Entrepreneurship & Small Business Management - Sample Assignment
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[…………………..] Assignment Title: [Entrepreneurship and Small Business Management] Submitted To: [Daw Phway Phway Aung] Submitted By: [Khant Min Zaw] [Student ID -2018A5874] Level – 4 HNC in Business STRATEGYFIRSTINSTITUTE
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Contents Entrepreneurship..............................................................................................................3 Different types of entrepreneurial ventures and relation to the typology of entrepreneurship..............................................................................................................3 There are many different ventures. These difference are depend on the purpose and Finance investment and individual purpose of people and the characteristics of entrepreneurs. Four types of entrepreneurial ventures in Myanmar are as follows;.....3 Small business entrepreneurship..................................................................................3 Scalable Business Startups Entrepreneurship..............................................................3 Large Company Entrepreneurship................................................................................4 Social Entrepreneurship................................................................................................4 The similarities and differences between entrepreneurial ventures.................................4 Example in Myanmar....................................................................................................6 Entrepreneurship in Public sector and cooperate sector..................................................6 The Importance of SME in Economy................................................................................8 Definition of SME and criteria in Myanmar....................................................................8 SME member List in Myanmar....................................................................................10 Background and History..............................................................................................10 Impact of SME in Myanmar Economy.........................................................................11 The importance of small businesses and business start-ups to the growth of social economy.........................................................................................................................11 The differences of Small, Medium and Large business in Myanmar Economy..............12 Number of small medium large firm data 2016 / 2017 / 2018................................12 References.....................................................................................................................16
Entrepreneurship Entrepreneurship is the study of how to create new business and the certain process of starting a new business. Now, entrepreneurship is a popular major in every university with an aim on studying new venture creation. The road to entrepreneurship is often a treacherous one filled with unexpected detours, roadblocks, and dead end.(Fenandes, 2019). Different types of entrepreneurial ventures and relation to the typology of entrepreneurship There are many different ventures. These difference are depend on the purpose and Finance investment and individual purpose of people and the characteristics of entrepreneurs. Four types of entrepreneurial ventures in Myanmar are as follows; Small business entrepreneurship Today in the world, small business entrepreneurship spread with immense rate in business field. This type can operate the business by the owners and a few employee. (e .g Business can startup with family members and friends). In Myanmar, there are many business of this types such as tea shop, store, Air con service. The formations of these business are family business model. Along with this, the income levels are not much and these businesses always centering to get more customers and development of their services and products. There are more than half of people in Myanmar are depend on the small business.(Drucker, 2014) Scalable Business Startups Entrepreneurship This kinds of entrepreneurial venture start business with creative ideas and focuses on the quality of product and services. These entrepreneurs’ main motto is to change the world. And then they search investment from venture investors. They always attract financial investment from the investors in order to expansion or achieve the objectives and then to do new innovations. The main aim of this entrepreneurs is to find scalable business and try to catch the business by perfect strategies.(Drucker, 2014)
Large Company Entrepreneurship These businesses are larger than above two entrepreneurship. The large company has certain life cycle and they emphasize on supplying new product or service to the people for sustainability of the business. They are always focus to competition. Therefore it is important to shape product and service suitably with the changes of trend and business environment. New competitors can offer pressure on the existing and to innovate more products. Therefore the creative ability of the entrepreneur can create new products and can attract new customers. And then making innovation in existing product can sustain their success. Social Entrepreneurship The intent of this entrepreneurship is for the social systems. The entrepreneur of these organization focus on solving problems by producing and implementing their products and services. This type of entrepreneurship focus on creating better environment for the people. And then it can be for profit or non-profit.(Scarborough, 2016) The similarities and differences between entrepreneurial ventures FactorsSmall Business Entrepreneurship Scalable startup entrepreneurship Large company entrepreneurship Social Entrepreneurship GoalsThese business types are might not have specific goals. They aim to work on high profitability and more growth. They focus to innovative products and achieve profit. These firms emphasize on sustainability in the existing market by producing new products and services and strategies. They intent to change the world for better placement of the social systems by providing quality and effective products or services. RisksTheir risks are lower and high The risk is high because of Their risks are medium because The risks are not much for those
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competition is the problem for those business with same size. financial investment and may be failure. And then it has the pressure to return for the investors by sales volume. of they are existing brand value in market. But competitors are always still. because they can get help from public and government. Employee number There are may be less than 50 people. But in Myanmar, most of them are not more than 10 people and around. It depends on structure and size. It can be more than 500. But in Myanmar, the large firms have around 200 and 300 people. It also depends on the size of the business and may be same with small business in Myanmar. StructureThere are no specific organizational structure because of family types and business run with sole proprietorship and partnership. It also run with sole proprietorship and partnership. Their structure is generally complex and can be public or private limited company. Mostly trustee based organizations. Then I present the two examples about different entrepreneurships in Myanmar: Fame Pharmaceuticals Industry Co. Ltd which produces herbal products from the finest organic herbs in Myanmar to support health and wellness and Genius Shan Highlands Coffee which intent to support community development projects in the villages in Shan State.
