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Definition and Types of Small Businesses

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The assignment provided is a detailed analysis of small businesses, covering their definition, types (e.g., sole proprietorships, partnerships, corporations), and characteristics. It also delves into the differences between small, medium, and large enterprises, using various sources such as OECD publications, academic articles, and online resources. The document aims to provide a thorough understanding of small businesses, including their importance in the economy, social entrepreneurship, and public sector activities.

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1
ASSIGNMENT 1 FRONT SHEET
Qualification BTEC Level 4 HND Diploma in Business
Unit number and title Unit 9: Entrepreneurship and Small Business Management
Submission date 2/6/2019 Date received (1st submission) 2/6/2019
Re-submission date Date received (2nd submission)
Student name Nguyen Minh Ngoc Student ID GBD17285
Class GBD0821 Assessor name Nguyen Minh Hai
Student declaration
I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that
making a false declaration is a form of malpractice.
Student’s signature:
Grading grid
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Summative Feedbacks: Resubmission Feedbacks:
Grade: Assessor Signature: Date:
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Signature & Date:

3
Table of Contents
I. Introduction. ................................................................................................................................................... 4
II. Methodology. .................................................................................................................................................. 4
III. Analysis. ...................................................................................................................................................... 4
1. Explore and illustrate the range of different entrepreneurship ventures. ......................................................... 4
a. Types of entrepreneurial ventures and their relation to the typology of entrepreneurship. ............................. 4
b. The similarities and differences between entrepreneurial ventures. ................................................................ 7
c. Entrepreneurship in the public and corporate sector. ...................................................................................... 9
2. Evaluate the impact and importance of small businesses on the economy..................................................... 10
a. The impact of small businesses on the economy. ........................................................................................... 10
b. The importance of small businesses and business start-ups to the growth of the social economy. ................. 11
c. The differences small, medium and large enterprises make to the economy. ................................................ 14
VI. Conclusion. ................................................................................................................................................ 15
V. References .................................................................................................................................................... 16

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I. Introduction.
In a country, the economy is a combination of large, small and medium businesses. Most large
businesses grow from small and medium businesses. It is divided into different categories such as
small business, scalable start-ups, high growth firm and social enterprise. Businesses have
different sizes and types of businesses with the common purpose of making profits and meeting
social needs. This contributes to the development of the national economy in general and each
region in particular.
II. Methodology.
In this report uses information from websites, journals articles to give the information about 4
types of entrepreneurial from private to public. As some examples in this report for small
business is Danang Souvenirs & Cafe, scalable startup is Tiki, high growth firms is PG Tanker, and
social enterprises is ME to WE.
III. Analysis.
1. Explore and illustrate the range of different entrepreneurship ventures.
a. Types of entrepreneurial ventures and their relation to the typology of entrepreneurship.
Four types of entrepreneurial ventures.
• Small business.
There are different definitions of small businesses depends on the kind of industry. In 2006,
the UK Companies Act states that small businesses as one that has fewer than 50 employees
with an annual turnover of less than £ 6.5 million, a balance sheet total cost of above £3.26
million and the scale of operations is limited. It is run by owners who are family members or
partners who are friends and offers innovative products or services
(towergateinsurance.co.uk, n.d.).
Example: Danang Souvenirs & Cafe are businesses which specialize in gift & souvenirs about Da
Nang city in Da Nang. The company was established by founder Bui Duc Tuan since 2012 at 34
Bach Dang Street. It is a rest-stop place for both foreign and domestic tourists to relax while
staying at Da Nang. The goal is to introduce local characteristics by the souvenir collections

