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Chapter Review

Key Takeaways

  1. 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.
  2. 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.
  3. Some of the key traits or characteristics found in entrepreneurs include passion, risk tolerance, persistence, and an innovative mindset.
  4. Entrepreneurs are motivated by much more than money, and most start their business to become their own boss.
  5. The type of entrepreneur one is depends on their goals and personal characteristics (e.g., skills, knowledge, creativity, interests, preferences, situation in life, drive, determination, etc.).
  6. 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.
  7. 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.
  8. Social entrepreneurs don’t start companies with their main goal being to make a profit; instead, their goal is to make a positive change in the world.
  9. Steps to creating a new business: Identify a business opportunity, choose a business structure, choose a business name, create a business plan, obtain business financing, choose a commercial space, hire employees, and grow your business.
  10. A sole proprietorship is a simple, unincorporated business owned and operated by one person.
  11. A partnership is a non-incorporated business owned by two or more people who share profits, responsibilities, and risks. The impact of disputes can be lessened if the partners have executed a well-planned partnership agreement that specifies everyone’s rights and responsibilities.
  12. A corporation is a separate legal entity from its shareholders and can be incorporated at the federal or provincial level.
  13. A co-operative or co-op 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.
  14. 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.
  15. A company merger is when two or more companies join together to form a new company with a single stock.
  16. 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.
  17. A joint venture (JV) is a business arrangement where two or more parties combine resources to achieve a specific goal.
  18. 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.
  19. 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.
  20. Support and Education for Entrepreneurs: The University of Toronto’s Entrepreneurship Open Learning Series, Incubators and Accelerators, Government support, and Crowdfunding.

Download the “Chapter in Review” for
Chapter 6: Entrepreneurship and Business Structure [PDF].

End-of-Chapter Exercises

  1. Entrepreneurial Potential. Take this Self-Assessment or this Entrepreneurial Quiz to help you identify your entrepreneurial potential.
  2. Entrepreneurial Characteristics. Search the Internet to find entrepreneurial traits or characteristics that most entrepreneurs need to be successful. (Look for traits that are not already listed in this chapter.) Support each trait with a specific example that demonstrates how you have applied it in a real-life situation. Share your three traits using examples with your class or professor.
  3. Incubator. Search the Internet to find one business incubator (not already listed in this chapter) that supports entrepreneurs in developing new business ventures.  What does this incubator do?  What services are offered? Do you think these services would be helpful to an entrepreneur?  Share your findings with your partner, class, or professor.
  4. Expand Your Network. Visit the Business Development Bank of Canada (BDC) and discover effective strategies for expanding your network. You may use alternate resources that discuss how to expand your professional network (as determined by your professor). Put one of these suggestions into action over the next week. Consider what happened, anything, nothing? Were you surprised at anything you read or tried? What did you find challenging? Share your thoughts with your partner, class, or professor.
  5. Naming a Company. Search the Internet to find some rules for naming a new company.  Consider the rules for naming proprietorships, partnerships, and corporations. For example, an entrepreneur starting a corporation might visit NUANS, which is the Government of Canada’s combined search tool for business names and trademarks. Share your findings with your partner, class, or professor.
  6. Social Entrepreneurship. Consider the United Nations Sustainable Development Goals, and consider the community you live in. Is there a need for improvement in one or more of these 17 goals? Have you observed a need for more efficient use of energy, more responsible consumption and production, or more homes for people living on the streets? Maybe you can identify another area for improvement?  Choose one improvement you assume is needed based on your observations. Then, search the Internet to find facts that support your assumption for this need. Is anyone or any company already trying to address this need?  Discuss your findings with your class or professor.
  7. Standard of Living/Quality of Life. Standard of living and quality of life utilize some of the same data, but “standard of living” represents a more physical aspect of life, while “quality of life” represents the more intangible aspects. Search the Internet to find an example of a specific entrepreneurial endeavour that changed the standard of living or quality of life for a specific group of people. Consider how this type of entrepreneur and the goals they pursued relate to the content in this chapter.  Share your findings with your class or professor.
  8. Great Entrepreneur.  Use the Internet to find a great entrepreneur. Read about their story.  What key characteristics do they have that helped them achieve success?  What major decisions did they have to make along the way to becoming a successful entrepreneur? Write a brief summary of who this entrepreneur is, what business or invention they created and its impact, and the major decisions they had to make along the way to achieving success. Share this story with your class and professor.
  9. Hire an Employee. Review the information on the Business Development Canada (BDC) website about hiring employees.  Assume you just opened a small bakery in your community, and you need an employee to work at the front counter serving customers because you plan to be helping in the kitchen and managing operations.  Write a list of five competencies and/or qualifications you will be looking for in your new hire.  Why did you select each of these? Share this list and your rationale with your class and professor.
  10. Number of Business Startups. Search the Internet to find comparisons between two countries on the number of new business startups. You may choose any two countries, or these may be assigned by your professor. A good place to start is by locating world statistics or national government statistics. Identify the number of new business startups within a specific country over a specific time frame. Then identify the number of not-for-profit social enterprises, for-profit social enterprises, or non-social enterprises at all.  Are you surprised by the number of social enterprise start-ups? Why might one country have more new business start-ups than another? Share your findings with your class and professor.
  11. New Startup Research. Assume you are planning to open a coffee shop in your community. Use the Internet to conduct a competitive analysis.  Determine who your competitors are. Visit a coffee shop for an hour, order something, and observe the types of customers that visit and what they purchase.  Take note of the menu items and services the location offers.  List three things the company does well that bring value to customers.  List three things you will do in your coffee shop that differ from your competitors in order to be unique and bring value to customers.  Share your lists with your class and professor.

 

Self-Check Exercise: Type of Business Structure Flash Cards

Self-Check Exercise: Business Plan Drag-the-Words

Additional Resources

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