Welcome!

John Pickard is your Professor

[email protected]

ENTREPRENEURSHIP
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 • Welcome
• Q &A
• Canadian Small Business Stats
• The Value Proposition, Part 1
Today • Familiarization Assignment
Canadian Private Sector Employment
What is the definition of a small business in Canada?

• 1 to 4 employees: Micro-enterprise (54% of all businesses)

• 5 to 100: Small business (44%)
• 101 to 499: Medium-sized business (2%)
• 500-plus: Large business (.2 %)

(Source: Industry Canada)

Canadian Private Sector Employment
How many small businesses are there in Canada?

• There are nearly 1.15 million small businesses in Canada (businesses with
at least one employee on payroll). Total businesses were 1.18 million. 97%
are small!

(Source: Industry Canada calculations using data from Statistics Canada

 Canadian Private Sector Employment
• How many Canadians work for small businesses?

• 8 million employed (70 per cent of Canada's total workforce)

• 2.4 million employed by medium sized companies (20% of total)
• 1.2 million employed by large enterprises (10% of total)

• 40 per cent of employed Canadians worked for businesses with fewer than 20
employees.

(Source: Industry Canada calculations using data from Statistics Canada)

 Canadian Private Sector Employment
How many Canadians are self-employed?

• 2.7 million Canadians are self-employed.

• 31 per cent of self-employed Canadians reported working more than 50 hours per
week, while 4 per cent of employees reported working more than 50 hours.

(Source: Industry Canada calculations using data from Statistics Canada)

 Canadian Private Sector Employment
What is the success rate for small businesses and entrepreneurs?

• Current survival rates for small and medium-sized businesses in Canada decline over
time.
• About 85 per cent of businesses that enter the marketplace survive one full year, 70
per cent survive for two years and 51 per cent survive for five years.
• About 104,000 new small businesses are created in Canada each year. About 11% die each
year.

(Source: Industry Canada calculations using data from Statistics Canada)

 Canadian Private Sector Employment
How do small businesses contribute to Canada’s economy?

• 86 per cent of Canadian exporters were small businesses.

• These businesses accounted for 42 per cent of Canada's total export value.

• Small businesses contribute slightly more than 42 per cent to Canada’s GDP.
• Medium 11%
• Large 48%

(Source: Industry Canada calculations using data from Statistics Canada)

 Canadian Private Sector Employment
• Small and Medium-sized businesses account for over 90 percent of
employment in seven industries:

• agriculture (98.8 percent)

• accommodation and food services (98.0 percent)
• wholesale and retail trade (97.1 percent)
• construction (96.0 percent)
• business, building and other support services (93.4 percent)
• Janitorial, waste removal, landscaping, maintenance, etc.
• professional, scientific and technical services (90.7 percent)
• other services (98.6 percent)

Sources: Statistics Canada, Labour Force Survey (LFS); and Innovation, Science and Economic Development Canada calculations.
How many jobs do SMEs create?
• Small businesses account for 97 percent of all firms in Canada and
proportionally play a large role in net job creation.

• The contribution to net employment

• Small Business - 87.7%

• Medium-sized Business – 7.7%
• Large businesses 4.6%

Sources: Statistics Canada, Labour Force Survey (LFS); and Innovation, Science and Economic Development Canada calculations.
Bankruptcy and insolvency statistics
• A fraction of existing enterprises declare bankruptcy. In a given year
about 3,100 Canadian businesses file for bankruptcy.

• Greatest number of insolvency cases occurred within the

accommodation and food services sector.
• the industry is fiercely competitive
• Food businesses are one of the easiest businesses to start

• Manufacturing firms were next in the number of insolvencies,

highlighting the challenges facing this sector over the past decade.

Sources: Statistics Canada, Labour Force Survey (LFS); and Innovation, Science and Economic Development Canada calculations.
 What types of financing do SMEs use?
• Key that SMEs have access to the financing
• grow and thrive
• Insufficient access to financing can lead to
• liquidity shortages (cash flow)
• stagnant growth
• reduced market competitiveness
• SMEs rely on financing to pursue new innovations and expand into
new markets.
• Firms accessing financing is an important indicator of overall economic
health
• About 51 percent of SMEs sought external financing, compared with 49 percent
that did not request external financing
• The total authorized amount of financing to SMEs is about $53 billion

Sources: Statistics Canada, Labour Force Survey (LFS); and Innovation, Science and Economic Development Canada calculations.
 What types of financing do SMEs use?
• Start-up SMEs typically lack both a credit history and the collateral
needed to secure a loan, which makes informal financing the most
common source for new businesses

• Over 80 percent of start-ups used personal financing

• 45 percent used credit from financial institutions
• 19 percent received trade credit from suppliers

Sources: Statistics Canada, Labour Force Survey (LFS); and Innovation, Science and Economic Development Canada calculations.
 Business Owner Characteristics
What is the split of male/female SME entrepreneurs?

