The Importance of Entrepreneurship

Entrepreneurship is important for economic growth.  New companies create employment, contribute to a nation’s GDP, and bring new and innovative products and services to consumers. Some small business founders like Henry Ford and Thomas Edison have even gained places in history. Others, including Bill Gates (Microsoft), Mike Lazaridis (Research in Motion), Steve Jobs (Apple Computer), and Larry Page and Sergey Brin (Google), have changed the way global business is done today.

Entrepreneurship plays a vital role in the growth and development of economies and societies. Here are five key points highlighting its importance:

1. Economic Growth and Job Creation. Entrepreneurs are critical drivers of economic development. By establishing new businesses, they contribute to GDP growth and generate employment opportunities. Startups often create jobs directly within their operations and indirectly by fostering demand for suppliers, service providers, and other industries. This dynamism boosts local economies and reduces unemployment. For example, small and medium-sized enterprises (SMEs) are significant contributors to job creation in both developed and developing economies.
2. Innovation and Technological Advancement. Entrepreneurs often introduce groundbreaking ideas, products, and services that improve lives and solve societal problems. By challenging traditional methods, they encourage innovation and technological progress. Many technological breakthroughs, such as smartphones and e-commerce, originated from entrepreneurial ventures. These innovations not only benefit consumers but also drives competition, compelling existing businesses to adapt and improve, further advancing technology and efficiency.
3. Improved Standard of Living. Entrepreneurship leads to the development of goods and services that address consumer needs more effectively. By making products more accessible, affordable, or efficient, entrepreneurs enhance the standard of living. For instance, affordable transportation services like Uber or low-cost consumer goods offered by startups improve daily life for millions. Moreover, as businesses grow and incomes rise, employees and communities benefit from better infrastructure, education, and healthcare.
4. Economic Diversification and Resilience. Entrepreneurship encourages diversification by fostering businesses in various industries, including emerging sectors like renewable energy, biotechnology, and digital technologies. A diversified economy is less reliant on a single industry, making it more resilient to economic shocks. For example, in resource-dependent countries, encouraging entrepreneurship in non-resource sectors helps reduce vulnerability to fluctuations in global commodity prices.
5. Empowerment and Social Change. Entrepreneurship empowers individuals, particularly marginalized groups, by providing opportunities to take control of their economic futures. Women-led businesses, for instance, are transforming communities by creating jobs and addressing gender inequalities. Additionally, social entrepreneurs tackle pressing societal issues like poverty, education, and climate change, driving positive change through sustainable and innovative solutions. Initiatives like microfinance have empowered countless individuals to start businesses and improve their lives.

Entrepreneurship is not just about starting businesses; it is a catalyst for economic prosperity, innovation, and societal transformation. By fostering creativity, empowering individuals, and addressing pressing global challenges, entrepreneurship builds a more sustainable and equitable future. Governments and institutions must encourage and support entrepreneurial endeavors to unlock their full potential.

“A society becomes greater if the employment base is large and diversified. It brings about changes in society and promotes facilities like higher expenditure on education, better sanitation, fewer slums, a higher level of homeownership.”^[1]

“Entrepreneurship increases income levels, therefore improving standards of living. Entrepreneurs identify challenges in the lives of customers and provide appropriate business solutions. Additionally, they hire new employees who receive remuneration and this income gets circulated in the economy. All of the spending and salaries generate incremental wealth, therefore improving standards of living.”^[2]

“Entrepreneurs play a key role in increasing the standard of living in a community. They do this not just by creating jobs, but also by developing and adopting innovations that lead to improvements in the quality of life of their employees, customers, and other stakeholders in the community. New and improved products, services or technology from entrepreneurs enable new markets to be developed and new wealth to be created. Additionally, increased employment and higher earnings contribute to better national income in the form of higher tax revenue and higher government spending.”^[3]

Reasons Small Businesses Succeed or Fail

The success or failure of small businesses is influenced by a variety of factors. Understanding these can help entrepreneurs make informed decisions and improve their chances of success.

Small Business Success

Success hinges on strategic planning, adaptability, customer focus, and sound financial management. Small businesses must remain proactive, monitor performance, and adapt to challenges to thrive in a competitive environment.

Here are some of the reasons small businesses are successful:

1. Clear Vision and Strong Planning. A well-defined business plan helps set realistic goals, understand market needs, and devise a growth strategy. Example: A bakery with a unique product line tailored to health-conscious consumers can attract a loyal customer base.
2. Financial Management. Successful businesses monitor expenses, optimize pricing, and secure adequate funding to manage operations and growth. Example: A café maintaining detailed cash flow records and controlling costs can reinvest profits into expansion.
3. Understanding the Market and Customers. Businesses that focus on customer needs, preferences, and feedback often outperform competitors. Example: An e-commerce store offering personalized shopping experiences can build customer loyalty.
4. Adaptability and Innovation. Thriving businesses adapt to changing trends and innovate to stay competitive. Example: A clothing retailer that shifts to online sales during a pandemic ensures continued revenue.
5. Effective Leadership and Teamwork. Skilled leaders who motivate teams, make informed decisions, and delegate effectively can drive success. Example: A software startup with a strong leadership team and skilled employees can quickly scale operations.

Small Businesses Failure

There are several factors that contribute to the failure of small businesses including insufficient cash flow, pricing issues, and lack of focus. However, the main reason is the lack of research and offering a product or a service there is no market for.^[4]

Failures often stem from internal factors like poor planning, financial mismanagement, or lack of experience, as well as external factors such as economic shifts or market saturation.

Here are some of the reasons small businesses fail:

1. Lack of Planning. Poor business planning, unclear goals, or a lack of market research often lead to failure. Without a solid business plan, owners struggle to define their target audience, competitive strategy, or financial projections. Example: A restaurant opening without researching local demand or competition may struggle to attract customers.
2. Inadequate Funding. Insufficient startup capital or poor financial management can cripple a business. Many small businesses underestimate costs or fail to secure necessary funding to sustain operations. Example: A retail store running out of cash before building a stable customer base will likely close.
3. Poor Marketing and Customer Understanding. Businesses that fail to connect with their target audience or market their products effectively often see limited growth. Example: A business using outdated marketing strategies may not reach modern, digital-savvy customers.
4. Ineffective Management. Inexperience, poor decision-making, or inability to delegate can lead to operational inefficiencies. Example: A business owner handling everything alone may burn out and neglect crucial aspects of the business.
5. Economic or Market Challenges. External factors like economic downturns, increased competition, or changing market trends can negatively impact businesses. Example: A travel agency may struggle during a recession or global health crisis, such as COVID-19.

