UNews - gross domestic product

Small business, big opportunity

trevor.kenney — Tue, 11 Dec 2012 22:01:06 +0000

According to the provincial government, small businesses make up about 96 per cent of all businesses in Alberta. While they may be small, they certainly are mighty. In fact, small businesses in the province contribute nearly 30 per cent of Alberta's gross domestic product (GDP) – a figure that puts them first in the country for small business GDP per capita in 2009. But it's not just small enterprises in Alberta that are economic powerlifters. Across Canada, small businesses are doing their bit by employing half of the total workforce.

The hard reality, however, is that 75 per cent of Canadian small businesses fold within nine years. Why does that happen, and what factors contribute to the long-term success of some small businesses?

These questions and others like them are being explored at the ��Ѹ��Դ��߿�Ƭ of Lethbridge's newly established Small Business Institute (SBI) in the Faculty of Management. Founded earlier this year, the SBI links small businesses to the expertise of researchers, professionals and other business people. Simply put, the SBI serves as a hub for research on small businesses and a resource for those who own, work at and are interested in them.

Dr. M. Gordon Hunter and Dan Kazakoff want to help area small businesses avoid the pitfalls that doom many great ideas.

The Institute investigates many issues related to businesses, including succession, sustainability and franchising. The SBI also works with rural areas throughout southern Alberta, where small businesses are often the lifeblood of the community.

"The SBI is an excellent example of U of L professors and researchers working to ensure that their work is relevant and valued in the community, and that leading business practices can be adopted by small businesses in the region," says David Hill, director of Centres and Institutes at the U of L.

The SBI was established by researchers Dr. M. Gordon Hunter and Dan Kazakoff. Both professors in the Faculty of Management, they worked together initially to co-author the book Little Empires: Multi-Generational Small Business in Southern Alberta, Canada. Published in 2008, Little Empires profiled 11 local, family-run operations.

"We wanted to help small businesses learn from each other," says Kazakoff, noting that the SBI was a logical evolution of the work invested in Little Empires. "With the Institute, we wanted to raise the profile of small businesses and interact with the community. It was our way of giving back."

The strategy works well, says Paul McDonald (BMgt '88), one of the entrepreneurs featured in Little Empires. McDonald, along with his brothers Jim (BMgt '80) and Gord (BMgt '89), owns the McDonald Auto Group, which has operated in southern Alberta since 1942. While the family business originally sold John Deere tractors, it now owns McDonald Chevrolet Buick GMC in Taber and McDonald Nissan in Lethbridge.

Participating in Little Empires, says McDonald, was an eye-opening experience. "It allowed me to see how other businesses operate and what allowed them to prosper." Today, he repays those insights by serving on the SBI's Advisory Board. "They want to know the challenges small businesses face and the resources we need to succeed in the future. We provide that feedback."

In addition to guiding the SBI's initiatives, Alberta businesses are also supporting them financially. This fall, ATB Financial made a $36,000 investment in the SBI that will sponsor a speaker series and bring industry leaders and researchers – including Hunter and Kazakoff – to rural communities throughout southern Alberta. The purpose of the business education seminars is to share knowledge and experiences on topics pertaining to small businesses.

That expertise is also showcased in Hunter and Kazakoff's second book, which was released earlier this year. Unlike Little Empires though, Small Business: Journey to Success was written primarily for an academic audience, reflecting the researchers' goal to eventually develop new courses within the Faculty of Management that focus on small businesses and bring new knowledge into the classroom.

In the meantime, Hunter and Kazakoff are busy with a number of research projects. The team, for example, has previously examined why small businesses fail (e.g., owners lack passion and focus) and how small enterprises survived the financial crisis (e.g., they were already operating in a fiscally conservative manner). Now the researchers are studying why small businesses typically do not partake in insolvency processes to deal with deteriorating financial situations (e.g., owners usually cannot afford the inherent expense).

Down the road, Hunter and Kazakoff will also look at small businesses' contributions to the local economy and how the agricultural industry has been affected by changes to the Canadian Wheat Board. The researchers also plan to compare the success stories of indigenous entrepreneurs in Canada with those of the Maori in New Zealand.

"Through our research," says Hunter, "we hope to expand our reach locally, regionally, nationally and internationally."

For more information on the U of L's Small Business Institute, please visit: www.uleth.ca/management/sbi

This story first appeared in the Fall 2012 issue of SAM. For a look at the full issue in a flipbook format, follow this link.