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exclusively designed, promote entrepreneurship young generations inspirations. This company
is a small business because it has less than 50 employees and the operation is limited in size.
• Scalable startup.
A scalable startup refers to businesses that search for a repeatable and scalable business
model with the intent to make a profit and become a large, disruptive company base on an
innovative idea (steveblank, 2010).
Example: Tiki is a company which was established since 2010. In the beginning, Tran Ngoc Thai
Son, the company’s founder followed the E-commerce trend at that time and sold only English
books. Tiki has built software-based and internet-based business systems with data mining.
Based on the theory above, until now, the company has developed and expanded worldwide
up to 26 sectors of products. Base on customers’ demands, nowadays, Tiki is the most popular,
trusted website with high reputation and various products. Tiki has proven that Tiki is one of
the scalable start-up entrepreneurships.
• High growth firms.
A high-growth firm which is a company has a faster turnover than its peers or the large
economy. In the company, there are more than ten employees and the average annual growth
rate of more than 20% per year for three consecutive years (OECD, 2016). For a long time,
these companies often increase annual revenue more than the industry average without hard-
and-fast rules of defining growth (CHEN, 2018).
Example: Petrolimex Waterway Transport Corporation (PG Tanker) which is a state-owned
enterprise under the Ministry of Transport, has established since 2013 (Hai, 2016). PG Tanker
operates in petroleum transport industry by the river, sea and ocean; maritime service; repair
and build a new waterway transport. It which owns the largest fleet of the petroleum tankers
in Vietnam achieved international standards. In 2019, TRACODI entered the top 10 fastest
growing enterprises in Vietnam in the FAST500 ranking - built on the results of independent
research and evaluation of Vietnam Report (fast500.vn, 2019). The company growth rate since
early 2016 increased rapidly by 32,8% about revenue and profit with net revenue reached VND

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3,167 billion and profit before tax reached about VND 320 billion (Thao, 2019). This proves
that PG Tanker is one of the high grow firm in Viet Nam.
• Social enterprise.
A social enterprise is a commercial organization which trade in order to solve social problems.
It has specific social goals for promoting, encouraging and bringing a positive change in society.
The profits are mainly used to fund social programs and create the values of public services
(BARONE, 2019).
Example: ME to WE is a social organization which is established by Craig Kielburger & Marc
Kielburger. The organization has been running for more than 10 years. ME to WE provide two
levels of benefits that create jobs for more than 2,000 people in the WE Village community
worldwide and donate a minimum of 50 per cent of its profits annually to WE Charity. From
2009 until now, ME to WE has donated $ 20 million in cash and compensation for in-kind
donations to WE Charity (metowe, 2019). This organization operates based on market
research and analysis of social enterprises to have the best activities of social enterprises. This
point proves that ME TO WE is the most successful social company in worldwide.
The relation to the typology of entrepreneurship: Lifestyle and growth firms.
• Lifestyle firm.
Lifestyle firm is a kind of enough income company which has established a base on the owner's
passion, experience a certain lifestyle and not the sole purpose of making a profit (Putranto,
2013).
Example: ME TO WE was established with the purpose to change the world in a positive way
and helping the community grow together. The business has promoted the economic power of
each community by creating jobs for more than 1500 women in Kenya and Ecuador, providing
the value of products to customers, contributing to sustainable development projects.
Through charity trips that bring a lot of experience as well as contribute to the personal
development of volunteers. ME TO WE is a sustainable social enterprise, has a great influence
on customers, based on the owner's passion, as well as not the sole purpose of making a

