The Importance of Entrepreneurship in Society

The provided essay discusses the importance of entrepreneurship in society and economy, outlining its various aspects and motivating factors. It identifies essential skills and characteristics for becoming a successful entrepreneur, drawing examples from notable entrepreneurs such as Mark Zuckerberg and Oprah Winfrey. The essay emphasizes that while education and family background are crucial, they do not always determine entrepreneurial success.

ENTREPRENEURSHIP AND SMALL BUSINESS
MANAGEMENT
1

Contents:
Introduction:...............................................................................................................................3
Part 1:.........................................................................................................................................4
P1: Different types of the entrepreneurial ventures and its relationship with the
entrepreneurship typology:.........................................................................................................4
P2: Explores the differences and similarities among the different types of ventures and
different sized ventures:.............................................................................................................9
P3: Interpret, assess and present the impact of the micro, as well as small businesses, have on
the economy:............................................................................................................................12
P4: Importance that small businesses and business start-ups on the development of the social
economy:..................................................................................................................................14
Part 2:.......................................................................................................................................16
P5: Determining the characteristics skills and traits of the successful entrepreneur with the
help of the example:.................................................................................................................16
P6: Assessment of how entrepreneurial personality reflects the mindset and motivation of the
entrepreneurs:...........................................................................................................................18
P7: Relationship among the past experiences and background of any person on the
entrepreneurship:......................................................................................................................19
Conclusions:.............................................................................................................................21
References:...............................................................................................................................22
2

Introduction:
The world economy is developing at a steady rate. There is always a demand for goods in the
market. The market is becoming large. With the developing economy and with the ever-
increasing needs of the customers, many individuals are taking up small businesses. This is
known as entrepreneurship. The individual takes up small businesses mainly to earn profits.
This entrepreneurship is becoming important. In the following essay, we see the various
kinds of entrepreneurial ventures and types of entrepreneurs. This essay brings out the
various aspects of entrepreneurship along with bringing out the characteristics required to be
a successful entrepreneur.
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Other
businesses
Small business
owners
Entrepreneurs
Entrepreneurial small
business owners
Part 1:
P1: Different types of the entrepreneurial ventures and its relationship with the
entrepreneurship typology:
Entrepreneurship is mainly defined as the way in which a person develops a small business to
earn profits by taking significant risks. As stated by Ibrahim (2014), it is where the person has
the objective and mindset to have a business of his own. He is ready to take risks and
challenges shortly and as such the risks small or large amounts of money with the goal to
earn maximum profit. Entrepreneurship helps businesses to grow. Entrepreneurship provides
the scope for small businesses men to earn profits as they take ventures. It also helps in the
overall growth of a person and makes the person responsible for doing any job. As opined by
DeNisi (2015),an entrepreneur is ready for any challenges which may arise in business. As
such entrepreneurial ventures are mainly categorised into three types- small profit ventures,
lifestyle ventures and high growth ventures.
Figure: Concept of Entrepreneurship Venture
(Source: Shaikh, 2016)
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Small profit ventures, as the name suggests are entrepreneurs who aim at small profits.
Usually, the businesses of this type are also small, and they concentrate on in gaining a little
amount. The company is often not very large, and the entrepreneurs are happy with only
small profit. Lifestyle ventures mainly aim at the personal growth of a person. As directed by
Campbell (2012),the sole authority is given to the owner, and the entrepreneurs mainly aim
for the development of a person so that a considerable amount of income can be earned.
Lifestyle venture helps in the grooming of a person. High growth ventures mainly involve
entrepreneurs who earn high amounts of money. They aim for the maximum growth of the
company and try to think of ways to maximise profits. They think of ideas for making their
company big and as such are ready to take any risks. Thus, these are the three types of
entrepreneurial ventures
There are various types into which the different types of entrepreneurs can be classified as:-
(A) Based on the type of business
This includes three categories: -
Trading Entrepreneurs - These entrepreneurs take up trading business. They sell finished
products to the customers.