• Based upon the survey data

• equal partnerships between male and female owners account for nearly
20 percent of all SMEs
• Majority ownership by males – (64.7 percent)
• Majority ownership by females – (15.7 percent)
• There is evidence to suggest that female owned business are more successful
(revenue generated, ROI)
• Companies with leadership diversity have lower staff turnover and revenue
19% higher than low diversity leadership teams report.

Sources: Statistics Canada, Labour Force Survey (LFS); and Innovation, Science and Economic Development Canada calculations.
In Summary: SME’s are the Economy in Canada
See you in
10 minutes
Value Proposition
Developing a compelling value proposition
– the pathway to customers
Agenda

• Value Proposition – Defining, Formats & Use

• Value Proposition to Positioning
• Why is it Difficult to get a good Value Prop?
• Value Proposition Canvas
• Questions
Value Proposition
• What Value do we deliver to Customers?
• WIIFM? What’s In It For Me? (the customer)
• Which one of our Customer’s problems are we helping to solve?
• What bundles of products and services are we offering to each
Customer Segment?
• Different segments respond to different features
• Which customer needs are we satisfying?
What is a Value Proposition?
Definition

A value proposition is a clear It is the sum of the offerings

statement about the outcomes that and experiences delivered
an individual or an organization can to your customers, during all
realize from using your product, of their interactions with
service or solution. your organization

Value proposition is the #1 thing that determines

whether people will bother learning more about
your solution.

…. GATEWAY TO ATTENTION
The Value Proposition….It is the sum of the offerings and experiences delivered to
your customers, during all of their interactions with your organization. Think about a
car purchase….

Online search Sales Staff

Showroom Welcome

Test Drive

After Sales Service

Price Negotiation 39
Don’t forget!

The value proposition

is the Gateway to
Attention

40
Different Formats of the
Value Proposition

• Short Version
• Designed to get Attention

• Long Version
• Normally with Feature Bullets

• Always best when supported by a visual

Uber – Value Proposition
The Smartest Way to Get Around
Uber – Value Proposition Short
The Smartest Way to Get Around version

Long
version

Visual
iPhone – Value Proposition Short
version

Apple iPhone – The Experience IS the Product

Long
version

Visual
Slack – Value Proposition
Slack – Be More Productive at Work with Less Effort
 Short
Slack – Value Proposition version

Slack – Be More Productive at Work with Less Effort

Long
version

Visual
Don’t forget!

The value proposition

should be
customer-focused.
NOT focused on you.

47
More than one audience
• Sometimes there is more than one audience that is required to be
incorporated into the Value Proposition

• Seniors
• Students
• Gender
• Corporate or Consumer
Marketplaces or Client Types
• Who do you sell to?
• This is very important because different types of
users will buy in a different way
• They will also see the value in a different way
• A Student will make decisions in a different way than a
Senior or a Business Manager
• The market you sell to may also require a different
approach (consumer/business, scientific/artistic)
What about Price?
Remember it is a Value Proposition

Focus on the Value you provide not on the Price.

Focusing on Price or Discount may make it easier to

sell, but it reduces it to one dimension and turns your
product or service into a commodity.

Someone can always beat your price.

Places to Use your Value Proposition
• Web Site – Main Page
• Brochures
• Posters
• Email
• Communication
• Signs in/on your building
• Packaging
• Training your staff
From Value Proposition to Positioning
Positioning: A formal definition

A high-level promise statement that defines how we want to

target customers to think and feel about what we offer
relative to competitors, and the key customer perceptions
we want to create or change.

…….Includes Comparison with Competitive Alternatives

From Value Proposition to Positioning
Value Proposition for BMW:

WIIFM (the customer)

“BMW delivers performance, style, luxury and that

is the image I want to present”
From Value Proposition to Positioning
Positioning:

A high-level promise statement that defines how we

want to target customers to think and feel about
what we offer relative to competitors, and the key
customer perceptions we want to create or change.