Small Business Statistics

While there are different ways to define a small company in Canada, the most straightforward way is to look at the number of employees. Companies with less than a hundred members of staff are considered small businesses in Canada. As more consumers are shopping online, small companies often do not have the workforce or the know-how to create an online presence, nor pricing, that could compete with larger companies. As a result, many small Canadian companies are struggling and they do not expect their sales to increase. Yet, small businesses are the backbone of the Canadian economy, making a significant contribution towards the Canadian gross domestic product (GDP). They are also vital in keeping the employment numbers up in Canada.^[5]

Below are some Small Business Statistics in Canada:^[6]

• Each small businesses may only employ a few people, but combined, they are the biggest employers in Canada.
• According to data from Statistics Canada, in 2021, 98.1% of all employer businesses in Canada were small businesses.
• In 2021, they employed 63.8% of the Canadian workforce which represents 10.3 million people. Medium-sized local businesses employed 21.1% and large businesses 15.1%. These percentages represent 3.4 and 2.4 million people respectively.
• Data on new small businesses show that 21.5% of small businesses close before the end of their first year. About 50% of small businesses survive for five years and about 33% get to celebrate ten years in business.
• About 42% of small businesses fail because they have not researched the market and are selling a service or a product that customers are not interested in.
• About 29% of small companies have to close because they run out of money and 67% of small business owners are using personal funds to try to keep the business running, which is not a strategy that can be applied in the long term. Other reasons that contribute to small business failures include not having the right team (23%), being out-performed by their competition (19%), pricing issues (18%), ignoring the customers’ needs (14%), lack of focus (13%), and failure to make necessary changes (7%).
• About 73.9% of Canadian companies have less than ten employees. 55.3% employ less than five people and 18.6% have between five and nine members of staff.
• Baby boomers are the biggest business-owning age group, owning 42% of Canadian companies. The number of small businesses owned by millennials is growing with 24% of all small companies owned by a millennial in 2019.
• Small and medium-sized companies contribute over half of Canada’s GDP.
• About 58% of small business owners believe a work-life balance is crucial for long-term survival.
• According to Start Up Canada, there are currently about 3.5 million entrepreneurs and 901,794 small businesses in October 2021 in Canada.

Entrepreneurial Traits

An entrepreneur is someone who starts, owns and operates a business. It is difficult to generalize about the kind of people attracted to the idea of starting their own business because entrepreneurs are increasingly diverse. An interesting portrait of Canadian entrepreneurs emerged from a 2019 BDC survey of 1,025 Canadian business owners. Among the findings:^[7]

• Twenty-eight percent were women, up from 11% 40 years ago.
• Newcomers to Canada were twice as likely to start a business as their Canadian-born counterparts.
• The number of Canadians under 35 who started a business increased by 80% between 2014 and 2018.

Key Traits

While entrepreneurs do require many skills and abilities, they may not have all the skills they need to run a business successfully.  In these cases, an entrepreneur might hire a consultant, a contract employee, or a full-time employee to support the business tasks for which the entrepreneur is lacking skills or may not have the time to focus on. For example, as an entrepreneur, if accounting is your weakness you might hire an accountant, payroll service, or bookkeeper. If sales or marketing are not skills you have developed you might hire a salesperson or contract a marketing company to help you build marketing campaigns. While hiring consultants, services, or employees does cost money, you can rest assured it is being done accurately, and the investment should pay off.

Some of the key traits found in entrepreneurs include the following.

1. Passion. “Work ethic and passion go hand in hand. It takes work ethic to keep the business strong, and it takes passion to feel motivated enough to maintain a good worth ethic. That feeling of success is priceless, and it’s how entrepreneurs feel when they see great outcomes from the effort they put into their work.”^[8]
2. Risk Tolerance. “Taking risks helps businesses find new ways to differentiate themselves from the competition, which is especially helpful in saturated markets. In the event the risk doesn’t have the intended result, the entrepreneur can still apply the valuable lessons learned to future business decisions. Microsoft’s Bill Gates is credited with the quote, ‘To win big, you sometimes have to take big risks.’ Gates certainly took risks throughout the history of Microsoft, but perhaps his most notable risk was leaving Harvard during his sophomore year in 1975 to found the company. His vision was ‘a computer on every desk and in every home,’ which was something no one could have conceived of at the time. The risk he took to make that vision a reality paid off.”^[9]
3. Persistence. “While many successful entrepreneurs are comfortable with the possibility of failing, it doesn’t mean they give up easily. Rather, they see failure as an opportunity to learn and grow. Throughout the entrepreneurial process, many hypotheses turn out to be wrong, and some ventures fail altogether. Part of what makes an entrepreneur successful is their willingness to learn from mistakes, continue to ask questions, and persist until they reach their goal.”^[10]
4. Innovative. “Innovation is a characteristic some, but not all, entrepreneurs possess. Fortunately, it’s a type of strategic mindset that can be cultivated. Some of the most successful startups have taken existing products or services and drastically improved them to meet the changing needs of the market.”^[11] “Companies that thrive are often built from the wild creativity of their creators. With aggressive competition these days, entrepreneurs are forced to come up with original ideas that differentiate their companies from others. Creative entrepreneurs consider the possibility that the traditional solution isn’t good enough.”^[12]

There are three characteristics of entrepreneurial activity:

1. Innovation: Coming up with new ideas, pivoting and adapting when a consumer or economic environment changes.
2. Operating a Business: You will need to understand the functional areas of business, how to analyze the internal and external environments, make decisions, and more.
3. Risk-taking: Entrepreneurs need to be able to deal with risk. There are no guarantees that the business will be successful or remain successful. You will need to learn how to mitigate risks.

Motivational Factors

There are some common motivational factors identified in many entrepreneurs. For instance, entrepreneurs are often motivated by much more than money and most start their business to become their own boss. In BDC’s survey, when asked why they became an entrepreneur, the most popular answer—cited by 70%—was independence, autonomy, and flexibility. About one in two mentioned passion or self-fulfillment and one third cited financial reasons.^[13] Refer to Figure 9.1 below to view survey results for motivational factors that influence entrepreneurial success.

“The 2019 BDC survey of business owners sheds additional light on what makes Canadian entrepreneurs tick. Three in four said they had to deal with financial insecurity, significant stress, and a lack of benefits. Yet, 90% were professionally satisfied.”^[14]

Types of Entrepreneurs

There are many types of entrepreneurs and depending on which website you read, you may see a list of five to fifteen types of entrepreneurs. The type of entrepreneur you are depends on your goals and personal characteristics (e.g., skills, knowledge, creativity, interests, preferences, situation in life, drive, determination, etc.).