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profit. At age 12, Craig Kielburger was inspired to become an advocate for ending child labor
and now ME TO WE has succeeded in fulfilling Craig Kielburger's goal and passion for social
help.
• Growth firms.
A growth firm is an enterprise with higher revenue, profit margins and growth rate than other
similar companies in the market (CHEN, 2018).
PG Tanker has owned many subsidiaries with 40 years of experience in domestic and
international shipping. Currently, PG Tanker owns the largest tanker fleet in Vietnam and
supplies nearly 47% of total domestic consumption that surpasses the competition of Vinalines
Shipping Company (VLC) and Vinalines Container Shipping Company (VCSC). Through this data,
PG Tanker has grown very recently and has become a growth company in the economy
(Securities, 2015). With these data, PG Tanker has developed strongly recently and has
become a growth company in the economy.
b. The similarities and differences between entrepreneurial ventures.
• The similarities
- Firstly, entrepreneurial ventures create higher value and profit through
entrepreneurship. For example, Danang Souvenirs & Cafe has sales from each of their
projects and products, Tiki makes money through sale online, PG Tanker has revenues
from their products and inventions and ME TO WE is the revenue from sale product
and donate through social activities.
- Secondly, the rapid development of the industrial revolution 4.0, entrepreneurial
ventures have exploited the opportunity to accumulate data. Thereby businesses can
capture the needs of consumers to act quickly and flexibly in a competitive
environment.
- Thirdly, entrepreneurial ventures must accept and control risks throughout the
operations and learn from the failures to supplement the knowledge of the market.
- Finally, entrepreneurial ventures solve employment problems, contribute to improving
personal life for society.

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• The differences
Small business Scalable startup High growth firms Social enterprise
Purpose.
Small business does not
have structured goals
and general purpose is
to make a profit.
Initially, a scalable
startup' s the
purpose of making
a profit by
innovative products
and furthermore
want to expand the
market become
large enterprises.
High growth firms'
s general purpose
that makes a huge
profit, besides,
wants to expand its
scale and dominate
businesses in the
same industry.
Social enterprises
are created for the
purpose of solving
social problems
through social
programs.
Business size and
scope.
from 10 to 50
employees and the
operation is limited in
size. Owned by one
entrepreneur.
Similar to small
businesses but the
structure and size
can be expanded.
depending on
financial condition
of the company can
expand more than
1000 employees.
Business size is
based on the
influence on society.
Impacts.
Produce jobs, taxes. Produce jobs,
taxes, innovative
products and
services.
Impact to
nationwide or
worldwide
economy.
Impacts to society
Business ownership
objective.
Private limited company
Limited liability
Sole proprietorship and
partnership
Public limited company
Co-founders,
engineers, software
developers,
investors
Enterprise or
shareholders
Individual or
enterprise.

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- The size of businesses varies, depending on the business model and financial condition of the
company. For example, Danang Souvenirs & Cafe is just model under 50 employees, Tiki only
operates based on online under 250 employees, PG Tanker is a large corporation with thousands
of employees, ME TO WE which is a community has a significant source of revenue to provide
for charity programs.
c. Entrepreneurship in the public and corporate sector.
➢ In corporate sector: Corporate sector is one of the largest sectors of any economy. This is a
private organization, run by individuals and companies with the purpose of making a profit
and not controlled by the government. The goal is to develop marketing strategies and
market expansion to provide quality products or services to customers to improve profits.
Enterprises have the ability to expand to grow into large enterprises (KENTON, 2019).
➢ In public sector: These are enterprises that are completely controlled by the government
directly or indirectly. Equity of these businesses is owned by the government. Businesses are
in different fields and aim to provide basic goods or services to customers. Through various
such as taxes, fees and through financial transfers from other levels of government to provide
for public services (Rouse, 2015).
Tiki is currently the most trusted online shopping sites in the e-commerce field in Vietnam. It
provides more than 500,000 products of more than 6,500 reputable brands, meeting the diverse
shopping needs of customers and contributes greatly to the economy. Therefore, Tiki is
considered in the corporate sector.
PG Tanker is a state-owned enterprise under the Ministry of Transport. PG Tanker operates in the
petroleum transport industry with the largest fleet of the petroleum tankers in Vietnam achieved
international standards. Therefore, PG Tanker is determined in the public sector.

