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 ID: 707675
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PowerPoint Presentations for Small Business Management: Launching and Growing New Ventures, Fifth Canadian Edition
Adapted by Cheryl DowellAlgonquin CollegeSlide2
CHAPTER 1EntrepreneursCopyright © 2013 by Nelson Education LimitedSlide3
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.Explain the nature of entrepreneurship and how it is related to small business.Define small business and identify the importance of small business.Identify rewards and drawbacks of entrepreneurial careers.
Describe the various types of entrepreneurs and entrepreneurial ventures.Discuss several factors related to readiness for entrepreneurship and getting started in an entrepreneurial career.Describe some characteristics of successful entrepreneurs. Copyright © 2013 by Nelson Education Limited1-3
LOOKING
AHEADSlide4
Economically attractive and timely opportunity that creates valueTrue opportunity exists only for entrepreneur who has: interest, resources, and capabilities required to succeedCopyright © 2013 by Nelson Education Limited1-4
ENTREPRENEURIAL OPPORTUNITYLO 1 Slide5
Entrepreneurs: active owner-managerssecond-generation operators of family-owned firmsfranchisees owner managers who have bought out the founders of existing firmsSmall business managers: receive specified compensation do not assume ownership risksCopyright © 2013 by Nelson Education Limited1-5
ENTREPRENEURSHIP AND SMALL BUSINESS
LO 2 Slide6
CriteriaFinancing supplied by one person or small groupLocalized business operations (except marketing)Business’ size small relative to larger competitorsFewer than 100 employeesCopyright © 2013 by Nelson Education Limited1-6
WHAT IS A SMALL BUSINESS?LO 3 Slide7
According to Statistics Canada, in 2009:1,114,915 small businesses in Canada 2.7 million self-employed workers98 % have fewer than 100 employeescontribute about 42 % to Canada’s GDPemploy 48 % of total labour force in private sector46 % have female ownership87 % of Canadian exporters and make up 21 % of Canada’s total value of exports75 % operate in service industries25 % in goods-producing industriesCopyright © 2013 by Nelson Education Limited
1-7WHAT IS A SMALL BUSINESS?LO 3 Slide8
THE MOTIVATORS OF ENTREPRENEURSHIPCopyright © 2013 by Nelson Education Limited1-8
LO 4 Slide9
Copyright © 2013 by Nelson Education Limited1-9KEY SMALL BUSINESS STATISTICS
LO 4 Slide10
DRAWBACKS OF ENTREPRENEURSHIPCopyright © 2013 by Nelson Education Limited1-10
LO 4 Slide11
CAUSES OF BUSINESS FAILURECopyright © 2013 by Nelson Education Limited1-1132 % inadequate research and development23 % lacked competitive advantage14 % due to uncontrolled costs13 % due to poorly developed marketing strategies10 % poor market timing
8 % succumbed to competitor activitiesLO 4 Slide12
VARIETIES OF ENTREPRENEURSHIPCopyright © 2013 by Nelson Education Limited1-12Founder (“Pure” Entrepreneur)brings a new firm into existenceGeneral Manager (“Second Stage” Entrepreneur)
directs the continuing operations of established firmsFranchiseepower is limited by the contractual relationship with a franchising organizationLO 5 Slide13
HIGH POTENTIAL VENTURES VS.SMALL FIRMS AND MICRO BUSINESSCopyright © 2013 by Nelson Education Limited1-13High-Potential Venture (Gazelle)has great prospects for growth
Attractive Small Firmprovides substantial profits to its ownerMicro Business (Lifestyle)provides minimal profits to its ownerLO 5 Slide14
CHARACTERISTICS OF ARTISAN ENTREPRENEURSCopyright © 2013 by Nelson Education Limited1-14Technical skills and little business knowledgePaternalistic approachReluctance to delegate
Narrow view of strategyPersonal sales effortShort planning horizonSimple record keepingLO 5 Slide15
CHARACTERISTICS OF OPPORTUNISTIC ENTREPRENEURSCopyright © 2013 by Nelson Education Limited1-15Business skills and technical knowledgeScientific approach to problemsWilling to delegate
Broad view of strategyDiversified marketing approachLonger planning horizonSophisticated accounting and financial controlLO 5 Slide16
ENTREPRENEURIAL TEAMSCopyright © 2013 by Nelson Education Limited1-16Two or more who work together as entrepreneursHelpful to:
Secure a broad range of managerial talentsEnhance profitsUseful in:High technology businessesAttractive small firmsHigh potential venturesLO 5 Slide17
GETTING STARTED IN ENTREPRENEURSHIPCopyright © 2013 by Nelson Education Limited1-17FOUR ROUTES TO ENTREPRENEURSHIP1. Starting a new business2. Entering a family business3. Opening a franchised business
4. Buying an existing businessLO 6 Slide18
AGE, GENDER, AND ENTREPRENEURIAL OPPORTUNITY Copyright © 2013 by Nelson Education Limited1-18
LO 6 Slide19
REFUGEES AS ENTREPRENEURSCopyright © 2013 by Nelson Education Limited1-19Refugeebecomes an entrepreneur to escape an undesirable situationForeign refugeeleaves his or her native country and becomes an entrepreneur in the new countryCorporate refugee
leaves big business to go into business for themselvesLO 6 Slide20
1-
20PRECIPITATING EVENTSCopyright © 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 Slide21
CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURSCopyright © 2013 by Nelson Education Limited1-21Internal 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 worldsLO 7 Slide22
ENTREPRENEURIAL CHARACTERISTICSCopyright © 2013 by Nelson Education Limited1-22Commitment and determinationLeadershipOpportunity obsession
Tolerance of risk, ambiguity and uncertaintyCreativity, self-reliance and adaptabilityMotivation to excelLO 7