The Indeed Editorial Team (2023) provides the following list of nine different types of entrepreneurship.^[15]

1. Small business entrepreneurship. People interested in this category are probably interested in making a profit that supports their family and a modest lifestyle.  They often run the business and work in it.  They hire local employees and family members. Local grocery stores, hairdressers, small restaurants, small boutiques, consultants, plumbers, and accountants are a part of this category.
2. Large company entrepreneurship. People in this category are often in a team of executives who know how to sustain innovation. Small business entrepreneurship can turn into large company entrepreneurship when the company grows quickly or when a large company acquires a small business. Microsoft, Google, and Disney are examples of this category.
3. Scalable startup entrepreneurship. People in this category look for things that are missing in the market and create solutions for them. Many of these types of businesses start in Silicon Valley and are technology-focused. They seek rapid expansion and big profit returns. Examples include Facebook, Instagram, and Uber.
4. Social entrepreneurship. People in this category want to solve social problems with their products and services. Their main goal is to make the world a better place and so they are not concerned with making big profits.
5. Innovative entrepreneurship. People in this category aim to change the way people live for the better. Innovators tend to be very motivated and passionate people. They look for ways to make their products and services stand out from other things on the market. People like Steve Jobs and Bill Gates are examples of innovative entrepreneurs.
6. Hustler entrepreneurship. People who are willing to work hard and put in constant effort are considered hustler entrepreneurs.  Their aspirations are what motivates them and they are willing to do what it takes to achieve their goals. They have drive and determination and do not give up easily.
7. Imitator entrepreneurship. People in this category use other people’s business ideas but work to improve them. They seek to make certain products and services better and more profitable.  They have a lot of self-confidence and determination. They learn from other’s mistakes.
8. Researcher entrepreneurship. People in this category like to do as much research as possible before starting a business. They believe that with the right preparation and information, they have a higher chance of being successful. They tend to rely on facts, data, and logic rather than their intuition.
9. Buyer entrepreneurship. People in this category use their wealth to fuel their business ventures usually through purchasing well-established businesses that they think will be successful. Their goal is to grow the business they acquire and expand their profits.

Social Entrepreneur

Some people start businesses in order to help society, people, and communities. A social entrepreneur does not start a company with their main goal being to make a profit, instead, their goal is to make positive change in the world. Their goals often align with the United Nations Sustainable Development Goals (as shown in Figure 9.2 below) and their efforts may have a local, national, or global impact. “Whether it’s reducing poverty, ending homelessness, or fighting climate change—social entrepreneurs are, first and foremost, committed to a cause. While starting a business to support a worthy cause is admirable, the venture still requires focus and serious processes to be sustainable and reach the desired social or environmental impact.”^[16]

“These entrepreneurs might be for-profit or non-profit, and they operate under the umbrella of social enterprise or entrepreneurship. It recognizes societal issues, donates profits or uses grants or raises, and mobilizes resources for the greater good. Poverty reduction, child rights restoration, access to health care and financial services, women empowerment, and community development are the most common issues these entrepreneurs address. They often persuade societies, large organizations, and governments to encourage social transformation by addressing unmet needs and social issues.”^[17]

Play the YouTube video below, “What is Social Innovation?  How do you actually DO it (and change the world)?”, to learn more about the steps involved in creating a social innovation. Amber Melanie Smith provides a specific example of a social innovation related to food insecurity and applies the design thinking methodology to step through the stages of identifying the problem, empathizing, defining the problem, ideating, prototyping, and testing the solution.^[19] Transcript for “What is Social Innovation? How do you actually DO it (and change the world)?” Video [PDF–New Tab]. Closed captioning is available on YouTube.

Necessity Entrepreneur

A necessity entrepreneur is someone who starts a business based on a need for income, out of necessity, because they cannot find employment, have lost their job, need to supplement their income, or require flexibility to attend to other demands in their lives. Some necessity entrepreneurs find business ideas to pursue after retirement or after being downsized. “A typical necessity entrepreneur is over 50 years of age, has been unemployed for over a year, and sees the possibility of finding full-time employment dwindling.”^[20]

“A business started out of necessity is usually initiated through some sort of bad luck, i.e. a job loss, redundancy, or even ill health. These entrepreneurs are hesitant because, in all honesty, they would rather be working for a large corporation with the guarantee of a monthly income, however for whatever reason, that is not an option. As with all entrepreneurs, be they averse to starting a business or not, they have a particular knowledge or know a specific product that they think is of value to others. To be able to share this knowledge/product with the world is all they know so, if the only way to be able to use these specialities is to create their own business that’s what they do.”^[21] An example of this might include a parent with an autistic child who finds it difficult to work a full-time job and still provide the care and attention required to support their child.  This parent decides to stay home to take care of their child because they feel they are the best person to do so. The parent then starts to receive many questions from friends and family about autism, and they realize that there may be a need for this type of service. They decide to obtain formal credentials and they complete an online program in the field of autism and behavioural science. Once formally qualified, they start a business providing advice to families about autism as a fee-based service. This works well for the necessity entrepreneur because they can now earn an income by providing a needed service and still take care of their child.

Opportunity Entrepreneur

An opportunity entrepreneur is someone who sees an opportunity to make money, gets involved at the right time, and aims for business growth and economic development. For example, “Matt Horan started Rollasole after his girlfriend always complained of walking home in High Heels. With his first entrepreneurial venture he created the first vended shoe, launching Rollasole in his local nightclub. From his hometown, word spread and he built up his business selling his shoes online, in stores and in vending machines. Soon the bright lights of Vegas came calling and after a chance meeting with Ashley Ross an unlikely partnership was formed to bring Rollasole into the States.”^[22] Sometimes one great idea acts as a catalyst for other great ideas and today we can find vending machines dispensing sneakers, dress shoes, “emergency” shoes, and “flip flops” for beach wear or when you need a pair of shoes to enter a restaurant.  So many great ideas!

Another example of an opportunity entrepreneur is Tim Horton, who was a Canadian hockey player, and In 1964 he founded the first Tim Horton doughnut shop in Hamilton, Ontario, which later grew into a chain of franchises across Canada and eventually the United States. Burger King purchased Tim Hortons in 2014 and the two brands became subsidiaries of Restaurant Brands International Inc. (RBI).  As of August 2022, RBI is one of the world’s largest quick-service restaurant companies with over $35 billion in annual system-wide sales and over 29,000 restaurants in more than 100 countries.^[23]

Sometimes a potential entrepreneur identifies an opportunity to make a new product or start a new business which may be a combination of a profit-making business idea that also supports a socially sustainable goal or a business created out of necessity that not only makes a profit but also supports a socially sustainable goal.

