Entrepreneurship Factors Analysis

This assignment focuses on understanding the key factors influencing entrepreneurship. It requires a comprehensive analysis of several studies, such as 'Social Capital and Entrepreneurship' by Gedajlovic et al., 'Factors Affecting Entrepreneurial Intention Levels' by Liñán et al., and 'The Role of Family Ownership in International Entrepreneurship' by Sciascia et al. Students should also consider the impact of education ('The Influence of Personality Traits and Demographic Factors on Social Entrepreneurship Start Up Intentions') and culture ('Culture and Innovation: The Moderating Effect of Cultural Values on Corporate Entrepreneurship').

ENTERPRENEURSHIP
AND SMALL BUSINESS
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types of entrepreneurial ventures.......................................................................1
P2 Similarities and differences between entrepreneurial ventures.........................................2
P3 Impact micro and small business have on the economy...................................................3
P4 Importance of small businesses and business start-ups for social economy.....................4
TASK 2 ...........................................................................................................................................5
P5 Characteristic traits and skills of a successful entrepreneur..............................................5
P6 Factors of entrepreneurial personality reflecting motivation............................................6
P7 Person’s background and past experiences to hinder or foster entrepreneurship.............7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Entrepreneurs are that people who improve economies of nations, with their efforts and
innovation in their business establishment. Entrepreneurship can be defined as the capability to
establish, manage and develop a business venture by facing its risks as to make profit.
Economically, it is said to be the combination of land, labour, capital and natural resources for
producing profit. Small businesses are a major part of the national economy and its management
consists of many important factors (Schaper and et. al., 2014). This report will be dealing with
various types of entrepreneurial ventures and, their similarities and differences between each
other. Roles and objectives of private, public and social enterprises will be discussed within this
report. The project will also be focusing on the importance of small businesses for regional,
national and international economies. The report will also highlight the personal skills and traits
of entrepreneurs that influences their business ventures and the impact of their personal
background and education in hindering or fostering their business.
TASK 1
P1 Different types of entrepreneurial ventures
There are a lot of types in business ventures and entrepreneurship, classified according to
different factors such as ownership and size. The classifications of business ventures according
to the ownership are:
 Public Enterprises: Business organisations that are completely or partially owned and
operated by state authority. Some times such firms are placed in public ownership
because the services or products they provided are by state monopolies. Utilities, such as
gas, electricity and particular forms of transport can be taken as examples (Bridge and
O'Neill, 2012). They basically perform their operations as for public services and not to
earn revenues. Private Enterprises: These can be referred to as the business firms that are owned and
operated by private individuals or group of individuals for profit and not for any
government or governmental agencies. They may be departmental stores, construction
company, etc. They mainly target financial profits and the development of their
organisation. There are a range of private entrepreneurship ventures classified according
to the number of owners:
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◦ Sole Proprietorship: A business owned and operated by a single individual. It is
understood to be the simplest form of business one could establish with no separate
legal entity (Storey, 2016). The business is totally dependent on that single person.
Sole proprietorships may be services like plumber, electrician, departmental stores,
etc.
◦ Partnerships: These are businesses owned by two or more individuals. In this, all the
partners may be a part of the operations of the business or may be one takes the
responsibilities of operations, depending on their skills and abilities. Active partners
are the ones who keep themselves engaged in the business whereas sleeping partners
are the ones who just invests by providing a share of capital but doesn't contribute in
the operations.
◦ Private Limited Companies: These are small to medium sized organisations run by
small group of owners or even families. Such companies generally offer limited
liability and legal protection for their shareholders but has certain terms and
conditions to be made applicable for regarding its ownership.
 Social Enterprises: These are not actually business ventures, but these organisations are
established to complete a social mission. Usually, such enterprises are established and
operated group of individuals with an aim of creating the world a better place. These are
not for profit organisations and may include charity trusts working for social reasons.
They mostly work in the sectors such as education, healthcare and other specific social
awareness segments such as child labour, human trafficking, domestic violence, etc.
P2 Similarities and differences between entrepreneurial ventures
Even though public, private and social ventures are differentiated on the basis of
ownership, there are some points at which they can be found similar to one another (Chaston,
2014).
 Orientation of customer services: Both sectors gives importance to their customers.
The customer of private enterprises are considered the king of their market as the private
firms are totally dependent on them for survival, whereas the public sector is established
for the only purpose of public service. Even though their base of customers widely
variable but their operations are mostly focused on meeting the customers' needs. Social
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enterprises focuses on particular backward segments of society and studies their lifestyle
to put efforts to improve them.
