Entrepreneurship and Small Business Management

This assignment requires students to analyze the role of entrepreneurship and small business management in supporting economic growth and job creation. It involves researching and discussing various factors that affect entrepreneurial intentions, such as mindset, opportunity perception, and social context. Students are also expected to examine the impact of COVID-19 on small businesses and explore strategies for supporting their development.

PEARSON REG. #
AYESHA ZEHRI
UNIT 09: ENTREPRENEURSHIP & SMALL
BUSINESS MANAGEMENT
Academic Year: 2019-2020
Unit Tutor:
Assignment Title: Venture types and impacts of small
business on economy
Issue Date:
Submitted on:
I SOLEMNLY DECLARE THAT THE WORK SUBMITTED FOR THIS ASSIGNMENT
IS MY OWN AND RESEARCH SOURCES ARE FULLY ACKNOWLEDGED
SIGN: TUTOR SIGN:
DATE: DATE:

Table of Contents
1. Entrepreneurship Concepts & Applications........................................................................1
1.1. Entrepreneurship............................................................................................................1
I. Entrepreneurial Activity................................................................................................1
II. Enterprise.....................................................................................................................2
III. Differentiate b/w:.........................................................................................................2
i. Serial Entrepreneur........................................................................................................2
ii. Intrapreneur....................................................................................................................2
iii. Owner-Manager..........................................................................................................2
IV. Type of Venture Chosen.............................................................................................3
1.2. Roles & Characteristics of Micro, Small & Medium-sized Organization in
Entrepreneurial Ventures.........................................................................................................3
1.2.1. Similarities & Differences b/w them to help implement my venture..................3
1.3. Growth & Lifestyle of Entrepreneurship in Public & Corporate Sectors.................4
1.4. Scope, Development & Growth of My Venture...........................................................4
2. Impact of Small Business on the Economy..........................................................................5
2.1. Analyzing Small Firms & Their Contribution to Social Economy............................5
2.1.1. Small Firms’ Types..................................................................................................5
2.1.2. Small Firms’ Contribution of Social Economy (at National, Regional & Local
Level) 5
I. Local/Regional Level of Economy.................................................................................6
II. National Economy.......................................................................................................6
III. International Level......................................................................................................6
2.1.3. Small Firms (Size, turnover, profit, growth, innovation, sustainability &
adaptability statistics)............................................................................................................6
2.1.4. Impact of Findings on selected venture/project report........................................7

2.2. Evaluating Small, Medium & Large Business in Economy........................................7
2.2.1. Differences of each in Economy based on Data & Statistics................................7
2.2.2. Impact of Local, Regional, National & International Startups in Different
Levels of Economy..................................................................................................................7
2.2.3. Impact of Findings on Selected Venture................................................................8
3. Key Aspects of Entrepreneurial Mindset.............................................................................9
3.1. Entrepreneurs & Small Business Owners....................................................................9
3.1.1. Can Entrepreneurs be Born or Made....................................................................9
3.1.2. Can Characteristics be Learnt & Adopted by Anyone......................................10
3.1.3. Types of Skills Representing & Differentiating Entrepreneurs from Managers
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I. Motivation......................................................................................................................11
II. Visionary....................................................................................................................11
III. Resourcefulness.........................................................................................................11
IV. Innovator....................................................................................................................11
3.2. Entrepreneurial Characteristics & Situational Factors............................................12
3.2.1. Entrepreneurial Characteristics in Personal Context........................................12
I. Opportunistic.................................................................................................................12
II. Innovation..................................................................................................................12
III. Doer.............................................................................................................................13
IV. Risk Taker..................................................................................................................13
4. Environments that Foster or Hinder Entrepreneurs........................................................14
4.1. Factors Influencing Choice of Starting up a Venture................................................14
I. Background....................................................................................................................14
II. Education...................................................................................................................14
III. Experience..................................................................................................................15

4.2. Risks, Rewards, Uncertainties & their Mitigation in Startups.................................15
4.2.1. Risks........................................................................................................................15
I. Work Timings................................................................................................................15
II. Schedule......................................................................................................................15
III. Market Environment................................................................................................16
IV. Managerial Limitations............................................................................................16
V. Financial Losses.............................................................................................................16
4.2.2. Rewards..................................................................................................................16
I. Growth Opportunities..................................................................................................16
II. Financial Success.......................................................................................................17
III. Structure.....................................................................................................................17
IV. Flexibility....................................................................................................................17
V. Customization................................................................................................................17
VI. Achievement...............................................................................................................17
4.2.3. Uncertainties in Startups......................................................................................18
I. Technological.................................................................................................................18
II. Political.......................................................................................................................18
III. Competition................................................................................................................18
IV. Consumer Dynamics.................................................................................................18
V. Resource Deficiency......................................................................................................18
4.2.4. Managing Uncertainties........................................................................................19
I. Simple Concept..............................................................................................................19
II. Testing........................................................................................................................19
III. Early Approach.........................................................................................................19
IV. Investment..................................................................................................................19