A good example of a social and profit-making business is 31 Bits.  During a trip to Uganda, marketing and international development college student, Kallie Dovel, realized that many of the uneducated single mothers she had met during her trip had exceptional skills and resourcefulness in making jewelry out of old posters. Kallie identified an opportunity to sell this jewelry so she partnered with a few of her college peers and formed the company 31 Bits. The company employs artisans, women from Uganda, with these exceptional skills and ensures they are paid a fair wage.  The company also promotes ethical sourcing by allowing for family time, providing dignified careers, and preserving culture. The mission statement for the company is “We use fashion and design to drive positive change in the world by providing artisans with dignified opportunities and inspiring customers to live meaningful lives.”^[24] Nearly a decade later, 31 Bits can be found in hundreds of stores and has been endorsed by celebrities like Sophia Bush, Candace Cameron Bure, and Jessica Alba, and has been written about by Forbes, Harper’s Bazaar, and Elle. Most importantly, hundreds of artisans’ lives have been changed forever.^[25]

Steps to Creating a New Business

The Business Development Bank of Canada (BDC) provides an ultimate guide to starting a business in Canada.  This step-by-step guide provides resources and answers to many questions an entrepreneur may need when considering starting a new business.

1. Identify a Business Opportunity. You may find an opportunity for a new product or business by identifying a need for something that is currently missing or identifying a problem that is occurring and contemplating a way to fix it. Before you start spending money on an idea, it’s essential to ensure your business idea has the potential to be successful. Conduct research into what other companies are doing that may be similar to your business concept. Ask yourself these questions. How will your company stand out from the crowd? Who are your target customers? Will they want your service or product? How much money will you need and where will you get it?
2. Choose a Business Structure. In Canada, there are three common types of business structures, sole proprietorship, partnership, or corporation. Be sure to review the pros and cons and specifics of each structure at the BDC, “How to Start a Business in Canada” Ultimate Guide. Sole proprietorship—A sole proprietorship is quite informal and easily created, which is why it’s the most common structure chosen by new entrepreneurs. In this structure, the business and the operator are the same in the eyes of law and tax authorities. The downside is that the owner is personally liable for all functions and debts of the business. Partnership— A partnership is similar to a sole proprietorship, but instead of one proprietor there are two or more. As with a sole proprietorship, there is no legal structure, as such, for a partnership. However, partners usually have some type of contractual agreement among themselves that governs the sharing of revenues, expenses and tasks. Corporation—When a business is incorporated ownership shares are created, which produce a taxation and legal distance between the company and its shareholders. This has tax advantages for the owners; provides some liability protection from the corporation’s debts; and offers some measure of protection for a company’s name. The downside is that setting up a corporation involves initial and ongoing costs for legal and accounting fees.^[26]
3. Choose a Business Name. “Selecting a name for your business is not a task to be taken lightly. In fact, it may prove more difficult than you expect. Your name must be accurate, catchy and, most importantly, available. Your name will often create your company’s first impression on customers, so choose it with care. Ask yourself the following questions. Does the name reflect my business and what I sell? Can it be easily remembered? Is it unique and distinctive?”^[27]
4. Create a Business Plan.  Often a business plan is used to help secure funding, validate a business idea, grow an existing business, buy a business, sell a business, or advise clients. It legitimizes a business idea, shows the results of research, provides product and customer information, and includes operational and strategic goals. “A business plan is a document that explains how your business operates. It summarizes your business structure, objectives, milestones, and financial performance. It’s a guide that helps you, and anyone else, better understand how your business will succeed.”^[28] Additional information on business plans is below.
5. Obtain Business Financing.  There are many ways to finance a new venture, and depending on the size of your startup you might use personal funds or apply for a bank loan (debt financing). Other options include government grants and subsidies, asking family and friends, crowdfunding, developing partnerships, business incubators or accelerators, and inviting venture capitalists or angel investors who may be willing to invest in your business for partial ownership or participation in business decision-making (equity financing).
6. Choose a Commercial Space. Your choices here will vary. You may not need a physical location if you are selling online and working from your home, although if selling products, you will need to consider suppliers and shipping.  If you operate a mobile hotdog cart you will want to set up in locations where your customers are. Some mobile food trucks/carts/stands obtain permission to set up outside specific retail stores.  Some food truck owners obtain contracts with various organizations, and they move from company to company during lunch hours selling lunch products to employees. If you are going to sell products or services in a brick-and-mortar store, then you want to consider buying or leasing a space, the costs of each, and finding a location either near your target market (make more sales near potential customers) or near your supplier (reduce costs).  There may also be licenses required, for example, if you sell liquor or food products. You may also require insurance.
7. Hire Employees.  Whether or not you hire employees will depend on the size of your business.  For example, if you are opening a hot dog stand, then you may be the only employee you have.  If you are opening a small bakery you might start out hiring friends and family, although that can be a sticky situation if you have disagreements. Although, some entrepreneurs open restaurants or retail businesses specifically to start a family-owned business and create jobs and income for their family members. As your business grows you may need to hire employees. Take time to do a thorough job search so you can find the right-fit employees; otherwise, you may end up with a lot of headaches and wasted time by hiring the wrong people. To save time, and depending on the number and type of employees you need, you might use a recruiting firm to vet potential candidates for you. While there is usually a cost for this service, it saves you time (and money) in not having to recruit and select employees yourself.
8. Grow Your Business. “Getting your business up and running is only the start of your business journey. Your first year will be one of your most challenging. It’s when many businesses fail. You will have to keep your eye not only on your day-to-day operations but also planning for your company’s future growth. The difference between the two is often described as working in the business versus working on the business. Visit the Business Development Canada (BDC) manage your growth hub for more tips on how best to move your business forward in the early months.”^[29]

Choosing a Business Structure

The legal framework of a business, business structure or form of business ownership, determines how the business is organized, who owns it, and how it is taxed. When starting your business, choose the business structure that best suits your needs. There are four types of business structures in Canada: sole-proprietorship, partnerships, corporations and cooperatives.

Sole-proprietorship

A sole-proprietorship is a simple, unincorporated business owned and operated by one person. The owner has complete control, receives all profits, and is fully liable for the business’s financial and legal situation. A sole-proprietorship is the easiest and most common way to start a business, but it does come with drawbacks, and all of the responsibility for the business’s success rests with you as the owner. Examples of sole proprietorship businesses include independent photographers, small landscaping companies, freelance writers, and personal trainers.

Partnership

A partnership is a non-incorporated business owned by two or more people who share profits and responsibilities and risks.

A major problem with partnerships, as with sole proprietorships, is unlimited liability: in this case, each partner is personally liable not only for his or her own actions but also for the actions of all the partners. If your partner in an architectural firm makes a mistake that causes a structure to collapse, the loss your business incurs impacts you just as much as it would your partner. And here is the really bad news: if the business does not have the cash or other assets to cover losses, you can be personally sued for the amount owed. In other words, the party who suffered a loss because of the error can sue you and/or your partner for your personal assets. Many people are understandably reluctant to enter into partnerships because of unlimited liability. Certain forms of businesses allow owners to limit their liability. These include limited partnerships and corporations.

