This chapter surveys the world of entrepreneurship and small business. After reading this chapter, you will be able to: Define and examine the advantages and disadvantages of the sole proprietorship form of organization, identify three types of partnership and evaluate the advantages and disadvantages of the partnership form of organization, describe the corporate form of organization and cite the advantages and disadvantages of corporations,. | Chapter Six Small Business, Entrepreneurship, and Franchising Entrepreneurship and Small Business Entrepreneurship The process of creating and managing a business to achieve a desired objective. Small Business Any independently owned and operated business that is not dominant in its competitive area and employs fewer than 500 people. 6-1 Small Business. 6-2 Source: Small Business Answer Card 1998, Small Business Administration Office of Advocacy, ADVO/stats/, August 23, 1998. Represents of business establishments. Created more than 80% of all new jobs in fiscal 1996-97 Accounted for 50% of GDP in 1999 Provided over half of the employment in Canada in 1999 The Role of Small Business in the Canadian Economy Job creation Innovation 6-3 # of Firms by Employment Size 6-4 Source: Small Business Answer Card 1998, Small Business Administration Office of Advocacy, ADVO/stats/, August 23, 1998. Establishments by Industry . | Chapter Six Small Business, Entrepreneurship, and Franchising Entrepreneurship and Small Business Entrepreneurship The process of creating and managing a business to achieve a desired objective. Small Business Any independently owned and operated business that is not dominant in its competitive area and employs fewer than 500 people. 6-1 Small Business. 6-2 Source: Small Business Answer Card 1998, Small Business Administration Office of Advocacy, ADVO/stats/, August 23, 1998. Represents of business establishments. Created more than 80% of all new jobs in fiscal 1996-97 Accounted for 50% of GDP in 1999 Provided over half of the employment in Canada in 1999 The Role of Small Business in the Canadian Economy Job creation Innovation 6-3 # of Firms by Employment Size 6-4 Source: Small Business Answer Card 1998, Small Business Administration Office of Advocacy, ADVO/stats/, August 23, 1998. Establishments by Industry GOODS PRODUCING SECTOR a ALL INDUSTRIES SERVICE PRODUCING SECTOR PRIMARY INDUSTRIES CONSTRUCTION MANUFACTURING WHOLESALE TRADE RETAIL TRADE FINANCE, INS. & RE BUS & PERSONAL SERVICES 20 % 40 % 60 % 80 % 100 % 0 – 4 5 - 49 50 - 99 100 + No. of employees Top Five Small Business Industries 6-6 Source: 1997 Small Business Profile, Small Business Administration Office of Advocacy, “Small Business: Backbone of the United States Economy,” , September 30, 1998. Advantages of Small Business Ownership Personal independence Business startup costs flexibility focus reputation 6-7 Disadvantages of Small Business Ownership High stress level High failure rate Undercapitalization Managerial inexperience or incompetence Inability to cope with growth 6-8 Roads to Success or Paths to Failure 6-9 Flexibility Focus Reputation Undercapitalization Managerial inexperience or incompetence Inability to cope with growth Success Failure Small Business Life Expectancy .
