BTEC HND Assessment: Entrepreneurship and Small Business Management

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BTEC HND ASSESSMENT
UNIT 9: ENTREPRENEURSHIP AND SMALL BUSINESS
MANAGEMENT

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Table of Contents
Task 2 3
Defining the Concept of SME 3
Evaluation of the Growth and Financial Contribution of SMEs to the UK Economy 3
Task 3 8
Difference Between and Entrepreneur and a Manager 8
Necessary Entrepreneurial Characteristics and Skills 9
Analysis of Croft-Simon’s Entrepreneurial Personality 10
Analysing the Correlation between Entrepreneurial Characteristics and Entrepreneurial
Success 11
Factors that can Foster or Hinder Entrepreneurial Success 12
Evaluation of the Influence of Background and Experience on Entrepreneurs 13
References 15

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Task 2
Defining the Concept of SME
The term “SME” stands for Small to Medium Enterprises. SMEs are independent, non-subsidiary
organisations that employ only a few given number of workers. In addition to that, low number
of workers, SMEs can be defined based on the financial conditions such as yearly turnover and
balance sheets. According to how the European Union defines SMEs, there are three types of
businesses that fall into the category of SMEs. These are, namely, medium, small and micro
firms.
According to the European Union definition, for medium-sized firms, the number of employees
must be somewhere between 50 to 249, the number of employees for small-sized firms must be
somewhere between 10 to 49 and the number of employees for micro-sized firms must be
somewhere between 1-9 (Berisha and Shiroka Pula, 2015). In addition to that, the European
Union also defined that the turnover of the medium-sized firms must not exceed 50 million
Euros, the turnover of small-sized firms must not exceed 10 million Euros whereas, the turnover
of micro-sized enterprises must not exceed 2 million Euros.
Evaluation of the Growth and Financial Contribution of SMEs to the UK Economy
The presence of SMEs benefits the national, as well as, the global economies significantly. There
are a number of reasons behind the immense benefits that can be provided by SMEs to the
economies. These include the huge number of SMEs which contribute to the growth of the GDP
of nations, the massive opportunities of employment which increase employment rates within
nations, the self-dependent income levels which is endorsed by many governments throughout
the world and the taxation that is provided by these businesses to the nations. In this context, it
has been argued by many scholars that the presence of SMEs is the very backbone of the
economy of the United Kingdom (Nabitz et al. 2016). As per the UK government statistics, 5.7
million businesses run their operations within the private sector of the nation. Among the 5.7
million businesses, almost 99.9% of businesses fall into the category of small, medium and
micro-sized enterprises.

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According to the EU statistics, about 2 trillion Euros are generated by these businesses as
combined turnover each year that contributes massively to the growth of the GDP and economic
condition of the nation. The statistics provided by the European Union represents that the
combined turnover of all of the SMEs within the UK account for almost 51% of the total
turnover that is generated by the entirety of the private sector businesses that operate within the
nation. SMEs contribute massively to the increment of employment within the UK. SMEs are
situated throughout almost every corner of the country including both rural and urban areas,
which contribute to the development of employment opportunities in every region. Statistics
provided by the EU depict that over 60% of the total population of the United Kingdom relies on
private sector jobs that accounts for almost 16.3 million citizens (Love and Roper, 2015).
Furthermore, it has been represented by EU statistics that both the national, as well as, the local
economy of the different regions within the UK are massively supported by the presence of
SMEs within the nation. There are almost 5.5 million private sector businesses within the UK of
which almost 2.6 million businesses pay regular taxes to the United Kingdom government.
Additionally, due to the range and size of these businesses, any loss that occurs in an individual
business does not affect the overall economy of the nation and due to the small scale of loss, it is
easily recoverable by the SMEs (Loader, 2015). It has been statistically shown that in FY 2016,
the SMEs within the UK, combined, generated almost 91% of the products that were produced in
the nation. Finally, the corporate social responsibilities that are undertaken by the SMEs also
contribute to the overall development of the economic condition of the nation. According to
surveys carried out by the EU, almost one out of four private sector businesses within the UK
have contributed almost 55 billion Euros for the betterment of the society that significantly
endorses the social economy of the nation.