Manufacturing Entrepreneurs - These entrepreneurs are engaged with manufacturing
items. They take care of the customers’ demands and produce goods based on that.
Agricultural Entrepreneurs - These entrepreneurs are engaged with agricultural products.
They manufacture and sell agricultural materials mainly to the farmers.
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Figure: Types of Entrepreneurs based on Business
(Source: Ward, 2014)
(B) Based on the use of technology there are two types of entrepreneurs -
Technical Entrepreneurs - These entrepreneurs are mainly engaged with the technical
staffs. They make the fullest use of the technology in their business and do most of the work
using technology.
Non-Technical Entrepreneurs - Non-technical entrepreneurs do not use much of the
technology. They are not very well versed with technologies and as such prefers to use
human resources instead of technology.
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Type of
Entrepreneurs
Trading
Entrepreneurs
Manufacturing
Entrepreneurs
Agricultural
Entrepreneurs

Figure: Types of Entrepreneurs based on Technology
(Source: Hilton, 2013)
3. Based on ownership, there are three types of entrepreneurs -
Private Entrepreneur- A private entrepreneur sets up business on his own through the
individual property.
State Entrepreneur- A state entrepreneur uses the property of the state to carry out the
business.
Joint Entrepreneur- Joint entrepreneur is a combination of both the private and state
entrepreneurs.
4. Based on Gender there are two types of Entrepreneur-
Men Entrepreneurs- Here the business is managed by men.
Women Entrepreneurs- Women take up entrepreneurship in this case
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Technical
Entrepreneur
s Non-Technical
Entrepreneurs

5. Based on the size of the enterprises it is classified into three types -
Small-scale entrepreneurs- Entrepreneurs who invest less than Rs 1 crore in business is
known as small entrepreneurs.
Medium-scale entrepreneurs- Entrepreneurs who invest between Rs. 1-5 crore is known as
medium-scale entrepreneurs.
Large-scale entrepreneurs – Entrepreneurs, who invest more than Rs. 5 crore is are known
as large-scale entrepreneurs.
So, the various types of entrepreneurs face different kinds of ventures. Some of the
entrepreneurs aim only for small profits which other aims for significant gains. Some
investment is meant for the grooming of a person. As such, the different types of
entrepreneurs can be associated with the different types of investments.
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P2: Explores the differences and similarities among the different types of ventures and
different sized ventures:
Different
attributes
Small Medium Macro
Decision
making
process
Owners take the
decisions
Some higher authorities
and the owner
collaborate to take
decisions
Owners takes all the
decisions
Managing
the
Organization
Owners are solely
responsible for
managing the company
Owners along with
some professionals
manages the business
Owners are solely
responsible for
managing the company
Customer
base
Localities Industry opening Local people
Processes
that are used
Informal processes Blend of formal as well
as informal processes
Informal processes
Planning of
the company
Short-term Long term, as well as
short-term planning
Short term planning
Personal
development
opportunities
Fewer opportunities are
rendered to facilitate
personal development
Personal development is
not possible among
most particular
professional
Very limited
opportunities for
personal development
Challenges
faced by
organizations
Attracting, retaining
and maximizing the
customer base is the
biggest challenges
Hiring large workforce
for productivity
enhancement along with
well is being of
Acquiring first funds
for getting things
started has been seen as
the most significant
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faced by small
business.
employees. hurdle coming in the
way.
Table 1: similarities and differences among the small, micro and medium-sized firm
(Source Farkas, 2015)
Different attributes Private venture Social ventures Public
undertakings
Value Corporate value Social value Social as well as
corporate value
Money sources Taking loans from
banks and issuing
debentures
Getting donations
from wealthy
foundations
Collecting money
from excise duty,
penalty, tax, etc
Profit distribution Distributed among
the investors or
shareholders
Shareholders and the
society gets
benefitted
Society and
shareholders both
are benefitted
Causes for strategy
development
Developing the
value of the market
share
Addressing the
social objectives are
the prima
Developing the
lifestyle of the
society
Main Aim Achieving huge
amount of profit
Delivering excellent
services to the
customers
Provision of the
more significant
amount of social
value
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Challenges faced Private
sectororganisation
mainly face
difficulties in
attaining the
tremendous amount
of benefit
Increasing their
income and raising
fund.