Example in Myanmar TopicFameGenius Type of ventureLarge Company EntrepreneurshipSocial Entrepreneurship OwnerDr. Khin Maung LwinU Ngwe Tun GoalThey believe that prevention is the best medicine for healthy and supplements. They aim to development of the Danu farmers and supporting community development for the village. RiskPeople trust are very important for company. Therefore they are committed to sustainable organic agriculture and healthy benefits. There are low risk but they have other coffee competitors. Employee number The company has over 300 employee.Genius currently 30 employees full time staff and they organized over 100 farmers. LocationTheir organic farm is located in Pyin Oo Lwin and they manufacture drug in Yangon. Growing and production is operate in Ywar Ngan Township in Southern Shan State and Their cafes are opened in Yangon. YearIt was started in 2000 in Pyin Oo Lwin.Genius started processing and roasting coffee in late 2012. Entrepreneurship in Public sector and cooperate sector Entrepreneurship in public sector and cooperate sector are based on that they are business entrepreneurship and social entrepreneurship. There are various kind and type of entrepreneurial ventures in Myanmar by depending of the purpose of the business and investment range and also on the individual purpose. Both of these kinds are emphasize on their target market.
Entrepreneurship in cooperate sector can be determined as a business of economy and making profit. These business are not owned by government like public sector. Entrepreneurship in public sector are moderated by government. Government and some private organization help to them and provide invests. These kinds of organization intent to offer quality products and services to the people.
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The Importance of SME in Economy The micro and small businesses support immensely in the economy of a country. SMEs are crucial in the development of Myanmar economy because they can create a lot of job opportunities, employment, income generation, resource utilization and promotion of investment. The increasing of small business make high income by offering products and services. The small business running in the country is playing an important role in the development of the economy. Moreover, small businesses such as small store, small restaurant, small ticket service, not only create job opportunities and but also support the GDP increase for the country. SMEs paly as an important role in also Myanmar. 99.4% of all business in Myanmar are classified as SMEs. Government trust that small business entrepreneurship will develop the country’s future economic. In addition, 10% are micro (less than 5 employees) and 69% are small (5 to 19 employee) business in all of enterprise. (Charltons, 2019) There are four measures or criteria for classification, namely number of employee, investment and production volume and electrical usages. This is used to divide the different size for Myanmar private firms. These four measures can be showed as follow: Definition of SME and criteria in Myanmar
Legal definition of SMEs according to the 2015 SME Development Law
SME member List in Myanmar There are many SME members in the whole Myanmar and it is divided region and state. According to the survey of Myanmar SME Development Agency in 2018 member list: There are 66652 small and 4214 medium. Graph is as follow: Kachin Kayah Kayin Chin Saging Tanintary Bago Magway Mandalay Mon Rakhine Yangon Shan Ayarwaddy Nay Pyi Taw 0 2000 4000 6000 8000 10000 12000 SME members list 2018 smallMedium (agency, 2018) Background and History Since 2011, Myanmar has been on a path of transaction from military rule and a state- controlled economy, towards democracy and a market-based economy. From 2012 to 2017, Myanmar’s GDP rate increase 7.2% per annum. But Small business in Myanmar are less likely to innovate than in Asia countries.
