Entrepreneurship and Risk Management Techniques


“Risk is the nature of true business growth.”  – Wayne Barrow

Starting up your own business is always a welcomed idea. Entrepreneurship is a valuable asset to the Canadian economy. However, start-ups require taking up some level of risk in order to be successful especially when trying to break into a competitive industry. According to Statistic Brain (2016), 75% of all start-ups will have failed by the tenth year of operations.


Entrepreneurships fail because they are not risk-free. The target market may not large enough, the product may not sell, the price might be too high or too low, or products may not be promoted using the right medium – these are some of the many risks associated with starting a business. The flip side to the risk associated with start-ups is Opportunity. The greater the opportunity and reward expected to be derived, the greater the risk involved in starting the entrepreneurship. Entrepreneurs should note that even though all reward is a result of great risk, not all risks will result in rewards. In order to increase the likelihood of success and mitigate some of the risk associated with entrepreneurship, a thorough risk assessment and risk management strategy should be established. Risk assessment begins with understanding the various types of risks involved in starting a business and its effects on the organization’s goals.

What kind of risks might entrepreneurs have to deal with? There are various types of risks that entrepreneur has to consider including:

  • Market Risk
  • Compliance Risks
  • Finance Risk
  • Technology Risks
  • Systemic Risks
  • People Risk


When starting up a business, the entrepreneur needs to be aware of his/her risk tolerance level, and develop plans and contingencies for managing each risk factor. The entrepreneur needs to thoroughly assess the likelihood of the risk occurring, and its impact on short and long term objectives.

Risk: Likelihood and Impact

How does an entrepreneur identify the likelihood or impact of risk? The likelihood of risk is the probability and frequency that the risk will occur. For example, if you’re starting a business that involves a lot of online business to business (B-to-B) or business to customers (B-to-C) transactions, but you have no internet security setup, and your business website is not secured, the probability and frequency – that is the likelihood – of fraud or information risk occurring is high. The impact of risk, is the consequence and severity of the risk on the organization’s goals. The occurrence of fraud risk (theft of money) could have a devastating effect on an organization’s long term goals. For example, a business is only making profits of $40,000 each year and an employee has been misappropriating $10,000 worth of funds annually. That’s 40% of its profits being misused! Over time, if this pattern continues, it could lead to the business eventually declaring bankruptcy.  In this scenario, fraud risk has a high impact on the company’s long term goals. Understanding the likelihood and impact of risk, determines the entrepreneur’s response to each risk factor.

Risk Management

There are generally four responses in managing risk – Accept the Risk, Ignore the Risk, Transfer the Risk, and Mitigate the Risk

Accepting the Risk – Accepting the risk involves developing contingency plans for when the risk does occur. Generally low-impact, low-likelihood risks may be “accepted”. For example, you have done your research, and believe there is a 95% chance that your product is needed by your target market. The likelihood that the product will not be needed is only 5%. As an entrepreneur, you may choose to accept this risk, and establish contingency plans such as developing new products, or targeting a new market group, should the product fail to sell.

Ignoring Risk – Ignoring the risk means that the entrepreneur has no contingency plans to deal with the risk, should it occur. Generally, low-likelihood risks with little or no impacts may be ignored. When risk is ignored, the entrepreneur is willing to bear the consequences of the risk.

Transferring the Risk – Sometimes the entrepreneur might choose to transfer the risk to other parties. This usually involves purchasing insurance/protection with a second party. Note however, that transferring the risk does not always mean the risk is completely eliminated, it only reduces the risk that the entrepreneur has to manage. For example, an entrepreneur realizes that 80% of machinery and equipment being used in production, will likely malfunction in the next year. He may opt for purchasing warranty or insurance with a second party. In the event that a malfunction does occur, the warranty with the second party will likely cover most of the costs, however the entrepreneur might also have to bear some of the repair costs.

Mitigating the Risk – When risk is mitigated, the impact and likelihood of the risk occurring is reduced.