Providing adequate
services in the fiscal
downturn conditions
and effectively
manage the asset as
well as the
infrastructure of the
country
Table 1: similarities and differences among the small, micro and medium-sized firm
(Source:Eid, 2014)
The above explores the differences and similarities among the different types of ventures and
differently sized stakes.
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P3: Interpret, assess and present the impact of the micro, as well as small businesses,
have on the economy:
As per a report in House of Common, May 15, 33% of the people in the UK are employed by
SME, and it accounts for 19% of the turnover. Within SME there are different microbusiness
booming. As per Burns (2010), there are now 5 million of these businesses in the UK up from
3.5 million in 2000 and over 15 million in the world. SMEs in the UK provide almost half of
the job opportunities. Despite being deprived of multiple skills, administration, resources and
finance, SMEs have had a positive impact on development. SMEs and entrepreneurship have
helped eradicate poverty to a great extent. SMEs require capital, human resources, approach
and marketing strategy to be successful. Nowadays, it is widespread to sell the job and pay
for it, and SMEs are the ones most benefitted from it.
Job Creation: Various research and surveys have proved that micro and small business
create a lot of jobs. They provide a lot of job opportunities and tend to hire people who are
not very experienced or qualified, creating a massive opportunity for locals. Having less
complex allows direct involvement of managers and decision-makers in critical decisions.
GDP:Small and micro business make a significant impact because of the enormous number
and income provided in the form of wages and salaries paid to workers and distribution of
profit among the entrepreneurship.
Diversification, Linkages and Foreign Trade:
Big firms have a lot of people stagnant in their job, which is not the case with SMEs they
provide equal opportunities for all with discrimination leading to broad and diverse work
atmosphere.
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Figure: Total employment by the small and micro organisations
(Source: Businesscasestudies.co.uk, 2018)
Figure: Influence of the micro and small organisation
(Source: Businesscasestudies.co.uk, 2018)
These above graphs clearly state the importance of small and micro business in the economy
of UK. The first part shows the percentage share of different business in UK throughout
different years. The second part shows the percentage share of the total turnover of UK of
small, micro and big business. The last part of the image shows the percentage of job
opportunities created by the small, micro and big business.
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P4: Importance that small businesses and business start-ups on the development of the
social economy:
As opined by Kuratko (2016), small companies and business start-ups have developed to a
large extent in the recent decades. Many aspiring men and women take up a small business.
To gain popularity and have their name, they start their businesses. At first, they are not
recognised in the market due to a high level of existing competition, but slowly they get
accepted. Even at times, it becomes difficult for the businessmen to make people understand
their business and sell their products. Despite all these difficulties, small companies and start-
ups have helped in the development of social economy. The different importance of small
business and start-ups in the social economy are as follows: -
Competition- As small companies and start-ups have joined the market; the competition has
already been increased. As per directed by Paddock (2017),there is always an existing
competition between the large-scale economies and these small businesses. Every business
tries to establish themselves in the economy and to continue with the same brand name. To
maintain such standards all companies, compete highly in the market and with the growth of
small businesses, this has increased more.
Local Hiring - At the first place, the small businesses do not have a name. They do not have
a brand name as such, and most experienced people may not wish to work with them. This is
because the company is hardly recognised at that time. As such, the small businesses hire
local people for their business. This increases the hiring of local people. The local people get
a job and a mean of survival.
Diversity- The small business creates diversity in the workplace. There are people working in
the same company with different backgrounds. They come from different parts and have their
own culture and ways of living. As such they create a lot of diversity.
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Turnover- Small business and start-ups eventually help in the turnover. This is profitable for
the company in the first place, but from a broader point of view, the turnover helps the
economy at large (Duray, 2015).