Partners are considered self-employed for tax purposes and have unlimited liability unless an LLP (limited liability partnership) is created. LLP allows partners to pool resources while limiting their liability for other partners’ professional negligence. Limited partnerships have at least one general partner show assumes unlimited liability, and at least one limited partner whose liability is limited to their investment in the business. Each Canadian province has its own partnership legislation, but all provinces recognize general partnerships and limited partnerships. Partners may have disagreements; therefore, a partnership agreement usually stipulates how decisions will be made, how responsibilities will be divided, and how profits will be split.

Partnership Agreement

The impact of disputes can be lessened if the partners have executed a well-planned partnership agreement that specifies everyone’s rights and responsibilities. The agreement might provide such details as the following:

• amount of cash and other contributions to be made by each partner
• division of partnership income (or loss)
• partner responsibilities — who does what
• conditions under which a partner can sell an interest in the company
• conditions for dissolving the partnership
• conditions for settling disputes

Corporation

A corporation is a separate legal entity from its shareholders and can be incorporated at the federal or provincial level. Corporations offer flexible structure and the ability to divide ownership with shares. A corporation is a legal entity that separates the business from its owner/operator. Therefore, its shareholders have limited liability. Corporations can choose to incorporate federally or provincially.

Incorporation makes it possible for businesses to raise funds by selling stock. This is a big advantage as a company grows and needs more funds to operate and compete. Depending on its size and financial strength, the corporation also has an advantage over other forms of business in getting bank loans. An established corporation can borrow its own funds, but when a small business needs a loan, the bank usually requires that it be guaranteed by its owners.

Corporations are owned by shareholders who invest money in the business by buying shares of stock. Therefore, there is no ownership control by one person as in a proprietorship. The portion of the corporation the shareholders own depends on the percentage of stock they hold. For example, if a corporation has issued 100 shares of stock, and you own 30 shares, you own 30 percent of the company. The shareholders elect a board of directors, a group of people (primarily from outside the corporation) who are legally responsible for governing the corporation. The board oversees the major policies and decisions made by the corporation, sets goals and holds management accountable for achieving them, and hires and evaluates the top executive, generally called the CEO (chief executive officer). The board also approves the distribution of income to shareholders in the form of cash payments called dividends. Ownership can be transferred by selling shares and therefore is not dependent upon the life of the owner, board of directors or a specific shareholder.

Like sole proprietorships and partnerships, corporations have both positive and negative aspects. In sole proprietorships and partnerships, for instance, the individuals who own and manage a business are the same people. Corporate managers, however, don’t necessarily own stock, and shareholders don’t necessarily work for the company. This situation can be troublesome if the goals of the two groups differ significantly.

Managers, for example, are often more interested in career advancement than the overall profitability of the company. Stockholders might care more about profits without regard for the well-being of employees. This situation is known as the agency problem, a conflict of interest inherent in a relationship in which one party is supposed to act in the best interest of the other. It is often quite difficult to prevent self-interest from entering into these situations.

Another drawback to incorporation — one that often discourages small businesses from incorporating — is the fact that corporations are more costly to set up. When you combine filing and licensing fees with accounting and attorney fees, incorporating a business could set you back by $1,000 to $6,000 or more depending on the size and scope of your business.^[30] Additionally, corporations are subject to levels of regulation and governmental oversight that can place a burden on small businesses. Finally, corporations are subject to what’s generally called “double taxation.” Corporations are taxed by the federal and provincial governments on their earnings. When these earnings are distributed as dividends, the shareholders pay taxes on these dividends. Corporate profits are thus taxed twice—the corporation pays the taxes the first time and the shareholders pay the taxes the second time.

Co-operative (for profit and not-for-profit)

A co-operative is controlled by its members and can operate for profit or as a not-for-profit. Co-ops are structured to meet the common needs of their members rather than maximize profits for shareholders. Just like a corporation, it can be registered provincially or federally, and each option comes with its own advantages and disadvantages. Some of the largest co-operatives in Canada include:^[31]

• Desjardins. The largest co-operative financial group in Canada.
• Sollio Co-operative Group. The largest agri-food co-operative in Canada.
• Federated Co-operatives. One of the largest companies in Canada.
• South Country Co-op. One of Canada’s largest co-ops.
• Vancity Co-op. Canada’s largest community credit-union.

The co-operative is democratically controlled (one member, one vote). Ensures all members have input but may result in slower decision-making.  All members need to participate for a co-op to be successful. Member benefits in receiving special discounts, deals, education, training, services, and sometimes dividends. Surplus revenue is distributed back to the members, proportional to their use of the cooperative’s services. Members share in profits and losses so they may be less willing to take risks or to invest in long-term projects.

Members contribute financially to the co-op by purchasing membership shares and using the co-op’s services. Members participate in the co-op’s governance by attending meetings, voting on major decisions, and electing the board of directors. Members follow the co-op’s bylaws and policies. Members offer suggestions on how to improve the co-op. Members volunteer some of their time and often serve on a committee. Therefore, all members need to participate for a co-op to be successful.

Business Structure Comparison

Refer to Table 4.1 for a comparison of the forms of business ownership.

Other Types of Business Ownership

When starting a new business an entrepreneur must decide which choice is best for them when it comes to starting a business from scratch, buying a used business from another owner, or buying a franchise business. Each has its own benefits and drawbacks. Starting a business from scratch is ideal for innovators with a strong vision, risk tolerance, and creativity. Buying an existing business is best for those who want immediate operations and are comfortable managing an established system. Franchising is great for individuals seeking lower risk and structured support while operating under a recognized brand.

Franchising

A franchise business is a business where the owner grants licenses to licensees to operate the business (sell its products, provide services, and more) at a business location. Think of Baskin-Robbins, CrossFit or another business that you’ve seen in multiple cities. Each location is a franchisee with its own management that pays a fee to the franchisor (the owner) to “rent” the brand name.

Below are the main financial elements of starting a franchise.^[32]

• Franchise purchase fee: This can cost anywhere from $20,000 to $50,000, depending on the license.
• Minimum liquid capital: A generally good idea is to have $50,000 to $60,000 for a service-based business, and $75,000 to $100,000 of liquid capital for a facilities-based business.
• Franchise royalties: This is a fee you’ll have to continue to pay to operate your business–the royalty fee can be 4% to 12% of your franchise location’s profits.
• Additional expenses: Franchise businesses also have expenses such as sourcing a commercial space (if applicable), staffing, and more.

Buying or Merging with an Existing Business

Given the stakes, it’s important to thoroughly weigh your business goals, risk tolerance and market opportunities before making an acquisition. To learn more about the pros and cons of buying an existing business review this BDC article.