With a thorough understanding of the likelihood, impact and response to risk, the entrepreneur should establish a proper risk management strategy. The basic steps for planning risk management strategies are as follows:

  1. Listing all risk factors – anything that could potentially affect the success of your business
  2. Assigning each risk factor to a type of risk, as discussed above
  3. Rating the likelihood of each risk factor occurring
  4. Listing the Impact and consequence of each risk factor occurring
  5. Listing the Risk Response to each risk factor
  6. Outline the implementation cost for each risk response above
  7. Deciding on which Risk Responses to implement based on a thorough analysis of the first six steps

Entrepreneurs should ensure that the most obvious risk factors are managed first. A proper risk management strategy could be the difference between a business that fails after its first year of operations, and one that continues to run beyond its tenth year of operations.



Hirai, A. What Kills Startups. Retrieved from https://www.caycon.com/what-kills-startups.php.

Bluemner, A. (2013, July 18). The Four Things Every Startups Should Know Before Selecting a Software Platform. Retrieved from http://findaccountingsoftware.com/expert-advice/the-four-things-every-start-up-should-know-about-selecting-software/

Statistic Brain (2016, January 4). Startup Business Failure Rate by Industry. Retrieved from http://www.statisticbrain.com/startup-failure-by-industry/




How Small Business Owners Can Save on Taxes

September 15, 2016

Like individuals, small businesses can also save a lot on taxes by claiming certain deductions, and who doesn’t want to save! It feels good having that extra bit of cash, doesn’t it?

Deductions and credits which small businesses can claim to reduce the amount of taxes paid include:

  • Small Business Deduction (SBD)
  • Deductions on Entertainment
  • Deductions on Moving Expenses
  • Workspace-in-the-Home deductions
  • Scientific Research and Experimental Development Tax Credit

Small Business Deduction (SBD)

Canadian Controlled Private Corporations (CCPC) who are residents of Canada, may elect to claim the small business deduction. The small business deduction limit for small business owners is $500,000. To be eligible, the business should have active business income between $10 and $15 million. For every $1, which the active business income exceeds the $10 million, the business is eligible to claim $10. For example, if a business had active business income of $12million and taxable income of $20 million, the small business owner would be eligible to claim $200,000. This amount is then used to reduce the small business deduction limit from $500,000 to $300,000. When filing taxes, small business owners are allowed to claim 17% of the least of the active business income, taxable business income or business limit, in this case, they can claim $51,000. See Figure 1 for calculations.

Figure 1


Deductions on Entertainment (Business Meetings and Lunches)

Business Lunches with clients, as well as events where a business client is being entertained are 50% tax deductible for small businesses, provided that the amounts being claimed are “reasonable”. This may also apply to the cost of small business owner’s meals if they travel for work or attend a convention, conference, or other similar events.

Moving Expenses

Small business owners might be able to claim moving expenses, provided that they relocated to a new place of residence, and the new place of residence is at least 40km closer to the business location.

Workspace-in-the-Home Expenses

Provided that more than 50% of the work is done at home (including business meetings) and the workspace at home is used to earn only business income, the small business owner may claim deductions on costs of the home office such as heating, electricity, maintenance, property taxes etc.

Scientific Research and Experimental Development Credit (SR&ED)

The Scientific Research and Experimental Development Credit is a federal tax incentive program designed to encourage Canadian businesses of all sizes and in all sectors to conduct research and development in Canada. A CCPC can earn a refundable investment tax credit (ITC) of 35% on eligible SR&ED expenditures up to a maximum of $3million. This ITC is 100% refundable if incurred after 2014, and 40% refundable if incurred before 2014. In addition, CCPCs may also claim a basic 15% non-refundable ITC on amounts over $3million. Other corporations, i.e. non-CCPCs can also claim the basic rate of 15% non-refundable ITC on eligible SR&ED expenditures. This can be applied to reduce tax payables.

There are other credits and deductions which small business owners can claim to reduce the taxes payable. It is advisable to check the CRA website for more information on these deductions.


Canada Revenue Agency (2016) Business Expenses. Retrieved from http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/bsnssxpnss/menu-eng.html

Alternate ending 2: The Lottery ticket

Again, scene 1-3 is the same from dialogue 1

Scene 4

Mike is at work, with Dave.

Mike : Rachel won the lottery yesterday

Dave: That’s good.

Mike: I know, but I think she’s planning on keeping all for herself

Dave: So?

