Entrepreneurship

Entrepreneurship is the process of identifying an opportunity in the marketplace and accessing the resources needed to capitalize on it. The single most-tested idea in this chapter is the distinction between entrepreneurship, new venture, and small business — three terms that describe the process, result, and scale of starting a business.

The Three Interrelated Concepts

Term	What It Is	The Analogy
Entrepreneurship	The process of spotting an opportunity and pursuing it	Following the recipe; baking the bread
New Venture	The result — a recently formed commercial organization providing goods/services for sale	The bakery opens its doors
Small Business	The scale — independently owned and managed; does not dominate its market	The bakery stays local and independent

Exam trap — process vs. result: Entrepreneurship is not the business. It is the act of creating it. Once the business exists, it becomes a new venture. If it stays independently owned and non-dominant, it is also a small business.

graph LR
    A[Entrepreneur\nspots an opportunity] -->|"Entrepreneurship\n= the process"| B[New Venture\n= the result]
    B -->|"if independently owned\n+ non-dominant market"| C[Small Business\n= the scale]
    A -->|"profit motive +\nfreedom of choice"| A

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Entrepreneurial Personality Traits

Research identifies four traits consistently found in successful entrepreneurs:

1. Drive and ambition — strong desire to achieve; willingness to work long and hard
2. High tolerance for uncertainty/risk — can act decisively when outcomes aren’t guaranteed
3. Creativity and innovation — spots opportunities others miss; finds new approaches
4. Internal locus of control — believes personal actions, not luck or fate, determine outcomes

Internal locus of control is the most exam-relevant trait because it captures the entrepreneurial mindset. Entrepreneurs don’t wait for conditions to improve — they act to make things happen.

How It Appears Per Course

ADMN 201

Ch4 introduces entrepreneurship as the mechanism behind new ventures and a key driver of the Canadian economy. The course frames it around four questions: who entrepreneurs are (traits), what they do (process), how they enter the market (ownership strategies), and how they structure the business (legal forms).

The Entrepreneurial Process

Three elements must come together to launch a new venture:

graph TD
    A["1 · Opportunity Recognition\nSpotting a market gap or unmet need"] --> B["2 · Resource Acquisition\nCapital, people, physical assets\nWriting business plan + applying for loans"]
    B --> C["3 · Entrepreneur / Team\nThe person or group who organizes and leads it all"]
    C --> D[New Venture Launched]

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Exam scenario tip: If someone is writing a business plan or applying for a bank loan, they are in Element 2 — Resource Acquisition. The opportunity was already identified (Element 1 is done). The person is them (Element 3 is the identity, not the action).

Role of Small Businesses in Canada

Small businesses constitute the vast majority of commercial enterprises in Canada and are the backbone of the economy:

Contribution	What It Means
Job Creation	Primary source of local employment across all sectors
Innovation	Entrepreneurs commercialize ideas large firms overlook
Economic Diversity	Fill niche markets; make the economy more resilient
Community Impact	Keep capital circulating locally; support local suppliers

MCQ trap: Small businesses do NOT dominate international markets. Dominating a market disqualifies a business from being “small.”

Key Terms

• Entrepreneur — accepts both the risks and opportunities of creating/operating a new business
• Intrapreneur — creates something new inside an existing large organization; they don’t own the venture
• New Venture — a recently formed commercial organization providing goods/services for sale
• Small Business — independently owned and managed; does not dominate its market
• Bootstrapping — self-funding a venture with minimal external capital; “doing more with less”
• Incubators — facilities that support early-stage small businesses with space, legal advice, and services

Cross-Course Connections

PrivateEnterprise — the profit motive and freedom of choice are what make entrepreneurship rational; entrepreneurship is private enterprise in action LegalFormsOfBusiness — the legal form chosen shapes liability exposure, taxation, and capital access BusinessOwnershipStrategies — three entry paths: starting from scratch, buying existing, or franchising ClassificationSystems-LegalForms — the four legal forms are a classification system; analyzed through PHIL252 rules

Key Points for Exam/Study

• Process / Result / Scale — this three-way distinction is the most common MCQ target in Ch4
• Entrepreneurship = process; New Venture = result; Small Business = scale
• Most scenario questions test which element of the entrepreneurial process is being described
• Internal locus of control = the defining mindset trait; entrepreneurs believe they shape outcomes
• Intrapreneur ≠ entrepreneur; intrapreneurs work inside a large existing organization

Open Questions

• Can the entrepreneurial process model apply to non-commercial ventures (social enterprises, non-profits)?
• Does “internal locus of control” hold up across cultures with different attitudes toward fate and luck?