V. Cash Flow Management...............................................................................................20
VI. Analytical Capabilities..............................................................................................20
VII. Risk Management Plan.............................................................................................20
4.3. Positive & Negative Impact of Past Experience on Entrepreneurs..........................20
References.....................................................................................................................................22

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1. Entrepreneurship Concepts & Applications
The first section of this report has been divided in four parts. In the first part, we’ll discuss
entrepreneurship, entrepreneurial activity, enterprise and discuss differences between different
types of entrepreneurs. Next, we’ll discuss the roles and characteristics of micro, small and
medium sized organizations in entrepreneurial context followed by an insight into the growth
and lifestyle of entrepreneurship in both public and private sectors. Lastly we’ll discuss the
scope, development and growth of the chosen venture in light of market factors.
1.1. Entrepreneurship
The planning, designing and launch of a new business idea is entrepreneurship. The financial risk
associated with the business idea, the formation of the business including its structure,
operations, clientele and supply chain as well as different functional processes are a part of
entrepreneurship. There are various types of entrepreneurship that are based on the type and area
of the business idea. Similarly, entrepreneurs are also segregated into a various types depending
on their area of specialization and interest. We will discuss these different types of entrepreneurs,
the concept of enterprise and entrepreneurial activity as well as a chosen venture type in this
section.
I. Entrepreneurial Activity
The process of creating entrepreneurial opportunities as a product of the entrepreneurial ecology
is called entrepreneurial activity. Entrepreneurs undertake entrepreneurial activity to come up
with ideas and strategize them into practical solutions through innovation and transformation.
The outcome of entrepreneurial activity in shape of a new business venture adds value to a
fraction of the society and economy with innovation, growth and advancement as its main
outputs.
There is a clear difference between static management and entrepreneurial activity where the
former focuses on business context with impacts influenced from social, economic, political,
cultural and legal factors. There are no limitations to entrepreneurial activity in terms of new or
existing markets, market segments, products or services. Instead, the concept revolves around the
creation of new markets, market segments, products and services based purely on creativity,
innovation and transformation (Content et al., 2020).

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II. Enterprise
The term enterprise is a substitute for a profit making company however it is generally
associated with an entrepreneurial venture. The term is used for a new business that is an
outcome of entrepreneurial activity based on a new idea, product, service, market or innovation.
Most of the startup businesses are referred to as an enterprise that have been formed through an
initiative by undertaking considerable operational, financial, legal and investment risks.
III. Differentiate b/w:
We will now discuss the concepts of serial entrepreneurs, intraprenerus and owner-managers
individually and then summarize their differences to ultimately choose a venture type for our
idea.
i. Serial Entrepreneur
An individual that continuously comes up with new ideas and initiates new business ventures on
the basis of such ideas is called a serial entrepreneur (Morris et al., 2018). A very prominent
example would be that of Elon Musk who continuously explores new ideas and creates new
companies as we have seen in case of Tesla, SpaceX and Hyperloop. A serial entrepreneur as
against a conventional entrepreneur doesn’t stop at one idea or business and continuously strives
to brainstorm innovative ideas to create new products and services.
ii. Intrapreneur
An intrapreneur is basically an employee within a company tasked with the responsibility to
come up with new ideas for products, services and ventures, The intrapreneur also looks into
transformative innovation whereby striving to find new ways to enhance efficiency and optimize
existing processes and operation. The difference between intrapreneur and an entrepreneur is that
the former doesn’t have any risks and neither the opportunity to cash in those risks as an
entrepreneur however has all the resources and authority as their counterpart.
iii. Owner-Manager

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An individual who operates and owns a business is an owner-manager and is similar to an
entrepreneur of the new age where most of the entrepreneurs either manage company affairs or at
least one major function of the business such as technology or innovation. However the
difference lies between the goals of an owner-manager and an entrepreneur, where the former
establishes a business solely for personal goals, mostly livelihood and isn’t always associated
with innovation.
IV. Type of Venture Chosen
The type of venture for my idea would be small business entrepreneurship based on personal
financing, idea and vision. The venture will be based on creating a study abroad services
company aimed at maximizing the number of international students in Canada.
1.2. Roles & Characteristics of Micro, Small & Medium-sized Organization
in Entrepreneurial Ventures
The difference between micro, small and medium sized organizations is placed in the
formulation and operational structure. Typically a micro organization has less than 5 employees
and generally makes revenues lower than even small sized organizations. Generally such
ventures are focused on conventional ideas and existing business categories such as that in sole
proprietorship.
Small sized entrepreneurial ventures are businesses that are formulated from personal finances,
ideas and vision usually with the help of friends, family and peers. The businesses under this
category are also based on existing markets and services however in case of technology startups,
revenues can exceed but the scope of business remains small in size (Israr et al., 2020).
Medium sized organizations are properly structures and well planned companies with
considerable human, capital and operational resources at disposal. Unlike small sized firms, their
goal is not merely to make profit for survival rather they focus on a vision and grow towards
achieving them.
1.2.1. Similarities & Differences b/w them to help implement my venture