Acquisitions

A business acquisition is a financial transaction where one company buys the majority or all of another company’s shares or assets, giving the acquiring company control over the target company. Acquisitions are often amicable, with both companies agreeing to the terms of the deal. However, the term “acquisition” can also be used to describe a hostile takeover, where one company buys a majority stake against the wishes of the target company’s management or board of directors. A firm effectively gains control of that company if it buys more than 50% of a target company’s shares. Acquisitions are often carried out with the help of an investment bank because they’re complex arrangements with legal and tax ramifications.^[33]

An example of a business acquisition is Microsoft’s acquisition of Activision Blizzard for $68.7 billion in 2023. This deal brought popular gaming franchises like Call of Duty, World of Warcraft, and Candy Crush under Microsoft’s umbrella, significantly boosting its presence in the gaming industry. It also positioned Microsoft to compete more aggressively in the gaming market against rivals like Sony and expanded its potential in the growing metaverse and cloud gaming sectors.

Below are a few reasons for a company to acquire another company:^[34]

1. Gain vertical integration. A business may want to buy its supplier or other business that is part of its supply chain to reduce costs and expand capabilities. Helps boost profits and make companies less dependent on their suppliers or distributors.
2. Gain horizontal integration. A business strategy where one company takes over another that operates at the same level in an industry. Helps companies expand in size, diversify their product offerings, reduce competition, and expand into new markets.
3. Enter a foreign market. Buying an existing company in another country could be the easiest way to enter a foreign market. The purchased business will already have its own personnel, a brand name, and other intangible assets. This could help to ensure that the acquiring company will start off in a new market with a solid base.
4. Cost of expansion. Perhaps a company met with physical or logistical constraints or depleted its resources. It may be more cost-effective to acquire another firm rather than to expand its own operations. Such a company might look for promising young companies to acquire and incorporate into its revenue stream as a new way to profit.
5. Eliminate competition. Companies may start making acquisitions to reduce excess capacity, eliminate the competition, and focus on the most productive providers when there’s too much competition or supply. Federal watchdogs often keep an eye on deals that may affect the market. Acquisitions between two similar companies may harm consumers, including higher prices and lower-quality goods and services.
6. Gain new technology. Sometimes it can be more cost-efficient for a company to purchase another company that has already implemented a new technology successfully than to spend the time and money to develop the new technology itself.
7. Gain intellectual property. A company sometimes purchases another company to gain the other company’s intellectual property (i.e., trademarks, patents, copyrights, trade secrets).

Mergers

A company merger is when two or more companies join together to form a new company with a single stock. During a merger, the two companies negotiate terms such as the valuation of assets and the exchange ratio. While mergers are often thought of as an equal split, one company may end up with a larger percentage of ownership in the new company. Mergers are similar to acquisitions or takeovers, and the two actions are often grouped together as mergers and acquisitions (M&A).^[35]

Companies may merge for a number of reasons, including:^[36]

1. Increase market share. Merging with another company may allow a company to gain a larger market share.
2. Access new technologies. A company may seek a merger to gain access to new technologies, expertise, patents, or intellectual property.
3. Gain economies of scale. By consolidating operations, a company can reduce redundancies and streamline processes, which can lead to improved profit margins.
4. Diversify. A company can enter new markets or offer new products or services.
5. Blend cultural values. A successful merger can lead to a more diverse and inclusive workforce.
6. Enhance competitive position. A merger can strengthen a company’s portfolio or services and better equip it to meet the needs of consumers.

Strategic Alliances and Joint Ventures

Strategic Alliance

A strategic alliance and a joint venture are both collaborative business arrangements between companies, but they differ in structure, commitment, and goals.

A strategic alliance is a partnership between two or more businesses to work together on a common goal, while each company remains independent. The goal is to share resources and capabilities to create mutual value, such as by entering new markets, developing new products, or increasing innovation.

The other types of strategic alliances are equity strategic alliances and non-equity strategic alliances:

• Equity strategic alliance: One company buys equity in another company. This is also known as a partial acquisition.
• Non-equity strategic alliance: Two companies come together without exchanging equity. Each company brings its resources to the alliance. An example of a non-equity strategic alliance is the partnership between Starbucks and Barnes & Noble.

Joint Venture

A joint venture (JV) is a business collaboration in which two or more companies create a new, independent legal entity to achieve a specific business objective or undertake a particular project. In this arrangement, the companies share ownership, profits, risks, and governance of the newly formed entity. JVs often require substantial capital investment and a long-term commitment, typically concluding once the objective is met unless the parties agree to extend the venture.

Alternatively, a JV can also refer to a business agreement where two or more parties combine resources to pursue a common goal. These ventures leverage the strengths of each participant, often yielding mutual benefits. For example, a hairstylist and a nail salon might collaborate in a JV to attract more customers and increase profits. While JVs can adopt various legal structures, they are generally characterized by shared ownership, financial returns, risks, and decision-making authority. The terms of the JV are usually outlined in a private and confidential contract. A prevalent form of JV is the project-based joint venture, which dissolves upon the completion of the specified project.^[37]

There are two main ways of setting up a joint venture in Canada. The first is for the partners to agree on a contract that will set out the terms of the venture; the second is to form a separate corporate entity.^[38]

Below are a few advantages and disadvantages of joint ventures:^[39]

Advantages of a joint venture:

• Increased growth, productivity and profits
• Reduced costs and risks
• Growth opportunity that does not require having to borrow funds or look for outside investors
• Quick access to expertise

Disadvantages of a joint venture:

• Higher likelihood of conflicts arising
• Decreased control and flexibility through joint decision-making
• More widely shared knowledge, which can lead to sensitive information being communicated to other parties

Generally, the main difference between a joint venture and other types of strategic alliances is that a joint venture creates a separate legal entity, while a strategic alliance does not. For example, in 2022, these companies announced a joint venture to build a battery plant in Columbus, Ohio to produce lithium-ion EV batteries for Honda’s electric vehicles.^[40]

An example of a joint venture is the one between Sony and Honda to create an electric vehicle. The joint venture, called “Afeela”, is a collaboration between the electronics company Sony and the automobile company Honda. The goal is to combine Sony’s expertise in imaging, networks, and entertainment with Honda’s skills in mobility development, technology, and sales. The company plans to take pre-orders in 2025 and deliver the vehicle in the U.S. in 2026.^[41]

Refer to Table 4.2 for key differences between strategic alliances and joint ventures.