Non-profit payback

trevor.kenney — Tue, 19 Oct 2010 04:36:59 +0000

There have been many nights over the last 16 years that Dr. Mary Runté has gotten little, if any, sleep. Raising two children has been no small factor in the equation, but even before Runté took on motherhood – the role by which she admittedly defines her life and holds most dear – she sacrificed shut-eye while out on the streets of east Vancouver, up at all hours of the night to do what she could to ease the plight of drug addicts, pregnant prostitutes and anyone else she encountered who was living their lives on the fringe of society.

It's not exactly the professional history you might expect a professor of management to have, but then again, Runté isn't your average management professor. Prior to 1998, Runté had no inclination at all to study anything remotely related to business. Her heart was then, as it is now, in the not-for-profit sector – although she also came to love management in a rather roundabout way.

Initially, Runté wanted to be a teacher, and was enrolled in the Bachelor of Education program at the ��Ѹ��Դ��߿�Ƭ of Alberta en route to that goal. It was during that course of study that Runté discovered the impact she wanted to have on students went beyond teaching them the finer points of Shakespeare.

"You know how there are people who are into extreme sports? I'm into extreme jobs," Runté says with laughter. "I wanted to work in the inner city, so I was teaching kids who were dealing with huge life issues – drugs, gangs, various kinds of abuse. I quickly realized that I wanted to make a different kind of impact on their lives. That's when I went into social services."

Runté abandoned the BEd and instead pursued a BA in psychology, all the while working in the non-profit sector. After graduating, she spent more than a decade willingly subjecting her professional self to some of the grittiest and most challenging circumstances imaginable, and moved up the ranks of social work with expediency. While she loved the work, Runté found that she lacked many of the basic management skills necessary to run the programs. Suddenly, and unexpectedly, earning an MBA became a logical move.

"A lot of people were absolutely shocked and even viewed me as a traitor," Runté says reflectively. "In the non-profit sector, management is seen as the big bad world of business. Debunking the myth that all business is bad was, and still is, very important to me."

Dr. Mary Runté takes business to the streets, saying its power can be used as a positive influence.

Determined to remain true to her non-profit roots, Runté chose York ��Ѹ��Դ��߿�Ƭ for her MBA because, at the time, it was one of the only business schools in Canada that researched non-profit organizations.

"It was extraordinarily positive for me to interact with faculty who understood that business has power, and that the power can and should be used carefully," says Runté. "It's possible to prioritize people over dollars, the environment over profitability – or at least find a respectful blend of both sides."

Runté graduated from York in 2000 and began teaching sessional classes at the U of L that year. She completed a PhD through Saint Mary's ��Ѹ��Դ��߿�Ƭ in 2005. Today, on track to become a tenured faculty member, Runté feels fortunate to be able to combine both of her professional disciplines, teaching business courses within the area of social responsibility – a declared minor that the Faculty of Management has now offered for a few years.

"It's core in the Faculty's vision to promote social responsibility in business. Every student takes a required course in it. In recent years, social responsibility has become more fashionable in business schools, but the U of L was one of the first universities to make a demonstrated commitment by offering a minor in the subject," says Runté. "I'm absolutely blessed to be teaching here."

A segment of the required course Runté teaches in social responsibility in business deals with non-profit management. Students must complete a minimum of nine hours of volunteer work and are free to choose any non-profit organization they wish to support. Runté says that it's very common for students to become impassioned with volunteerism and continue to be active within the organizations indefinitely.

"They intend to do nine hours of volunteering, and at the end, they're treating it almost like a part-time job," says Runté.

While Runté continues to champion the non-profit sector, emphatically pointing out that it's a significant employer within the country (constituting 13 per cent of the labour force) and contributes a surprisingly large percentage of the gross domestic product (seven per cent in 2003), she is quick to balance her view.

"Business isn't evil. It's important to our society. It has power, and that power gives us resources to do great things. It can help shape a more positive world. That's what I teach my students."

Non-profit payback

trevor.kenney — Fri, 16 Oct 2009 21:12:54 +0000

"They intend to do nine hours of volunteering, and at the end, they're treating it almost like a part-time job," says Runté.

"Business isn't evil. It's important to our society. It has power, and that power gives us resources to do great things. It can help shape a more positive world. That's what I teach my students."

UNews - gross domestic product

Small business, big opportunity

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