Contributions- Small businesses and start-ups contribute to the economy. They help people
to get a source of income for living and the CSR activities taken up by the company, supports
the society. The company takes up various projects to develop its neighbouring areas and
develop.
Economic Growth- Small business and start-ups eventually help on the economic growth of
the nation. When a company develops, it not only improves its economy but it also helps the
economy at large.
Future Growth - People expect a lot of things from small businesses and start-ups. As such,
they also need to fulfil the expectations of the people to survive in the society. As such, there
is highly expected future growth from small businesses and start-ups.
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Part 2:
P5: Determining the characteristics skills and traits of the successful entrepreneur with
the help of the example:
To become a successful entrepreneur is not an easy job. Not all small business does succeed.
Sometimes somewhere anything might go wrong. To become a successful entrepreneur is
instead a tough task. As intended by Parker (2012),there are a lot of external factors which
helps a business to become successful. But more than the outside factors what is required
more is the will and determination of the entrepreneur. If the entrepreneur is confident in his
business and does not lose hope even after failures, his company is undoubtedly going to
succeed. To become a successful entrepreneur, various skills and traits are required by the
businessmen. Some of the characteristics can be mentioned as: -
Objectives/Goals- The businessman should know what the goals of his company are. He/she
must be very focused and sure of what are the purposes s of the company and what they aim
to achieve it. A proper inspiring goal is required which the businessmen should focus on.
Money-As opined by Schaper (2016),an entrepreneur should have enough money in the first
place to start the business. Then the entrepreneur should be capable of managing money. He
should be able to make proper use of money and distribute it in the rift order.
Passion- An entrepreneur should be passionate about the work he is doing and should be
doing it happily. If the entrepreneur has a passion for the business, he will surely be going to
succeed.
Motivation- The entrepreneurs should be motivated all the time. He should not be
demotivated when he incurs loss or during the time of crisis.
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Able to face risks- An entrepreneur should be ready to meet threats in the business. He must
not back off when he cannot withstand the dangers. He should always be prepared to face
risks at any point in time.
Positive Attitude- An entrepreneur should have a positive attitude towards the business. He
should always think about the company’s benefits and benefits of the workers and how that
can be improved.
Patience- As directed by Smith (2012), an entrepreneur should have patience and must not
lose his cool quickly. He should deal with crisis situations and employees very patiently. If he
loses his cool, it will create an adverse impact on the company's name.
Good knowledge about the product- The entrepreneur should have an excellent experience
about the product and should know every detail of the product and should be able to say
every aspect about it.
Leadership- This is the essential characteristic of a businessman. He should be an
outstanding leader for the employee and must be capable of managing all situations.
Excellent Public Relations Skills- An entrepreneur should have excellent public relations
skills so that it attracts a lot of employees, customers and the market and it becomes easy for
the company to sell its products (Businesscasestudies.co.uk, 2018).
Some of the skills are imbibed in the entrepreneurs. They inherit these skills from their
family. But most of the skills have to be developed in an individual to become a successful
entrepreneur. With time, the skills become better and proper, and it increases with time and
practice.
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P6: Assessment of how entrepreneurial personality reflects the mindset and motivation
of the entrepreneurs:
A person is not born as an entrepreneur. There are several factors which lead a person to
become an entrepreneur. Right from family, socialisation is essential for the proper
upbringing of the child. As such it develops a mentality amongst the children if they choose
to beam entrepreneur. Then there are relatives, extended family who also play a role in
creating a mindset. As opined by Buchholz (2016), finally, the culture and society upbringing
also help to motivate the entrepreneurs. As such, there are several factors which lead to the
motivation and setting the mindset of the entrepreneurs. The several factors can be classified
as: -
Family Upbringing- In the primary level of an individual comes the family. The family
helps in the socialisation and proper upbringing of a child. If the children an adequately y
socialised from childhood and are made to understand the benefits of business, then it creates
a mindset in the person to start up a business or to do something. The family continuously
keeps on supporting the entrepreneurs for their growth and prosperity.
