04+-+Chapter+3 - MGTA03 – Intro to Management – Week 4...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: MGTA03 – Intro to Management – Week 4 MGTA03 Please read Chapter 3: Please Entrepreneurship and Small Business and Lecture Outline – Main Points Lecture Small business: Scale and Importance Small business: Failure and Success Entrepreneurs: Demographic Characteristics Entrepreneurs: Psychological Characteristics Introduction Introduction Canada is market economy Anyone may start a business NO fees, NO forms, NO licences NO government permission To start a new business: just.... begin Textbook: 380 new businesses every day! Small Business Small Hard to define Hard Textbook: Textbook: "Owner-managed business / less than 100 "Owner-managed employees" employees" Some problems with the definition..... Small Business in Canada Small Impossible to know many there are We can only estimate Recent government estimate: 2.1 million Small Business in Canada - Size Distribution Small number of number of number businesses employees % of total 1.1 million 1.1 678,000 175,000 43,000 43,000 13,900 9,334 2,029 2,029 55% 33% 8.5% 8.5% 2.1% 0.7% 0.4% 0.4% 0.1% self-employed self-employed 2-5 6 – 19 20 – 49 50 – 99 50 100 – 499 500 + 500 cumulative % 55 55 88 88 96.5 96.5 98.6 98.6 99.3 99.3 99.7 99.7 99.8 However many there are: > 99% can be called "small" Workers in Small Businesses Workers busineses band avg. band size workers 1,146,000 1 1,146,000 680,000 2-5 680,000 175,000 6 - 19 175,000 43,500 20 - 49 13,900 49 - 99 1 2.5 9 25 60 Note: estimates by Prof. Bovaird total total workers 1.14 million 1.70 million 1.58 million 1.09 million 834,000 % cumul. % 9.6 14.2 13.1 9.1 7.0 9.6 23.8 36.9 46.0 53.0 Conclusions: Conclusions: 2 million + businesses in Canada 98% of Canadian businesses are “small” 10% of Canadians are self-employed 25% of Cdns work in business with < 5 employees 50% of Cdns work in business with <50 employees Small Business - Survival Rate Small Year Failure Rate % Year Failure 1 23 2 22 3 18 4 16 5 14 6 13 7 12 8 11 9 10 10 10 Survival rate % 77 61 50 42 36 31 27 24 22 20 "failure rate" = % of remaining survivors which fail in any given year. During year 1 23% of 100 firms fail, leaving 77. Year 2, 22% of the 77 survivors (16 firms) fail, leaving 23% 61 of the original 100. Year 3, 18% of the 61 survivors (11 firms) fail, leaving 50. 61 Survival Rates – Start-Ups in USA Survival By end Year By 2 5 10 % that fail that 40 60 90 Source: US Commerce Department, US SBA; Dun & Bradstreet, Enterprise Source: Planning System, Canadian Industrial Innovation Centre, Module 1, p. 4 Who Starts A Business? - Entrepreneur Who Individual who organises and co-ordinates the activities required to start new business "Entrepreneur" from French: entrer: to enter entrer: prendre: to take prendre: Interesting Fact About Entrepreneurs Interesting Prof. Jeffrey Timmons (Harvard Univ.) is Prof. authority on new business start-up authority Researched attitudes and beliefs of wouldbe entrepreneurs. Most people think the odds are even worse! Entrepreneurs: Personality Traits Entrepreneurs: High NAch (Need for Achievement) Internal locus of control Internal Comfortable with uncertainty Comfortable Willingness to take calculated risks Self Confident Entrepreneurs: Demographic Traits Entrepreneurs: Children of entrepreneurs ("Pull" factors) Immigrants/children of immigrants ("Push" factors) Between ages 30 - 40 (Managed risk) Not academically inclined (Doers not thinkers) Women less likely to fail (Better risk managers) ...
View Full Document

Ask a homework question - tutors are online