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2. Evaluate the impact and importance of small businesses on the economy.
a. The impact of small businesses on the economy.
The economics of small business (Gasiorowski-Denis, 2015)
The world economy is changing strongly under the impact of technology revolution 4.0 with around 95%
of businesses in the world is micro and small businesses (Gasiorowski-Denis, 2015). Micro and small
enterprises take over a large part and the rate of increase in quantity is greater than that of large
enterprises by providing different products and services to customers (MILLER, 2019). It contributes
about 50% to GDP in the economy and makes about 63% of created jobs for workers in most national

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markets. Moreover, it determines the fair competition and stable maintenance of the economy because
of its small size so it is easy to adjust the suitable strategy.
According to statistics in 2017, the micro and small businesses dominate about 98% total number of
businesses, 40% of gross domestic product (GDP) and 50% of employment in Viet Nam (Das, 2017). The
micro and small businesses which are relatively dynamic in the economy, contribute to job creation,
restructuring of state enterprises, pay tax, healthy fair competition between local and use local
resources (Brown, 2018).
The impact of Danang Souvenirs & Cafe business to local economy:
- Danang Souvenirs & Cafe which is small business of local, brings growth to the community of Da Nang
city, where businesses are established by creating jobs for students, reducing the unemployment of
the city.
- Danang Souvenirs & Cafe business when established will have to pay local taxes. That money
contributes to the operation and implementation of local functions and tasks to stabilize and develop
the community.
- Danang Souvenirs & Cafe business promotes the inspiration for entrepreneurship of the younger
generation to make the economy discover more markets.
- Danang Souvenirs & Cafe business with the goal of promoting Da Nang's image achieved success in
healthy, fair competition between local by creating quality handmade products, effectively serving
markets.
b. The importance of small businesses and business start-ups to the growth of the social
economy.
Definition of social economy.
According to Lim, social economics which is formed based on voluntary, non-profit, focuses on
the social objectives and builds the relationship between social behavior and economics (LIM,
2019). The social economy distinct from the public and private sector economies because it aims
to handle the social problem rather than a need to make a profit.
Why social entrepreneurship.

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According to Tyre, social entrepreneurship is the combination of commerce with social issues to
impact the living environment that brings value to society (Tyre, 2019). There are reasons that
explain why social entrepreneurship matters (waldenu.edu, 2014):
- First, creating attention to an urgent issue and inspire the community with the influence
of the business.
- Second, creating economic value by creating jobs, contributing to regional or national
economies and local economic development.
- Third, creating social value: it builds strong relationships among individuals in social and
economic networks by funding local projects in favourable conditions.
- Fourth, creating unique opportunities: With creative ideas, or simple solutions that can
bring about changes or solve difficult problems for society.
- Finally, this is a social mission that brings positive changes to make the world a better
place.
The impacts of the chosen social enterprise.
ME TO WE has a great impact and helps address the government's concerns about 5 areas:
➢ Food: WE partner with communities around the world to address agricultural issues and
food security. Training and providing food growing facilities to have a clean, diverse food
source and create a stable source of income from selling surplus food. Thereby, members
of the community have improved their economy and self-mastered the food source.
➢ Health: WE have partnered with community partners in developing countries to help
access medical clinics, organize injection programs, and facilitate healthcare professionals
to train the community on disease prevention and healthy habits. Thereby, providing
more than one million people with access to health care habits and transporting millions
of dollars in essential medical supplies worldwide.
➢ Clean water: WE have worked with regional authorities to assist by installing hand pumps,
boreholes, wells, pipelines, hand washing stations, rain catchment systems and toilets.
The WE movement has helped one million people have access to clean water, health care,
sanitation and help the community thrive.