Mike: I’m her husband, I should get some of it too

Dave: So what are you going to do?

Mike: Well since you asked, I’m going to need your help. I need you to help me hire a mobster.

Dave (shocked): Is that what? You’re not trying to kill her, are you?

Mike: She’s too stubborn. She won’t give up the money. It’s my only choice.

Dave (sighs) : Only because I’m your friend. I will help you.

Mike: Attack tomorrow. She will be home then. It’s her day off from work.

Dave leaves.

Scene 5

Outside Mike’s office.

Candice sees Dave, she goes over to say hello.

Candice: Hi, aren’t you Dave, Mike’s best friend?

Dave: Yes, and you’re Candy, Rachel’s friend

Candice: Candice. I thought you looked familiar. Are you coming from Mike’s?

Dave:  Yes, he told me about the lottery, I’m sure Rachel told you about it.

Candice: Yes she did, what else did Mike say?

Dave: He wants me to help him hire a mobster.

Candice : Do you know of any?

Dave: No

Candice: Here (she hands him a sheet of paper) This is the number for an agency. I’m sure you could get someone there. A friend of my sister’s husband gave it to me. He worked there a few years ago. He said to call that number if I was being stalked. But I haven’t needed to call them since. You’ll find it useful.

Dave: thanks. Will give them a call. Dave leaves

Candice (to herself) I’m sure Mike is planning on killing Rachel, what else would he need a mobster for? I better go call that number I gave Dave before he does. I want to make sure they get someone good for the job. What sweet revenge!



Scene 6

Later that day, Dave is on the phone

Dave: Yes hello,  Could you send someone over to 123, Alphabet Drive, Toronto, Ontario, L2T5K7.

Dave(writing in a notepad) : Yes, yes, okay. Tomorrow at 2pm. Excellent.

Dave calls Mike

Dave: It’s all settled. 2pm sharp. Tomorrow.

Mike: Thanks buddy. I knew I could count on you.


Final Scene

2pm the next day

The mobster stealthily walks into the room and shoots Rachel from behind

The mobster walks to the door, hears footsteps, turns around and sits on the couch.

The door opens. In walks Mike, unaware of the Mobster.

The Mobster raises a gun, and shoots Mike too.

The mobster gets up, faces the camera and takes off the mask.

The mobster is Candice.

Candice : Of course, When I called that number,  I asked them to let me be the one to attack. Revenge couldn’t have been sweeter. I had to kill Rachel, after all those years of causing me pain, after making me lose my husband. It was only human that would kill her and Mike (looks at the body briefly) I figured I’d eliminate Mike so I can spend the money alone.





Alternate ending 1: The Lottery ticket

SCENE 1-3 IS THE SAME from previous dialogue.

Scene 4:

That night..

Rachel is in the kitchen cooking

Sound of the front door opening.

Mike walks in.

Rachel: Mike is that you? How was ur day? How was work?

Mike: Work was excellent. Something smells good in here.

Rachel: Just making dinner. It will be ready soon.

CU of Rachel pouring powdery substance in a plate

Rachel walks out of the kitchen, same plate in hand.

Rachel : Here’s your dinner. It’s penne pasta in tomato sauce and some chicken wings. Just the way you like it. I got some red wine earlier on. Let me get some glasses.

Rachel walks toward the kitchen but stops at the door.

Rachel stands there watching Mike eat.

 Mike  (takes a spoonful) this is really good.

Rachel : thanks! I’ll be right out.

After a few more spoons. Mike Grabs his stomach.

Mike drops to the ground. He crawls 2 steps, and suddenly drops flat on the floor. Dead.

Rachel (smiling) What an idiot, he actually thought he could outsmart me? Guess who gets to keep the money?

She walks away from the camera into a room, and walks back out, towards the camera. Smiling. Cheque in hand.

My beloved Country

Nigeria, the country with the 10th largest oil reserve in the world is also the 46th poorest country in the world? Shouldn’t exporting all that oil rake in more profits for the country? Why then is the economic state of Nigeria so poor?