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The main difference between entrepreneurial ventures is based on their size and the purpose of
their formulation where micro and small business ventures are mostly focused on the sole idea of
making profit and operate in existing markets with conventional business ideas. Medium sized
firms are more likely to operate in new markets with new business ideas based on innovations.
This clarifies the fact that for a new business idea the venture should at least be a medium sized
firm or work its way towards it after its creation in order to operate at its potential.
1.3. Growth & Lifestyle of Entrepreneurship in Public & Corporate
Sectors
Entrepreneurship is not necessarily a term exclusively used in private sector but is usually
associated with it. The set of business activities and structure of entrepreneurial ventures of small
and medium size are generally placed in the private sector. However entrepreneurship has
emerged in the public sector over the past decades with the emergence of public sector
enterprises.
The growth and lifestyle in public and corporate sectors is similar as well as different in a
number of areas. The private sector is highly competitive and is inclined towards maximizing
profits and minimizing costs and expenses. The public sector entrepreneurship on the other hand
isn’t always in losses as is generally perceived to be however in terms of expenses and costs, it
certainly is. The corporate sector entrepreneurship is aimed at maximizing returns for investors
and stakeholders whereas public sector enterprises ensure the equal provision of benefits to all
the parties involved in the operations of entity (Ratten & Ferriera, 2017).
A major difference between the lifestyle of the two sectors in terms of entrepreneurship is the
fact that the employees and management of the private sector enterprise are highly aggressive
and competitive in maximizing output efficiencies of the organization as well that of the
workforce. While the public sector enterprises often lack in such competitiveness and also lacks
behind in taking as many risks as their private sector counterparts. The growth of public sector
ventures is almost guaranteed with direct backing from the state that provides considerable tax,
resourcing and support benefits whereas a private entity is solely responsible for all the risks on
its hence the growth and lifestyle differs greatly.
1.4. Scope, Development & Growth of My Venture

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The scope of my venture as indicated earlier will be based on the model of a medium sized
organization with a small initial startup. The scope, development and their major factors have
been discussed individually in this section. Study Guide plans to explore unconventional,
untapped and high potential destinations such as Italy, Japan, Romania, Turkey, Brazil,
Argentina, Greece, Spain etc. and form a network of offices and partners to promote
international education. This will not only enhance cultural exposure for our clients but also
allow us to leverage our proactive strategy to sign favorable deals with host institutions. Our
main objective is to create and explore an untapped market niche and attract at least 20-30%
share of existing market.
2. Impact of Small Business on the Economy
This section has been divided into two parts, the first subsection discusses the types of small
firms and their contribution to social economy at national, regional and local levels. The turnover
of small firms as well as the impact of finding of the first subsection on the chosen venture are
also discusses. The second subsection evaluates small, medium and large companies in the
economy where difference of each category have been discussed based on statistics and data.
The impact of local, regional and international startups at different levels of the economy have
been discussed in this section as well with a reference to the impact of such findings on chosen
venture.
2.1. Analyzing Small Firms & Their Contribution to Social Economy
In this sub-section of the report, we will discuss the types of small firms, their contribution to the
economy of United Kingdom as that is the location of our new venture (United Nations, 2020).
We will also discuss the financial indicators of such firms that impact on the continuity of such
businesses and in turn analyze the influence of these findings on our new venture.
2.1.1. Small Firms’ Types
There are four main types of small businesses in line with the generally accepted definition of
small firms. These types are:
I. Sole Proprietorship
II. Local Businesses

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III. Business Suppliers
IV. Innovation led businesses
2.1.2. Small Firms’ Contribution of Social Economy (at National, Regional & Local
Level)
The role of small firms is very important in the overall economy of UK with a huge impact on
different levels of the economy as well. The impact of small firms at local/regional, national,
international levels is given as:
I. Local/Regional Level of Economy
Small firms play a significant role at regional and local level of the economy in UK. These firms
establish new market as well as expand the existing markets that are not expandable by medium
or large firms. The small firms account for majority of the total businesses in the country as well
as around the globe. They also play a key role in creating new jobs and providing livelihood to
millions of people.
II. National Economy
The small firms contribute about half of the total economy of the United Kingdom. These firms
increase productivity as well GDP of the country. They create jobs at all levels of the economy
and also increase the number of suppliers in the market giving rise to competition and
competitive practices hence improving lives of customers. These firms also have a high rate of
growth and are also subject to private sector rebates that allow small firms to register higher
returns.
III. International Level
The real global GDP is made up of small firms in majority. These firms work closely with each
other as firms of the same category attract each other for partnerships as they understand and are
comfortable with the way deals are made and their subsequent terms and conditions as well. In
today’s world, small firms work virtually with freelancers from a number of countries, especially