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➢ Education: WE has brought sustainable, long-term educational opportunities to
communities by improving access to children's schools and providing teacher resources.
Thereby, more than 1500 schools have been built in the WE community, giving 200,000
children the opportunity to develop true potential.
➢ Opportunities: WE have designed a comprehensive and sustainable development model
to help communities with the tools they need to generate income and escape poverty
themselves. WE work with local organizations to provide communities, especially women,
with the skills needed to create a sustainable business. Thereby, more than 30,000
women have been provided with self-sufficient economic tools.
The contribution of 4 types of businesses:
➢ Danang Souvenirs & Cafe: Danang Souvenirs & Cafe contributes to the social activities by
creating jobs for local people, inspires creative entrepreneurship willingness for young
people. Danang Souvenirs & Cafe does not have many social activities. An enterprise
should have many social activities such as charity to develop businesses.
➢ Tiki: According to Tra, Tiki contributed to social activities such as social protection and
charity. In 2016, Tiki staff and charitable organization "The Fire Journey" organized a
program to support flood victims in Ha Tinh province by helping to repair and clean up the
consequences after the flood and support both material and spiritual for local people (Tra,
2016). Moreover, Tiki also raises funds to help children with heart disease in the country
(donduong, 2014).
➢ PG Tanker: PG Tanker donated and contributed to social protection and social activities
for children in the mountains. In 2016, PG Tanker sent to preschool and primary school in
the Den Bien province with 540 pairs of sandals and VND 5 million in cash to build schools
in mountainous provinces (Dung, 2016). In 2015, PG Tanker organized a trip to the Social
Protection Center IV in Hanoi. PG Tanker offers gifts and support to helpless elderly
people here (Dung, 2015).

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c. The differences small, medium and large enterprises make to the economy.
For small and medium enterprises:
Small and medium enterprises are more than 93% of all businesses and play an important role in
the economy. In the trend of integration and globalization, small and medium enterprises are
supported to maximize resources and support large enterprises, increasing the competitiveness
of products (replus, 2019).
Small and medium enterprises with small capital size hinder the application of new scientific and
technological advances to commercial activities. Therefore, these enterprises often focus on
industries that are closer to consumers than investing in heavy industries, mining production
needs capital (replus, 2019).
Small and medium enterprises play a very important role in creating the majority of jobs, meeting
the employment needs of the people, contributing to income generation and improving people's
living standards (replus, 2019).
Small and medium enterprises must face fierce competition from companies, large corporations
and businesses in the same industry. Therefore, small and medium enterprises in these countries
must find new ways and tools in their business activities (replus, 2019).
Small and medium enterprises have appeared in most regions and localities, so they have well
exploited local resources. Small and medium enterprises have used nearly half of the labor force
in the country. Moreover, small and medium enterprises also use the financial resources of
people in the region, the source of materials in the region to operate production and business
(replus, 2019).
As Da Nang Souvenir & Cafe is a small business with a number of employees under 50, limited
scale, income and capital are not large but in return, businesses have contributed to creating
more jobs for people and construction building the local economy.

15
For large enterprises:
Large enterprises, although only 5% of the total number of registered businesses are currently.
However, large enterprises play a key role in the economic development of countries around the
world. It contributes to creating jobs for many people, responsible for boosting the economy and
contributing a large amount of GDP to the nation's economy (replus, 2019).
Large businesses create stability for the economy. Large companies and enterprises have long
and stable economic development, which helps the economy to be stable and reduce
fluctuations (replus, 2019).
Large businesses make up important industries and services. In Vietnam, businesses such as oil
and gas corporations, electricity corporations, coal and mineral corporations are important
sectors (replus, 2019).
Large enterprises have huge capital and strong economic potential so they can quickly change
and interact with advanced science and technology in the world. Therefore, it has strong
competitiveness in the capital, human resources and brand better than small and medium
enterprises (replus, 2019).
As PG Tanker, with a large scale and number of employees, businesses have contributed to
creating a lot of jobs and promoting the national economy.
Thereby, any business has its own characteristics. Small businesses can grow faster and account
for the majority of registered businesses but do not grow steadily compared to large enterprises
with strong scale and investment. Both PG Tanker and Danang Souvenirs & Cafe are profitable
and help develop the country.
VI. Conclusion.
Along with the properties, characteristics and advantages mentioned above, the small and
medium business has an important role in the development of the socio-economy. Thereby,
contributing to creating diversity, flexibility and meeting social needs. Entrepreneurs must
consider the characteristics of each region to invest and exploit resources effectively.

16
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