Growing up in the 90’s and early 00’s, I was blessed with the opportunity of living in Nigeria. Of course, at the time, I didn’t really realize how bad the situation was. I lived with my family in a five-bedroom house, with lots of space where the kids played around. When my parents were growing up, Nigeria was a great place to be, I’ve been told. At the time, Nigeria still had the groundnut pyramids (made from piles of sacks filled with peanuts), and different breweries. The first skyscraper in Africa was built, the Cocoa House in Ibadan, Oyo State, Nigeria. The Nigerian Railway was in full operation, and the cost of food was extremely low. The Nigerian Naira at the time had a higher value than the American Dollar. Nigeria in the 60s was a tourist attraction, and was booming with immigrants and visitors from international countries. This was very evident in schools, as a lot of the professors were British, Indian or American; all foreigners. The education system was excellent and ranked among the best in Africa and perhaps even in the world.

The Nigeria I grew up in couldn’t have been any different. Life in the 60’s in Nigeria when my parents grew up seems like such a mirage, compared to the state of the country when I grew up. The pyramids are now extinct, and there were several wars amongst the various tribes of my beloved country resulting in a continuing degrading of resources. The Nigeria I grew up in, is now engulfed in greed and corruption, first from those in authority, and replicated by the followers. It’s a dog-eat-dog world, where you have to fight with the skill to survive, leading to an increase in armed robbery and theft. Roads are in such poor conditions, that travelling has now become a risk. There’s rarely electricity, and water supply has been cut short, sometimes leading its victims to drink from the same source used to wash. The price of food has skyrocketed, so much so, that the average income is not enough to supply food AND pay the bills.

Is there still hope for such a country? I strongly believe there is. We have been consumed by fear that we cannot progress, so we need to conquer that fear as a country. All it takes is one individual, who is willing to risk his/her life to stand up and fight for what is right. All it takes is one individual who will put the needs of others over himself/herself. It will only take one leader, who will ensure that revenue is spent where needed, on refurbishing our roads, on the sustenance and provision of water and electricity, shelter and all other basic needs for the citizens. All it takes is one leader. Will it be you? Will it be me? Let us rise to that call NOW.

The Lottery Ticket Act 1 Scene 1, 2 and 3

Mike : the cheating husband
Rachel : the cheated wife
Candice : Rachel’s best friend and Mike’s girlfriend
Adam: Mike’s friend and Mobster (in certain scenes)

Dialogue 1

Scene 1

Rachel picks up the phone
(In an excited tone) –
I won the lottery? Are you sure about that? This is exciting news!

Rachel calls her husband Mike
Rachel:  Mikey, guess what? I just won the lottery! Isn’t this exciting? Now can we finally go on that trip to Paris.

Mike: That’s great news Rachel, I’m just going to finish up my work here, and I’ll be home within the hour. Prepare a special meal. We will celebrate, and decide how to spend the money (Mike Hangs up).

Candice : What just happened honey?

Mike: Rachel just won the lottery

Candice: So what are you going to do with the money?

Mike: I have no idea, Candy

Candice: You should get the money from her, so we could use it. Your marriage isn’t exactly a happy one. It would be wiser to spend the money on things that make you happy. Wouldn’t you agree?.

Mike: You’re right. Let me go home and talk to her. I’ll see what I can do.

Scene 2

Mike and Rachel are at home, having dinner

Mike : You should go pick up the money before the end of the week

Rachel : Yea, I will. That’s a lot of money though, how should we spend it?

Mike: Let’s save it in my bank account for now. We don’t really need money right now. Let’s invest it.

Rachel  : (hesistantly) Well I don’t know..let me get the money first. I’ll decide by then.


Scene 3

The Next morning, Rachel calls her friend Candice for advice

Rachel : Hello? Candice? Guess what! I won the lottery!! I got the call yesterday.

Candice (sounding a little too excited): I’m happy for you!! What are you going to do with the money?

Rachel: I’m not sure

Candice : You should invest it, save it at the bank.

Rachel: That’s what Mike said but…..

Candice: Trust me, do it. That’s the best option. Would I lie to you?

Rachel: I trust you, its Mike I don’t trust, I’ll open an account tomorrow, then save the money there when I receive it.

Candice : Sounds good.



Mike is at work, with Dave.

Mike : Rachel won the lottery yesterday

Dave: That’s good.