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developing countries in wake of competitive pricing and help in the growth and development of
economies around the globe.
2.1.3. Small Firms (Size, turnover, profit, growth, innovation, sustainability &
adaptability statistics)
The total number of small firms in 2020 has been noted to be around 6 million in the United
Kingdom with 0 to 49 employees per firm. The small firms account for 99% of all the firms in
the country with a collective workforce of about 13 million and a cumulative turnover of 1.5
trillion pounds. The growth rate of small businesses has been noted at 72% for the past two
decades cumulatively and at an average of about 7% year on year. The majority of small firms
are based on sole proprietorship with a considerable percentage of small firms with no
employees. These firms are well placed with impressive figures in terms of profitability and
business continuity however only a small portion of these firms are innovation startups
accounting to less than 5%.
2.1.4. Impact of Findings on selected venture/project report
The findings from the details based on statistics and data of small firms present a favorable
outlook for a startup business. However small firms mostly account for sole proprietorship,
technical services and some in innovation but we’ll be able to ascertain the right category of
business formation with the findings from the next section that look over all firm types.
2.2. Evaluating Small, Medium & Large Business in Economy
This section looks at small, medium as well as large business in the economy of United Kingdom
((National Statistics, 2020)). We will discuss differences of each firm type based on economy
related data and statistics, the impact of these firm types on local, national and international
levels and the impact of these findings on the chosen venture.
2.2.1. Differences of each in Economy based on Data & Statistics
Small Firms have the majority share in total number of firms with a turnover of 1.3 trillion
pounds, employing 1.6 million people whereas medium sized firms employ 16 million
employees and have a turnover of 2.2 trillion pounds cumulatively. The small and medium sized

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firms account for 99.9% of all firms in the country with the total number of business standing at
6 million. Small and medium sized firms employ three fifths of the total employment in the
country and half of all the private companies’ turnover.
The business sector in UK is comprised of 3.5 million sole proprietorships, 2 million trading
companies and a little over 400,000 ordinary partnerships, accounting for 59%, 34% and 7%.
The growth for all business has been noted at 2% for the previous year. The average growth for
small, medium and large businesses in United Kingdom is more than 3% year on year.
2.2.2. Impact of Local, Regional, National & International Startups in Different Levels
of Economy
The impact of local, regional, national and international startups on the economy of UK can be
observed in terms of increasing economic activities in the country at local, regional and national
level as well as increasing net trade internationally. This not only strengthens the economy for
nationals but also creates opportunities for higher foreign exchange influx into the country.
Startups are engines of rapid growth that provide significant employment and income
opportunities across all levels of economy. Startups at international levels provide livelihood
opportunities to developing nations that provide competitive pricing of services in return for
income generation opportunities hence playing a part in poverty elevation and growth.
Startup businesses work in combination with all sorts of business and individuals, they actively
look for opportunities for growth and with each percentage increase they provide opportunities at
all levels of economy within a country and internationally.
2.2.3. Impact of Findings on Selected Venture
The impact of findings of evaluation of small, medium and large businesses at local, regional,
national and international levels of economy on the selected venture seem to be favorable. It is
noted that the new venture for creating and operating an education consultancy, the business
formation can be done under the SME policy of the country. There are a number of benefits of
SME where a startup can be initiated without an employee base during the formation phase. The
creation of business under such a setting allows for tax benefits before the company is able to
make profits beyond the value added tax threshold that normally medium or large firms are
subject to, having revenues of more than 85,000 pounds a year. Further, there are high chances of

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growth and expansion in light of public sector support for such businesses that not only add
value to existing economy within the country or at international level but also provide
employment opportunities to UK nationals. Therefore, it is now clear and prudent to form the
new venture under small firm’s policy and initiate services and avail all the benefits provided by
the UK government.
3. Key Aspects of Entrepreneurial Mindset
The mindset of innovators and creators is different from that of ordinary business owners and
managers. Entrepreneurs are driven by innovation and creativity, they focus on bringing
solutions as well as providing relief to the society through painkillers within the reach of as many
people as possible. In this section, we will discuss the different aspects of entrepreneurs, their
characteristics, motivations and the way they differ from owners and managers.
3.1. Entrepreneurs & Small Business Owners
This section has been divided into three section where the first section looks at whether
entrepreneurs are born or made while the second section determines if the characteristics of
entrepreneurs can be learnt or adopt whereas the last section discusses the skills representing and
differentiating entrepreneurs from managers.
3.1.1. Can Entrepreneurs be Born or Made
There has been a great debate on and off about whether if entrepreneurs are born or made. The
fact is that a person can be made into an entrepreneur or an innovator with the right set of skills
and most importantly with passion and vision to see themselves at a position of making change