Lifestyle - The lifestyle which a person follows a very important. The way they maintain
their lifestyle and thinks about it creates a particular mindset. This, in turn, motivates them to
become an entrepreneur.
Cultural differences- There are cultural differences which exist in a country like India. India
is so diverse and various cultures of people live here. As directed by Aguilar (2017),if a
person has a mindset that business will help to reduce the cultural differences, it motivates
them to work and become an entrepreneur.
Personal Motivation- A person may be motivated by himself/herself to start up a business
on their own. This may be in a person's mind over time or might come within a person with
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the occurrence of a particular incident. This might trigger them the need for a product, and if
they have the resources, they are motivated to start the business.
Motivation from successful entrepreneurs- An individual must also be motivated from
other entrepreneurs who have started up their businesses and are successful. This is an
excellent source of motivation as the life of others inspires the new individuals.
P7: Relationship among the past experiences and background of any person on the
entrepreneurship:
There is a significant relationship between the skills and knowledge of a person and
entrepreneurship. No one relationship can be talked about when we speak about experiences
and knowledge of a person. As stated by Paddock (2017),the family background influences to
a large extent for an individual to become a successful entrepreneur. It may not be necessary
that the family might come from a business family, but proper education and guidance will
help in becoming a successful entrepreneur. An example can have cited the famous
entrepreneur and philanthropist, Mark Zuckerberg, Chairman and chief executive officer of
Facebook. He is from a well-educated family where his father is a dentist, and his mother is a
psychiatrist. He received an excellent education which eventually helped in his development,
and he launched Facebook.
This is true that education and family background is essential in one's life to become a
successful entrepreneur. Though there are exceptions. Here we can take the example of
Oprah Winfrey. She is the daughter of an unmarried teen. She lived in extreme poverty and
was even made to work as a housemaid. Her family was so weak that children used to trade
her in school for not wearing proper clothes. She was also the victim of sexual abuse. Despite
all these experiences and the wrong family background which she had, she became a
successful entrepreneur and the richest African American. She now runs her show The Oprah
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Winfrey Show and is the model of inspiration for many. Thus, education and family
background do play a role but not always.
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Conclusions:
Thus, we see how this essay brings out the different aspects of entrepreneurship. It
understands what entrepreneurship is actually and why is it required in the economy. It
examines how entrepreneurship is useful for a society and economy to develop. There are
several motivating factors to become a successful entrepreneur. The essay looks at those
motivating factors as well. It also sees the various skills and characteristics required for
becoming a successful entrepreneur. Thus, the article brings out the various aspects of
entrepreneurship and small business management.
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References:
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Buchholz, R. (2016) Business and Entrepreneurship, 5th ed. Plymouth: Alta Mira Press, PP-
363
Businesscasestudies.co.uk, (2018) Business Entrepreneurship and Business Strategy|
Business Case Studies Available at:
http://businesscasestudies.co.uk/business-theory/operations.html [Accessed 26 May. 2018]
Duray, R. (2015) Business Entrepreneurship, operation strategy 3rd ed. New York: Oxford
University Press, pp- 529
Eid, R. (2014) Managing Staffs trust, satisfaction, and loyalty through information
communication technologies Hershey, PA: Information Science Reference, PP- 541-546
Farkas, V. (2015) Employee and Employer relations New York: Nova Science Publishers,
PP- 12-19
Harrington, H. (2016) Streamlined process improvement New York: McGraw-Hill. PP- 1028-
1059
Hellman, J. (2010) How firms and bureaucrats shape the Business Entrepreneurship
Hoboken: Wiley, PP- 548
Hilton, R (2013) Managerial accounting: creating value in a dynamic business environment,
1st ed. Bingley: Emerald Group Publishing Ltd, PP-545
Kaplan, R. (2011) “The Strategy-Focused Organization” The New Business
Entrepreneurship, 6(22), pp: 43(2)
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