Business Plan

A business plan may change as your business grows or pivots in a new direction, so you will find the business plan is not fixed but flexible and needs to be revised from time to time. Any new or existing business can and should make use of a business plan. “In its simplest form, a business plan is a guide that outlines goals for your business and how you plan to reach them. It contains an overview of your business strategy, milestones to track tasks and responsibilities, and the basic financial projections you need to forecast your sales, expenses, and cash flow.”^[42] “The primary purpose of a business plan is to help you understand the direction of your business and the steps it will take to get there. Having a solid business plan can help you grow up to 30% faster and according to our own 2021 Small Business research working on a business plan increases confidence regarding business health—even in the midst of a crisis.”^[43] There is no one right way to write a business plan, your approach depends on your industry, and who is reading your plan. Ensure you include all the important information any lender or investor will want to see before they go into business with you.

Below is a brief description of the sections of a traditional business plan.

1. Executive Summary. “This is an essential part of a successful business plan that often takes the most time to complete. It’s also one that you may consider completing last, even though it’s usually the first thing that the reader sees. An executive summary is the definitive recap of all of the information that you include in the business plan. Most commonly, this section doesn’t exceed two full pages. This is because the executive summary aims to present the essence of the business and its goals. It serves as an elevator pitch that may help you convince someone to invest in the business.”^[44]
2. Company Description. “A List of the goods and services the company will provide, the market it will serve, short- and long-term goals for growth and a brief history of the company’s formation and past performance.”^[45]
3. Market Analysis. “The market analysis section details the target market for the company’s product offerings. This section confirms that the company understands the market and that it has already analyzed the existing market to determine that there is adequate demand to support its proposed business model. Market analysis includes information about the target market’s demographics, geographical location, consumer behavior, and market needs. The company can present numbers and sources to give an overview of the target market size.”
4. Competitive Analysis. “A competitive analysis is a strategy that involves researching major competitors to gain insight into their products, sales, and marketing tactics. Implementing stronger business strategies, warding off competitors, and capturing market share are just a few benefits of conducting a competitive market analysis.^[46]
5. Management Plan. “The management plan provides an outline of the company’s legal structure, its management team, and internal and external human resource requirements. It should list the number of employees that will be needed and the remuneration to be paid to each of the employees. Any external professionals, such as lawyers, valuers, architects, and consultants, that the company will need should also be included. If the company intends to use the business plan to source funding from investors, it should list the members of the executive team, as well as the members of the advisory board.”^[47]
6. Operating Plan. “The operating plan provides an overview of the company’s physical requirements, such as office space, machinery, labor, supplies, and inventory. For a business that requires custom warehouses and specialized equipment, the operating plan will be more detailed, as compared to, say, a home-based consulting business. If the business plan is for a manufacturing company, it will include information on raw material requirements and the supply chain.”^[48]
7. Sales and Marketing Plan. “This section of the plan defines what you plan to do to promote and sell the company’s products or services. Consider including your pricing plans here and mention the organization’s unique selling proposal. You may also list important communication channels for the business. For example, if you’re about to launch a retail company, you may explain which social media channels you’d use to promote the products through paid and organic advertisements. Other elements to include here are your email, influencer and content marketing strategies.”^[49]
8. Financial Plan and Projections. “This section should include a company’s financial planning and projections. Every company needs to have a budget in place. This section should include costs related to staffing, development, manufacturing, marketing, and any other expenses related to the business. Financial statements, balance sheets, and other financial information may be included for established businesses. New businesses will include targets and estimates for the first few years plus a description of potential investors.”^[50]
9. Appendix. “The final section of a business plan usually includes any additional information or appendices that support the claims and ideas you present in previous sections. You may consider adding attachments that exhibit the viability of your business plan, for example, financial statements or external market reports that you used to analyze competition or target audience.”^[51]

Play the YouTube video below, “What is a Business Plan? – BPlans Explains Everything”, to learn about what a business plan is and why and how you should use one.^[52] Transcript for “What is a Business Plan?” Video [PDF–New Tab]. Closed captioning is available on YouTube.

Business Model Canvas

The business model canvas is a strategic planning tool used by managers to illustrate and develop their business model. The business model canvas template clearly identifies the key elements that make up a business. Additionally, it simplifies a business plan into a condensed form. In this way, the business model canvas template acts as an executive summary for the business plan.^[53]

The business model canvas is a great tool to help you understand a business model in a straightforward, structured way. Using this canvas will lead to insights about the customers you serve, what value propositions are offered through what channels, and how your company makes money. You can also use the business model canvas to understand your own business model or that of a competitor! The Business Model Canvas was created by Alexander Osterwalder, of Strategyzer.^[54]

The typical use for this tool is to outline the fundamental building blocks of a business, but it can be used effectively for individual products as well. It can be used to identify potential opportunities for growth and expansion, or areas that need improvement. The components may vary but typically the business model canvas includes the following nine building blocks and each is represented by a rectangle in the model diagram.

1. Customer segments
2. Value proposition
3. Channels
4. Customer relationships
5. Key activities
6. Revenue streams
7. Key resources
8. Key partnerships
9. Cost structure

Play the YouTube video below, “Introduction to the Business Model Canvas”, to learn about what a business model canvas is and why and how you should use one.  ^[55] Transcript for “Introduction to the Business Model Canvas” Video [PDF–New Tab]. Closed captioning is available on YouTube.

Support and Education for Entrepreneurs

The University of Toronto Open Learning Series

The University of Toronto, The Bridge, Scarborough Campus, offers a free entrepreneurship course within its open learning series. “We welcome students, staff, faculty, alumni, and local and international community of emerging entrepreneurs to enhance your learning of entrepreneurship through the award-winning Entrepreneurship Open Learning Series. Start your entrepreneurship journey by completing training modules that teach you core management principles to help perfect your business plans and pitches.”^[56]

After you complete the entrepreneurship course within the open learning series you will be able to do the following:^[57]

• Explain value proposition and utility to help focus on specific motivations for a specific product.
• Define the target market and describe value specific for a target market to help demonstrate the value built into a product.
• Evaluate the utility and value of a product within an industry using market research.
• Design a usage scenario for a product.
• Discuss software design principles to help the development of a product.

Other Open Courses

There are many free online courses in entrepreneurship and many other subjects.  These courses are offered by various education providers, often in addition to their fee-based courses, and include Massachusetts Institute of Technology (MIT), INSEAD, University of Toronto, McMaster University, University of Michigan, Stanford Online, Open Yale Courses, Harvard University, LinkedIn Learning, FutureLearn, Coursera, Edx, Udacity, edX, Khan Academy, YouTube, and more. Some courses are referred to as MOOCs, Open Courses, and Free Trials or Demos.