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the way they want to. Entrepreneurs are born and made, they learn and adopt the skills as they
grow up however they have the vision and dream for themselves as well as for what they want to
do and achieve once they have the opportunity to, since the very beginning. They are highly
motivated and focused individuals who plan their lives from the early years and know when they
have learnt experiences as well as enough skills to initiate their first entrepreneurial venture. A
business mind must not be confused with an entrepreneur, the former doesn’t necessarily bring
about any change except for offering options and working their way up for better returns, an
entrepreneur doesn’t really think about returns and profits until a very later stage, they focus on
the change they want to bring in to the society through innovation and creativity. Entrepreneurs
know the risks and uncertainties and unlike businessmen they go beyond the senses of a business
owner or manager and put in everything they have because they are self-motivated and confident
in the vision they have. Precisely, entrepreneurs learn necessary skills and adopt certain traits to
be able to initiate their venture and work towards achieving their vision (Kumari, 2018).
3.1.2. Can Characteristics be Learnt & Adopted by Anyone
The debate, following the origins of entrepreneurs, is whether if characteristics can be learnt and
adopted by anyone. The short answer is yes, characteristics can be learnt and adopted by anyone
but that will not necessarily make them an ideal entrepreneur. Entrepreneurs learn skills and
adopt traits over the course of their life as they create new products and services. Similarly
anyone can learn these skills and adopt similar habits and traits that ideal entrepreneurs do.
However doing so will not guarantee their success mainly due to the fact that the major
difference between entrepreneurs and non-entrepreneurs is the vision they have since the very
beginning. Entrepreneurs are very clear on what they want to achieve and envision themselves at
a destination they have visualized for themselves they then make a personal plan and adopt
necessary skills, traits and experiences that enable them to pursue their vision (Mullins, 2017).
Any common individual can learn the same way as entrepreneurs do but simply copying them
will not help as an entrepreneur learnt and adopted abilities and talents according to the need of
their plan, without a plan i.e. without the change, innovation or creativity, learning skills is
useless.
Therefore the important aspect is innovation and creativity and yes they can be learnt too
however the more important part in this entire debate should be the ability to envision an idea, a

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destination, change and above all the goal one wants to achieve. Once an individual has concrete
motivation and passion for working their way towards that dream, everything will start making
sense; that individual will start learning skills, abilities, experiences, competencies and traits that
will enable them to be able to initiate their venture and work towards achieving the ultimate goal
they’ve set.
3.1.3. Types of Skills Representing & Differentiating Entrepreneurs from Managers
There are a number of areas where entrepreneurs certainly have an edge over conventional
managers. The skills and traits both possess can be similar but it is more about the way
entrepreneurs use skills, the inspiration they have and above all the vision they carry that makes
sense towards utilization of all available resources, skills and traits including learning new
proficiencies and sourcing new resources. The process of running business can be easy however
the process of initiating a new venture, managing its risks and ensuring returns in prescribed time
is a complex set of tasks. Moreover, the creation of a unique idea that is based on creativity and
innovation, its planning, implementation and continuity is another domain where entrepreneurs
have an edge over managers (Neill et al., 2017). Let us now look at some of the most distinct
skills and characteristics that differentiate an entrepreneur from a manager.
I. Motivation
Entrepreneurs are self-starters and are personally motivated to achieve greatness that makes them
successful. This aspect of their personality enables them to make their way through tough times
in business that every new venture faces while trying to survive, build clientele and create a
niche for their innovative services and products. It is not just the creation of services and
products but also the convincing that entrepreneurs have to do while pitching their products to
general audiences as change is never easy to enforce or adopt.
II. Visionary
Entrepreneurs are by nature very visionary and find opportunities within situations that managers
usually find challenging. Entrepreneurs are popular for their belief in “every challenge is an
opportunity” with which they identify and quickly seize new opportunities.

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III. Resourcefulness
One of the major success factors for entrepreneurs is their ability to find solutions, they do so by
finding possibilities within any situation. Entrepreneurs plan things and approach them in a way
where every opportunity is achievable with the right set of tools and resources therefore they
plan and strategize according to this philosophy that enables them to succeed in situation where
managers normally would fail.
IV. Innovator
The goal of improving is not just as exciting as innovation, entrepreneurs believe in innovation
inspired by creativity. Entrepreneurs are one of the best presenters in across any profession and
discipline they highly believe in the way a product or service is presented rather the product or
service itself. This belief is not taken in literal meaning however in terms of innovation where a
product is designed and produced for the correct set of marketing strategy to be placed in the
right segment for the right people.
3.2. Entrepreneurial Characteristics & Situational Factors
This section of the report discusses different personal characteristics of entrepreneurs that drive
them towards success and achieving their set vision. We will also discuss the example of
entrepreneur in light of personal drivers that led them to success and related with them in
personal context.
3.2.1. Entrepreneurial Characteristics in Personal Context
The entrepreneurial characteristics in personal context are the main drivers & motivational
factors towards envisioning, initiating and growing a venture towards success (Vuong et al.,
2020). The characteristics of entrepreneurs that lead them towards everlasting passion and
inspiration towards achieving the success of their idea and realizing their goals are all based on
personal vision and motivation. Some of the characteristics of entrepreneurs in perspective to my
personal context are described below.
I. Opportunistic