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In 2012, SME development was formed under the MOI. In 2014, It is extended across the country with 50 branches. In 2015, SMEs development law was enacted and also policy was approved. And then SMEs development rule was approved. In 2018, SMEs development working committee and responsible bodies were formed. Myanmar is also rich in natural resources. Therefore agriculture, forestry and fisheries, those enterprise can attract to high tourism potential. Impact of SME in Myanmar Economy SMEs are a main part of the economic framework in developing countries like Myanmar. SME produce product and service that people use in their daily lives. Therefore SMEs can be considered as the heart of the country’s economy. And then it also alleviate poverty and the development of SMEs can be considered as the character of modern country because of GDP rate increase, create large number of job opportunity for people.(Thanlwin, 2018) In addition, the role of banks in Myanmar is critical in developing SMEs sector because they can provide and support financial resources such as loans and collateral for small firms, especially which face with the financial problems. Nowadays, banks provide loans with interest rate of up to 13% a year. Besides the financial problems, fixed assets are needed as guarantee for loans. Lack of fixed assets and financial resources can hinder the success of start-up SMEs from innovation and creation. The importance of small businesses and business start-ups to the growth of social economy Start-ups business have influence in Southeast Asia countries in order to keep the growth of social economy. Start-up business habitually run with innovative ideas that can fit people needed. Start-up business can meet the market very fast and high revenue in short time. These business require to pay high amount of tax that can develop the economy of country to growth. This business also can reduce
unemployment in country due to low capital and hires low skilled employees with lower salaries. Most of these business are related with CSR activities to improve brand value. Those businesses support education poor people and then these people can use their help in future to get work. That is also support the growth of social economy. There are many start-up businesses are founded in every industries in Myanmar, it have high assistance in the GDP of Myanmar. The small business and Start-up businesses are the important role in Myanmar economy. Most of Myanmar people faced with unemployment. These small and start-up enterprises can decrease this problem as a main creator of employment in social economy. Many new jobs are became opportunities for Myanmar population. And then these opportunities can change Myanmar people life style and can develop life standard. Therefore small and start-up businesses are contribution of social economy. The differences of Small, Medium and Large business in Myanmar Economy The number of Small and medium businesses are more than large business in Myanmar. Small and medium business have huge part of every industry in Myanmar economy. Although the large business gain high income because of their brand value, small and medium businesses makes growth, creativity and innovations within societies and then they make the development of social economy in Myanmar. The role of SMEs make to stimulate the growth of living standard of people in Myanmar. On the other hand, the large business make foreign currencies and they also use large amount in CSR activities in country. Number of small medium large firm data 2016 / 2017 / 2018 YearMicroSmallMediumLarge 201642563156785031504 201748405172865243516 201853567194575318538
There are increase SME in annual. Therefore these enterprise make increase GDP and decrease unemployment. But 35% of medium and 25% of large firm do not pay corporate income tax. This is the bad losing for the Myanmar economic. Myanmar GDP Annual growth rate 201020122014201620180 1 2 3 4 5 6 7 8 9 GDP growth % percent Column2Column1Series 1 Myanmar GDP (billion)
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20102012201420162018 0 10 20 30 40 50 60 70 80 GDP (billion) Series 1Column1Column2 GDP by Sectors Year/SectorAgricultureServicesIndustry 201724.8%39.9%35.3% 201824.6%43.2%32.3% Sector contribution to growth (%change)
2012/132013/142014/152015/16 0.1% 1.0% 10.0% 100.0% Chart Title AgricultureIndustryServices Axis Title Percentage change Sources: MOPF, WB Staff estimates Most of Agriculture and service enterprises are regarded as SME and Most of industry enterprise are regarded as large business. Therefore small, medium and large business make this above GDP rate changes. Myanmar GDP by sector (kyat billion) 2013/142014/152015/15 0 5 10 15 20 25 30 35 Kyat billion AgricultureIndustryServices