OER (Free) Books, Video Tutorials, Case Studies, and More

“The Recommendation on Open Educational Resources (OER), adopted by UNESCO’s General Conference at its 40th session on 25 November 2019, is the first international normative instrument to embrace the field of openly licensed educational materials and technologies in education. OER are defined in this Recommendation as learning, teaching and research materials in any format and medium that reside in the public domain or are under copyright that have been released under an open license, which permit no-cost access, re-use, re-purpose, adaptation and redistribution by others.”^[59]

There are many free ebooks, case studies, video tutorials, and lessons on many subjects, including entrepreneurship, available from eCampus Ontario, BCCampus, OpenStax, OER Commons, Saylor Academy, Khan Academy, MERLOT, Directory of Open Access Journals (DOAJ), Open Textbook Library, OASIS, and more.

Government Support

The Government of Canada provides support for entrepreneurs and provides specific initiatives to aid entrepreneurs from various demographic and geographical groups. For example, the Strategic Partnerships Initiative (SPI) helps Indigenous communities participate in complex economic opportunities. An additional $300 million is available until 2027 for clean energy projects in Indigenous, rural and remote communities across Canada.^[60] The Aboriginal entrepreneurship program (AEP) provides access to capital and access to business opportunities to Indigenous entrepreneurs and business owners in Canada.^[61]

The Government website provides a search tool for entrepreneurs seeking financial or other types of support to start or expand their businesses. An entrepreneur can use the business benefits finder to search for support in several categories including Canadians, Indigenous Peoples, Black Canadians, Other Racialized Persons, Women, Language Minorities, 2SLGBTQI+, Newcomers to Canada, Persons with Disabilities, Youth (<40), and Rural or Northern Residents. Give it a try by visiting the Business Benefits Finder and answering a few short questions about a business you might like to start and discover if there are any Government supports for you, as an entrepreneur.

The Government of Canada and many chambers of commerce have mentoring programs designed to facilitate contact between business leaders and budding entrepreneurs. Local economic development centers and some business leaders’ associations offer similar programs. The Government of Canada, Starting a Business website, also provides information for registering a business, getting business support and financing, choosing a business name,  applying for business permits and licenses, and tax help. The Canadian Government’s Business Grants and Financing website provides information on Government financing programs, loans and capital investments, wage subsidies, grants, tax credits, and managing your business finances. Some grant and loan programs in Canada include Business Start Program (BSP) in Manitoba, Youth Entrepreneurship Partnership Program in Ontario,  Jeunes Promoteurs in Quebec, and Canada Small Business Financing Program.

Governments in countries other than Canada may also offer incentives for new business start-ups.  Some government programs specifically offer support to young entrepreneurs, entrepreneurs starting businesses within specific industries in which the government may be trying to grow the economy, and entrepreneurs who are part of specific minority groups. For example, The U.S. Small Business Administration (SBA) is a federal agency that provides assistance to current and prospective small business owners.^[62]. There are also several federal entrepreneur programs for immigrants, such as the Microenterprise Development Program and the Minority Business Development Agency Business Centers^[63].

Business Development Bank of Canada (BDC)

The Business Development Bank of Canada (BDC) offers many tools and resources, as well as advice, to entrepreneurs and business owners. “We support small and medium-sized businesses in all industries and at every stage of growth with money and advice. We are the Business Development Bank of Canada.”^[64]

Crowd Funding

“Crowdfunding is a kind of crowdsourcing and alternative financing by which people, via the Internet, can contribute money to a person, cause, event, or business venture. This method has been used to fund startup businesses, help communities suffering from a natural disaster, and aid families and individuals in financial need due to a medical emergency or a death. Crowdfunding is now a common method for connecting entrepreneurs and investors—offering an alternative to bank loans or venture capitalists—and it is now a popular way of supporting cultural institutions, such as art organizations and charities. Billions of dollars are raised annually via this fundraising method. A high-profile example of crowdfunding is Oculus VR, now part of Meta (the parent company of Facebook). It produces virtual reality headsets and other hardware and software. The firm’s founder, Palmer Luckey, used Kickstarter to raise $2.4 million (U.S.) in 2012, vastly exceeding its crowdfunding goal of $250,000. Facebook purchased the company for $2 billion in cash and stock in 2014.”^[65]

Incubators and Accelerators

“A business incubator is a specialized program designed as a space for new businesses to learn and grow. The programs provide services for entrepreneurs and startups while offering reduced rates for supplies and workspace. Typically, young businesses must apply for a position and commit to a certain amount of time in the program. While in a business incubator, companies can more thoroughly plan their business, learn from other individuals and save money.”^[66]

“A business accelerator is a program designed to help established startups scale quickly, and often provide funding in exchange for equity in the business. Accelerators often require startups to already have a minimum viable product or a fixed team before they can apply. Once admitted, startups go through an intense period of growth and development, often over the course of three to six months.”^[67]

Here are a few examples of business incubators and accelerators. Be sure to check with your college or university to see if there is an incubator or accelerator available on campus.

Seneca College

Seneca College has HELIX. “HELIX’s Innovation and Entrepreneurship Incubator has a process that provides future entrepreneurs with resources and support to help develop their innovation mindset and grow their new ventures from ideation to launch and scaling. The process involves two stages or ‘strands’ – the INNOVATION Strand and the ACCELERATION Strand. Those who want to enter the ACCELERATION Strand of HELIX must complete all six workshops of the INNOVATION Strand and deliver a pitch of their proposed venture idea.”^[68]

MIT

The MIT delta v accelerator is the capstone entrepreneurial experience for students at MIT.^[69] MIT REAP is a dynamic global initiative with two programs – Global and Focus – that engages with communities around the world to strengthen innovation-driven entrepreneurial ecosystems and transform economies.^[70]

MaRS

MaRS Discovery District innovation hub works with business startups to scale-ups. MaRS offers a range of services and a Start-up toolkit that help tech founders grow their companies and create meaningful innovation: solving real problems for real people. MaRS works with hundreds of companies across the country, turning breakthrough ideas into products and services with global impact.^[71]

District 3

“At District 3 we work with founders and their startup teams to help them validate their business and get to scaling it, faster and better. As a founder, you’ll be receiving tons of information and opinions about what you need to do to run your startup successfully and you’ll have to learn to select what to follow. This takes time and experience, and while there is no real way to teach it, there are tools and organizations out there that can make it easier for you—like this library!

Futurepreneur

“Futurpreneur has been fueling the entrepreneurial passions of Canada’s young enterprise for over two decades. We are the only national, non-profit organization that provides financing, mentoring and support tools to aspiring business owners aged 18-39. Our internationally recognized mentoring program hand matches young entrepreneurs with a business expert from a network of more than 2,600 volunteer mentors.”^[72]

 Attributions

The contents of this chapter is a compilation sourced from various OER resources, please refer to the Book Information for details.

References

(Note: This reference list was produced using the auto-footnote and media citation features of Pressbooks)