Entrepreneurship in Canada, the United States, and throughout the World

Presented at the Canada-United States Law Institute Annual Conference

By

Dr. Robert D. HisrichGarvin Professor of Global Entrepreneurship

and Director, Center for Global Entrepreneurship Thunderbird School of International Management

15249 North 59th AvenueGlendale AZ 85306-6000, USA

E-mail: robert.hisrich@thunderbird.eduTelephone: 602-978-7571

Fax: 602-439--1435

Decisions for a Potential Entrepreneur

Change from Present Lifestyle

Work Environment

Disruption

Form New Enterprise

Desirable1. Cultural2. Subcultural3. Family4. Teacher5. Peers

Possible1. Government2. Background3. Role Models

Aspects of the Entrepreneurial Process

Identify andEvaluate theOpportunity

DevelopBusiness Plan

ResourcesRequired

Manage theEnterprise

• Creation andlength of opportunity

• Real and perceived value of opportunity

• Risk and returns of opportunity • Opportunity versus personal skills and goals • Competitive environment

• Title Page• Table of Contents• Executive Summary

1. Description of Business

2. Description of Industry

3. Marketing Plan4. Financial Plan5. Production Plan6. Organization Plan7. Operational Plan8. Summary

• Appendices (Exhibits)

• Existing resources of entrepreneur

• Resource gaps and available supplies • Access to needed resources

• Management style • Understand key variables for success • Identify problems and potential problems • Implement control systems • Develop growth strategy

Entrepreneurial Culture of a Country

Poor Strong

Entrepreneurial Entrepreneurial

Culture Culture

1) Ease in forming a new venture

2) Tax rate on businesses

3) Tax rate on individuals

4) Bankruptcy laws

5) Extent of infrastructure

6) Government attitude toward business

7) Government attitude toward entrepreneurship

Canadian Business Statistics

2001 2002 2003 2004 2005

New Firms 19,474 20,987 22,531 24,703 30,937

Bankrupt 1,100 1,106 1,002 922 787

http://www.bcstats.gov.bc.ca/data/bus_stat/bus_ind.asp

US Business Statistics

2001 2002 2003 2004 2005

New Firms 585,140

569,750

612,296

642,800e 671,800

Firm Closures

553,291

586,890 540,658

544,300e 544,800

Bankrupt 40,099 38,540 35,037 34,317 39,201

Comparative Country Information

Starting a Business in: United States Canada Austria China I ndia South Africa

Incorporate and Register a New Firm US$ $285.74 $278.06 $2,052.79 $161.96 $530.69 $340.71

Liscenses & Permits i.e.Wherehouse 14,000 sq ft (1300.6 sq meters)

Pre, During, and Post Construction 4,704.56 16,524.44 13,758.72 1,422.40 2,665.12 1,211.18Utilities 2,296.28 21,926.65 15,490.39 38.57 1,697.83 448.58

Total $7,000.84 $38,451.09 $29,249.11 $1,460.97 $4,362.95 $1,659.76

Enforcing ContractsAttorney cost (% of debt) 7.3 11.3 6.9 22.7 30.6 11.3Court cost (% of debt) 0.4 0.6 2.1 4 5.1 0.2

Total (% of debt) 7.7 11.9 9 26.7 35.7 11.5

Taxes - Excluding VAT/GST (2nd yr of Operation)Federal (Progressive) 15%-35% 13.12% / 22.12% - - (Interest Tax) 20.91% -Corporate 7.5% - 25% 33% 33.66% 29%Social Security - - 22% 44% 12% -

Total Tax Rate (% profit) 46.0% 43% 56.1% 77.1% 81.1% 38.3%

Investor Protection Index 8.30 8.30 3.70 5.00 6.00 8.00

World Bank Ranking on Starting a Business (out of 174) 3 1 74 128 88 57

World Bank Ranking Ease of Doing Business (out of 174) 3 4 30 93 134 29

Entrepreneurship throughout the World

• Four things needed for a new venture creation:– Idea– Money– Entrepreneur– Infrastructure

• Ideas and creativity are worldwide• Money (start-up) capital is difficult to obtain and needs to be

available• Entrepreneurs are more similar than different throughout the world• Infrastructure and government attitudes vary significantly worldwide

“The road not taken.” ~ Robert Frost