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Entrepreneurs are opportunistic and find opportunities in shape of new ideas and ventures in
order to solve issues or to completely change the dynamics of the market. The first ever
touchscreen phone was made by IBM in 1992 however it wasn’t until Steve Jobs presented the
iPhone that the market completely shifted from Symbian to smart phones. This example is highly
relevant to my personal context in a way that rightly presenting product or services matters the
most.
II. Innovation
One of the most influential innovations of the modern era is the emergence of social media that
has completely reshaped lives all over the globe. There were famous website applications like
Yahoo, MSN Messenger and MySpace before Facebook however the entire mode of life changed
with Facebook. The story of Mark Zuckerberg inspires and related to my personal context in a
way that as long as the idea is strong and efforts are concrete, no matter how big the opportunity
is, it can all be achieved in time.
III. Doer
One of the most important aspects of entrepreneurship is the ability to do things rather than just
thinking about them. Elon Musk has been one of the most inspiring figures, the entrepreneur
took impossible ideas and shaped them into realities. Whether it’s about mass production of
electronic vehicles that seemed impossible before he started it, or making reusable rockets with
guided reentry and docking. This related to my personal context that despite of personal or
business issues, one must go on and keep making way forward, one step at a time.
IV. Risk Taker
If we look at the way Elon Musk has achieved the success of his ideas, he didn’t let any
insecurities or issues hold him back, the inventor kept going on in spite of huge risks that might
have led to the bankruptcy of his company and personal assets. He kept managing and explaining
to his investors and stakeholders about the progress and bargained for time and resources that

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motivates me to form skills that organize initiatives in a way that no matter how adverse the
conditions, even incomplete results would speak for themselves just like in case of Elon Musk.
4. Environments that Foster or Hinder Entrepreneurs
We will discuss the factors, influences and negative influence on the choice of startup a venture.
The first section will discuss influencing factors on a startup venture, later sections will discuss
risk, rewards and various uncertainties with steps for mitigating them along with an evaluation of
past experiences influencing personality negatively and positively.
4.1. Factors Influencing Choice of Starting up a Venture
The factors that influence choice of starting up a business are primarily based on personal
inspirations. The way a person is brought up, their surroundings, their culture, their living
conditions, the deprivations, hardships or the affluences in one’s life motivate and shape the
inspiration towards taking an initiative for a startup business (Meoli et al., 2020).
In this section of the report, we will discuss various factors that influence the choice of starting
up a venture based on personal background, education, culture, economic environment and

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personal characteristics. There are numerous skills, traits and motivational drivers that shape the
characteristics of an entrepreneur to achieve the organizational goals for a startup business.
I. Background
It isn’t just inspiration or motivation but the sense of approaching issues, problems and
challenges as workable opportunities. Individuals who think out of box find solutions through
innovation and prompt a startup. Lee Byung Chul was the founder of Samsung, he belonged to a
very humble background and yet started a company that now leads high-tech equipment
manufacturing.
II. Education
The role of education is not only important in learning and understanding technical skills and
expertise but also the environment of education provides exposure in terms of cultural diversity,
ideas and knowledge sharing. Mark Zuckerberg wanted to connect students and so came up with
the idea of Facebook, this was all due to the ideas he received during his education at Harvard
and was influenced by his surroundings to start it.
III. Experience
The experiences of life and the way we get firsthand knowledge of events and getting through
situations plays a crucial role in forming our personality, mindset and our characteristics.
Experience allows us to learn and come up with ideas to help others as well as to do things in a
better manner. For entrepreneurs, experiences teaches them ways to
4.2. Risks, Rewards, Uncertainties & their Mitigation in Startups
There are various risks and rewards associated with a startup business that influence an
entrepreneur’s mindset and approach to pursue an initiative (Sahoo, 2020).
4.2.1. Risks
Let us look at some of the most common and most influential risks in a startup.

