exam review module 3 Flashcards
why start a business
For profit, independence, opportunity, challenge
Successful entrepreneurs are
self-directed, determined, action-oriented, highly energetic, tolerant of uncertainty, fast learners.
Small business
business that is independently owned & operated, not dominant in its field, meets a certain standard of size in terms of employees and/or revenues.
small business contribute
SB’s contributes 25-40% of Canada’s GDP.
SB’s employ
~70% of total private labour force.
Many SB’s fail due to
managerial incompetence and inadequate financial planning. Or, too little capital, stretching out resources, underestimating market growth, not allowing for setbacks, unexpected expenses.
SB’s can succeed due to
product not being able to be made in mass-production techniques, sales are not large enough to appeal to large firms, owner pays attention to new competitors, business is in a growth industry.
SB requires a business plan. needs:
Needs: cover letter, exec. summary, company background, management team, financial plan, capital required, marketing plan, location analysis, manufacturing plan, appendixes.
To fund a SB’s capital
personal savings, relatives (love money), banks, finance companies, venture-capital organizations, government agencies, angel investors, etc. Equity or Debt financing.
SB’s often have trouble finding competent employees.
Training & grooming employees is a challenge.
Foreign buyers rather deal with individuals than large corporations because
- SB’s can support a wide variety of suppliers and can ship products more quickly.
- SB’s give more personal service.
Disadvantage of SB in entering a global market:
- financing is difficult to find
- people don’t know how to get started
- people don’t understand cultural differences in foreign markets
- bureaucratic hurdles are different in foreign countries.