Mike: I know, but I think she’s planning on keeping all for herself

Dave: So?

Mike: I’m her husband, I should get some of it too

Dave: So what are you going to do?

Mike: I’m not sure. But i will get some part of that money.


A Few days later

Mike and Rachel are arguing

Mike: ( Grabbing her hand, shaking her violently) What is wrong with you woman? Wasn’t I the one who asked you to enter in the lottery? Don’t I deserve some of the money?

Rachel : (in tears): Exactly, I entered the lottery, I won the money. I got the call not you, I don’t see why you deserve anything from me.

Mike: (Grabs her throat) Shut up! Just shut up! I am your husband, we  are a family, what’s yours is mine.

Rachel : Let me go or I will call the Cops

Mike (in a teasing manner): Let’s see you do that.

Mike chokes her.

Rachel falls on the floor. Dead.

Mike (In a disgusted way) Stupid woman, If you had just given me the money. You would still be alive.

Candice walks in

Candice : I’m sorry about Rachel. But you did the right thing.

Mike grabs the cheque off the table and leaves with Candice. .

Blog Redesign

According to Miller (2000), almost all sites are intended to act not as end-points of a search but as conduits directing the surfer along further links, which are constituted by the society and interests of the author, and so I added a few more links to the blog.

The links include my favourite movies and my favourite songs/bands/’artists. It is important for surfer to feel that he/she can relate to the blogger when they read blog posts. These links give the audience a sort of backstage pass into my life. If the surfer knows what the blogger likes/what kind of taste the blogger has, it will give them an idea of what kind of information that will be on the blog.

I have left everything else the same because I feel like the design of the blog is a reflection of who I am. The gray background shows that I am a fairly serious person, but the hints of red on the blog, also show that I am quirky, and I can be rather spontaneous.

I left the fonts the same color and size to make it very legible for bloggers. I also added a poll for surfers, this will give me feedback on what surfers want to see on the blog.


Tumblr’s Big Test: How to Make Money

I ran across this article today at http://www.theglobeandmail.com/globe-investor/investment-ideas/breaking-views/tumblrs-big-test-how-to-make-money/article2182157/

The article was discussing why Tumblr, as popular as it is, is generating very little revenue, and how that problem can be overcome. While I agree that Tumblr needs a source of revenue, I don’t necessarily think that having its users pay to get accessibility to all of the site is the way to move forward.  Social media like Facebook already have their users paying for “Facebook credits” in order to play certain games and use certain applications. This is facebook’s way of making revenue and maybe this is something that Tumblr can adapt. Certain features should be accessible only to paying customers.

Again, on Imdb.com, users are able to access movie detalis such as the title, cast or plot synopsis without paying, however in order to look up the contact information of a movie star or movie director, one has to pay. Maybe Tumblr should adapt a similar method, by allowing its users to upload pictures and movie for free, but having users pay to use a video from the website.

What do you think? How can Tumblr make money without losing users?

Hello world!

Welcome to The Venus Fly Trap!

The Venus Flytrap is a site to educate you on various aspects of the web/internet, and other topics I find fascinating.

Why the Venus Flytrap? The Venus Flytrap is a plant that lures insects and bugs to itself to feed on its body, only to suck life out and eventually kill the fly or bug. The same can be said for the internet, people browse the internet thinking they are acquiring information, however, the truth as playwright Richard Foreman says is that “we risk turning into pancake people, spread wide and thin as we connect with that vast network of information accessed by the mere touch of a button.” (Atlantic Magazine, 2008).

How is the website designed? I have used the “Times New Romans” font for all the text on the site, because it is simple and very legible, making it very easy to read.  I have also included a picture of the venus flytrap, to help viewers identify better with the site, as that is what the site is called. The site’s layout is a black and gray background. I chose that background because it’s not too dull and not too bright either – just the right amount of catchy! I have chosen to use wordress as the website hosting service because it’s very quick and easy to use in setting up a blog with various design options to select from.

The website’s layout was designed to reflect not just my belief on the internet but the contents of the website. More articles and related links will be posted as well as a link to my website. For more information of if you have further questions, Leave a comment at the end of any post, and I’ll be sure to get back to you!