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I. Work Timings
There is a difference between an employee and an owner especially if they are an entrepreneur,
they have more risk invested than their employees. An entrepreneur is passionate and inspired to
succeed in their initiative and therefore has to put in their 100% effort to ensure that all sides are
covered and enough support is provided to employees as well as processes in the beginning in
order to strengthen the foundations of the initiative. A new business owner must expect and put
in long hours more than any employee would or could. It is the personal association with the
business that pushes the owner to work out of the 9 to 5 routine.
II. Schedule
We discussed long hours in the previous part but that is not all, work and task schedule are also
unpredictable and uncontrollable. Since everything is in its inception phase, things do not go
according to set plans or expectations hence a business owner must be mentally and otherwise be
prepared for hectic work schedules in order to avail as many opportunities as possible. This
would often mean that they would have to cease personal life and relationships in order to
succeed.
III. Market Environment
It is highly possible that market dynamic and environment might change rapidly right after the
startup has been formed and work has initiated. The market shifts can have hugely negative
impact on the potential of the business and may therefore result in failure or closure of the
startup altogether. Therefore embedding due diligence within the processes and operations of the
startup is very necessary in order to be able to prepare for any uncertain market changes in
advance.
IV. Managerial Limitations
The lack of managerial experience at the owner’s end is one risk that must be taken into account
while planning to start up a business. The hiring of experienced managers or employees will not

17
just make up for the lack of same skills in the owner. The owner must have skills to manage,
oversee and make decisions one of which will be to oversee the performance of the managers
and whether if they are working in the right direction aimed at succeeding in the startup business.
V. Financial Losses
The startup business is planned according to the expected schedule of events on a fixed budget
with carefully crafted financial management. However there are financial losses and risks
because nothing is certain and plans never go according to expectation especially in a startup as
managing the business and founding a business are two very different scenarios.
4.2.2. Rewards
The most inspiring rewards that must be considered when initiating a startup business are listed
below.
I. Growth Opportunities
The nature and approach of entrepreneurs stimulates them to look at every challenge as an
opportunity and to find ways to cash them. Every issue or challenge is in turn a growth
opportunity that can be worked on with the right strategy to find a competitive edge and add
value to existing line of services and competencies. Secondly, performing tasks on a regular
basis as an entrepreneur allows the startup owner to not only manage challenges but become
proficient for growth with it.
II. Financial Success
The financial potential of any business is lucrative and it is one of the most inspiring drivers for
any entrepreneur. Some entrepreneurs do not value finances but know that they are crucial for
the success and continuity of the business, some take it as an accomplishment but in any case
financial success of a business is a major reward that cannot be achieved while working on a job.
III. Structure

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The structure of a startup business is small and not as complex as seen in medium or large scale
organizations. Further an entrepreneur initiating their own business is able to structure and assign
roles and responsibilities the way they see it in line with their goals and objectives.
IV. Flexibility
The beginning phase of a startup businesses does not survive on the typical 9 to 5 routine and
requires many more hours especially by the entrepreneur to keep things smooth and in the right
direction. However that does not also mean that they have to work right according to usual
working hours and there is a room for flexibility where they can move working hours in case of
other commitments.
V. Customization
One of the very reasons, highly creative and innovative people choose to start their own business
is based on creative difference. Starting a business allows the entrepreneur to determine and
decide the direction of the business as well as its innovation function.
VI. Achievement
While working in companies, no matter how important the role or how big the responsibility, the
achievement is widely unknown to the public unless it is someone like Steve Jobs, even who had
to wait for the next 10 to 15 years to be known for his innovation to the general public. One of
the major rewards for starting a business is owning its success and achievements more than
anything else.
4.2.3. Uncertainties in Startups
There are a number of highly influential uncertainties in a startup business, these uncertainties
can naturally arise with shifts in social, economic, technological or any other perspective and
cannot be predicted by even the most experienced and capable owners or managers. The major
uncertainties facing a business are:
I. Technological

19
There can be immense technological shifts or changes in the market thereby completely
transforming the face of the industry as we witnessed in case of smartphones that ultimately led
to the complete failure of mobile manufacturing giant Nokia as it failed to identify and adapt to
it.
II. Political
The changes in political dynamics can pose threats for any business in any given industry
especially if the shift is in a completely different direction. For example the recent US election
win by Joe Biden will put a lot of pressure on carbon producing and consuming companies that
relied on policies by Donald Trump.
III. Competition
If the face of competition in any industry changes or suddenly a competitor comes up with a
product or campaign that largely undermines startups businesses or any competitors that can
have very adverse effects on the business as well.
IV. Consumer Dynamics
If customers prefer products of a company or suddenly stop using products from a certain source,
that will most certainly have huge economic impact such as the banning of French brands by
Muslim consumers around the world that has incurred billions of dollars of losses to French
brands.
V. Resource Deficiency
The business may start with a good initiation however in the beginning, nothing is certain and
therefore things start going south as issues start emerging. The resources in the initial phase are
planned according to the business plan however as soon as issues start arising, resource
deficiency starts as additional resources are required to manage issues and uncertainties.
4.2.4. Managing Uncertainties