BMW “Ultimate Driving Machine”

“Sheer Driving Perfection”
“The Ultimate Driving Experience”
Why is it so hard to figure out a Value
Proposition?
• The needs and what people value are changing faster
all the time (electric cars vs. gas fueled)

• Other people and companies are influencing opinions

(station wagons to minivans to SUVs)
• We think about our own position, and we get
separated from our customer’s perspective
(It’s about them, not us)
Why Can’t You Just Ask Your Customers What
they Want?
• Steve Jobs famously said, “People don’t know what they
want until you show it to them.”
• Status Quo Bias - They don’t want to change what they
are doing.
• Desire to please - Often during interviews, customers
will attempt to answer a question the way they think
they should answer the question or provide an answer
they think is “correct.”
Value Proposition Canvas
Whiteboard,
– Credit: Business Models Inc. blank paper,
online template

https://www.businessmodelsinc.com/about-bmi/tools/value-proposition-canvas/
Value Proposition Canvas
– Credit: Business Models Inc. Persona (s)….
what does your
customer look like?
1. Persona 6. Gain creators
Fill in the name of your persona. Which customer What can you offer your customers to
segment do you have in mind for this proposition? help them fulfill the gains? Be concrete
2. Job-to-be-done (in quantity and quality)!
What are the jobs your customer is trying to get 7. Products and services
done in work or life? These could be both functional What are the products and services you
and social. What basic needs do your customers can offer your customer so they can get
have (emotional and/or personal)? his job done? How is it not a silver bullet?

3. Pains
What is annoying or troubling your customer? What
is preventing them from getting the job done? What
basic What is hindering your customer’s activities?

4. Gains
What would make your customer happy? What
outcomes doe they expect and what would exceed
their expectations? Think of the social benefits,
functional, and financial gains.
5. Pain relievers
How can you help your customer relieve their
pains? Be explicit about how they can help.
1. Persona
Fill in the name of your persona. Which customer segment do you
have in mind for this proposition?
- Business travellers. Visiting a new city. 30-50 years of age. All
genders. Middle income.

2. Job-to-be-done
What are the jobs your customer is trying to get done in work or life?
These could be both functional and social. What basic needs do your
customers have (emotional and/or personal)?

- Get from A to B; Minimize travel stress; Allow them to multi-task

while travelling; Track expenses; Optimize time; Be comfortable.

3. Pains
What is annoying or troubling your customer? What is preventing
them from getting the job done? What is hindering your customer’s
activities?

- Unfamiliar territory; Time stresses; What are the local

transportation options (bus, taxi, shuttle, subway, walking)?
Multiple trips per day; Parking hassles; Payment hassles; Climate
issues.
4. Gains
What would make your customer happy? What outcomes do they
expect and what would exceed their expectations? Think of the
social benefits, functional, and financial gains.

-Stress free transportation; No chat option; Certain pick-up point

and timing; Safe environment; Clean environment; Perks
(newspaper, water), Multiple ride options (size and luxury of
vehicle). Multiple stops

5. Pain relievers
How can you help your customer relieve his pains? Be explicit
about how they can help.

- GPS “best route” travel; Predicted arrival (visual); App works in

any city; One app for any location/situation; cashless experience;
Rating system ensures customer-centered experience
6. Gain creators
What can you offer your customers to help them fulfill the gains? Be
concrete (in quantity and quality)!

-Unified user-friendly app; Visual reference on location; Automatic

payment; Tip optional; Chat optional; Rating system ensures a quality
experience;

7. Products and services

What are the products and services you can offer your customer so they
can get his job done? How is it not a silver bullet?

-Multiple ride options (size and luxury choices); Uber Eats; Uber Central
(book for 3rd parties); Uber Vouchers; Uber Pool; Scooters; Uber Freight;
Uber Connect (courier)
Next week, we’ll talk about the Business Model
Canvas…..The Value Prop is the central feature of
that…..and your business
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In closing………….

- Welcome!
- Learning, Assignments and News posted to the content platform
- Next Week; The Business Model Canvas
- Remember the assignments…..
- Scavenger Hunt. Due May 21st, 4% of total mark.
- Due at 11:59 p.m. Eastern Time.
- Discussion Board, Art of the Start, Chapter 1 & 2!
- Join next week for a live session in the classroom.
- Be well!
[email protected]