragonsden/ 42  Managing a small business Crowdfunding: Raising money from a large number of people online Check out Canada’s history with crowdfunding at: http://www.cbc.ca/news/canada/montr eal/what-10-000-kickstarter-projects-r eveal-about-canada-s-entrepreneurs-1.4084372 mage sources: Kickstarter, Indiegogo 43  In the news sources: http://business.financialpost.com/entrepreneur/1018-biz-mtb-clearbanc 44 Module 03: Entrepreneurship and Starting a Small Business Advantages and disadvantages small businesses have in entering global markets  Test your knowledge Which of the following best describes the opportunities available to small businesses in international markets?  A. The world market is a much larger and potentially more lucrative market than the Canadian domestic market. B. The threat of terrorist activities prevents small businesses from competing internationally. C. Most foreign buyers prefer to deal with large, well-known corporations rather than small businesses. D. Higher business costs eliminate the profit 46 46 opportunities in global markets.  Small business and international prospects Opportunities World market is larger and can be more lucrative Better economies of scale Absorb excess inventory Extend product life Hurdles Financing How to get started? Lack of cultural understanding Amount of paperwork Image source: vasabii/iStock/Thinkstock 47 47  Small business and international prospects Advantages over large businesses Able to adapt quickly due to less bureaucracy Provide more personal and customized service Image source: vasabii/iStock/Thinkstock 48 48 Module 03: Entrepreneurship and Starting a Small Business Entrepreneurship within organizations  Test your knowledge Ketan is an intrapreneur for a multinational electronics company. As an intrapreneur, Ketan will: A. be expected to recruit new managerial talent for his firm.  B. use the firm's existing resources to develop new products. C. be concerned mainly with improving the firm's public image. D. concentrate on creating new ventures that can be spun off to become independent firms. 50 50  Entrepreneurship within firms Intrapreneurs:creative people who work as entrepreneurs within corporations mage source: pking4th/iStock/Thinkstock 51 51  Discussion Question What does an entrepreneurial culture within a firm look like? Never Give Up YouTube Channel. (2024, August 1). Jeff Bezos on Failures at Amazon. YouTube. 52 52 https://www.youtube.com/watch?v=I9CKa90Leh0  Discussion Question What does an entrepreneurial culture within a firm look like? allows employees time for creative thinking and idea generation encourages collaboration and expertise sharing embraces failure and the related learning hires traits consistent with entrepreneurship promotes leaders that can make decisions and take risks has a long-term view Image source Apple Inc. Image source: 3M 53 53 Image Source: Amazon Important dates m 1 t e r M id x am a y, st @ e e s d T to b e r 1 u Oc pm – 8 : 3 0 0 p m 1 54 54 For next week 4 : d u le Mo ations t - p e r e n - O g e m o rl d a n a g W M cin a n d o d u o d s P r G o s Clas ices ter 10 e rv C h ap S e ad R 55 55