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There are many other factors apart from the ones we have just discussed that influence the
success and continuity of a startup business. Let us now look at some measures to mitigate these
issues.
I. Simple Concept
The startup business concept should be simple and clear with minimal complexity in structure,
services and processes. Even if the industry or competitors work in complex structures or offer a
set of complex services, the startup should start off with simple services in order to keep it
simple and convenient to manage and minimize risks associated with complex structures.
II. Testing
In today’s world, testing everything before it is launched or offered is very important. This is the
very reasons why especially entrepreneurs believe and have created the MVP term i.e. minimum
viable prototype that is tested and working before it is presented to investors, partners or
customers. The startup businesses should test its services, processes and management procedures
in order to strengthen its chances of surviving and succeeding.
III. Early Approach
The risks associated with startup businesses can be minimized by offering products and services
as soon as the company is ready to service clients. Unlike a conventional business, a startup must
seize early customers that adopt the products and services even with a number of business
aspects still under formation.
IV. Investment
The startup business can be setup by personal funds and assistance from peers, friends and
family, however it is best to seek investment from investment banks, lenders or investors when
the business is ready for rapid growth and needs funds that can not to be sourced from existing
cash flows.
V. Cash Flow Management

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One of the most important aspects of managing risks and uncertainties is to save as much cash as
possible. An efficient cash flow management can assist in turning fixed costs in variable costs
and also by playing short term to save financial resources.
VI. Analytical Capabilities
The capability to analyze and assess risks and uncertainties in a given situation can greatly
dictate the outcome of the startup itself. The entrepreneur must develop skills and knowledge or
must possess them to analyze the market and the dynamic of the business to ascertain risks and
uncertainties facing the future of the business. The ability to analyze and assess the scope and
magnitude of risks and uncertainties alone determines half of the capacity of the business to
manage them as it also includes the critical thinking of tools and sources to mitigate them.
VII. Risk Management Plan
Anyone can create an impressive business, project and financial sourcing and management plan
however, entrepreneurs are well versed and aware of risks and uncertainties surrounding startups
and therefore always prepare for a risk management plan that allows them to prepare for issues
and challenges. Unlike business managers who prefer contingency planning, entrepreneurs
choose risk management plan as running from a situation is not an option especially in a startup
that has a limited amount of resources and service lines.
4.3. Positive & Negative Impact of Past Experience on Entrepreneurs
The value of experience is often rated above the value of skills, knowledge and talents. There are
many examples of individuals who have succeeded without any formal knowledge or skills
learning exercise and likewise there are many examples where highly knowledgeable individuals
with high skillsets and talents have failed miserably while pursuing an entrepreneurial venture.
A number of startups fail due to the lack of experience of the entrepreneur in handling and
managing, risks, challenges and uncertainties. Experience teaches entrepreneurs the importance
of uncertainties and risks and therefore enables them to be prepared for them and always focus
more on risk management than any other aspect of the business themselves where managers and
employees can take care of other functions of the business and its formation (Wiklund et al.,
2019).

22
Entrepreneurs with either positive or negative experience are by nature entrepreneurs and strive
to initiate business, services or create products that add value in small or large scope. These
experiences allow entrepreneur to explore any given opportunity with the past experience. If the
experience has been negative, they will be a little cautious and careful and focus on risk
assessment and management before starting up a business. Whereas an individual with a positive
past experience will be confident and will know how to deal with uncertainties as they did
previously and jump straight into the business as soon as requirements are met.
Positive experience also teach us as entrepreneurs to have faith and trust the team that works
with us as employees, associates and partners. Human capital is an important part of any
business initiative especially in case of an innovative venture. The impact of positive past
experience with the same team allows for greater levels of confidence when an entrepreneur
pursues a new project or initiative. Whereas a negative experience damages the relationship
between the entrepreneur and their team and hence results in either the replacement of the team
or unreliability.
The experience of an initiative or a market segment or region also plays a part in motivating the
pursuance of an idea or initiative in the relevant economy. The impact of negative experience not
only demotivates the respective entrepreneur but also raises concerns for other entrepreneurs
willing to initiative and pursue similar objectives in the said market. However for some
entrepreneurs that might be an opportunity given that they understand the market in a different
way and learn from the issues as well as mistakes made by prior counterparts. A positive
experience in turn motivates an entrepreneur to initiate ideas and projects that they might not be
willing to pursue earlier. This occurs when the entrepreneur feels confident after the positive
experience and trust the market and consumers to support a project launched by the same
entrepreneur or the entire team.
The impact of positive and negative experience plays a crucial part in forming the cognitive
dynamics between entrepreneurs and relevant markets. However in some cases entrepreneurs
take on the responsibility and keep learning such as in case of Jack Ma who kept pursuing new
initiatives until Alibaba became a success, much accredited to the fact that the founder took on
the responsibility of the losses and never blamed any other factor and learnt throughout the
course of his initiatives.

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