 Open to Change: As there are new technologies and skills updated day by day, both
public and private sectors are seen adapting those advanced features to create a better
environment for employees and customers. Latest technologies in the working
environment will help reduce efforts of employees and will give faster and comfortable
services to customers. As there are specified courses available that emphasizes on social
work, they employs volunteers with specialized education to improve their performance
by bringing more effectiveness (Foss and Gibson, 2015).
As there are comparative similarities between these sectors there are also major
distinguishing points:
 Objectives: Private companies operates with their major objective of making monitory
profits and expanding their organisation by developing it, where as the public sector is
operated by the government to provide basic facilities to the citizens and their motive is
public service. Social enterprises, is established with a motive to improve the society and
its particular sections to create a better social environment.
 Investment: Private enterprises are established with the investment of money that they
have raised from issuing shares or debentures. Sometimes they are started up with their
own saving of money or loans taken from banks and financial institutions. On the other
hand, public enterprises are established with the finance that have been raised in forms of
taxes, penalties and duty payments collected by the government from citizens.
P3 Impact micro and small business have on the economy
A successful small or micro businesses that is being established in market is a result of a
person's creative idea and investment of money (Phillips and Pittman, 2014). As there is a huge
number of entrepreneurs coming out with many such creative ideas and establishing their
ventures, there is now a major population of small businesses in overall economy of United
Kingdom. 99% of overall businesses in UK are classified to be small and medium sized
organisations, and therefore it creates a major influence on the local, national and international
economy.
 Job Creation: Small and micro businesses are that are present in UK are playing a
significant role being on best of employers. They just not involve just-the-employer
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firms such as sole proprietorship, where a man work's independently, but have major
workforce behind its success. Small businesses have been employing 24.3 million people
in UK, that can count to a portion of 60% of the total employment in private sector and a
gigantic 81% of the overall workforce (Chishti and Barberis, 2016).
 Economic Contribution: SMEs have been major contributors to the national economy.
Small and Medium enterprises have been providing the economy a combined turnover of
approx £1.6 trillion as in the beginning of the financial year of 2014.the private sector is
major part of the economy and the amazing figures of 47% of overall turnover of private
sector belongs to the SMEs alone.
 Industrial Growth: The leading industries in United Kingdom includes retailers,
manufacturers and motor service providers and other small businesses are related with
these core activities in the economy. Three out of every twenty SMEs belongs to one of
these sectors and a rate of 46% of all revenues earned by SMEs also comes from one of
them.
P4 Importance of small businesses and business start-ups for social economy
A small business may not have the ability of generating as much revenue as large
corporations make, but the excessive presence of SMEs in the economy have been outraging the
contribution of the huge forms. Small companies are considered to be important for the social
economy for the following aspects:
 Growth: Small businesses helps in stimulating the economic growth by providing
employment opportunities to the ones who couldn't be employed in the larger firm. Small
businesses are results of creative ideas and it tend to attract talents who could invent
products and solutions that are different from the existing ones. Even many large
corporations are dependent on SMEs to do certain part of their operations as they are
capable of specialising in those activities (Hoskinson and Kuratko, 2015).
 Ability to Adapt: Small enterprises has to ability to get adapted with spontaneous
economic climates and they could create response strategies immediately, as they could
apply them in less employees faster than it could be possible in larger companies. SMEs
are majorly customer oriented and they expect the customers to be satisfied even in the
time of crisis. This loyalty helps such small firms to adjust while the crisis and thus helps
in strengthening the economy.
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 Future: Small firms are not established with the thought of remaining small throughout
their existence. They are initiated with a motive to grow and develop their business
activities to a vaster level by expanding their target market and explore new areas where
they could emerge (Mullins, 2013). Their efforts to grow their small business into large
firms may sometimes exist within the same community were they started their operations
and it would help the economy to find a boost in their Gross Domestic Product.
 Social Development: As the number of SMEs are increasing in market and the
customers starts using their products and services will generate more income. When the
small firms start generating high levels of revenue, they will also need to pay higher
taxes. The taxes they pay are used in the development of social welfare and public
services. They public services include government authorised schools, hospitals and other
infrastructural amenities which is also a pert of development of society.
TASK 2
P5 Characteristic traits and skills of a successful entrepreneur
Not every businessman is successful. Some of the entrepreneurs fail in making their
dreams come true. Sometimes, they have to quit the path of entrepreneurship due to various
reasons. An ideal entrepreneur has a personality, developed out of his passion for business and
the knowledge he acquires regarding it. Here are some common characteristic features and skills
that successful entrepreneurs possess:
 Determination: This is the main aspect that is to be within the mind of an entrepreneur
when he decides to establish a business firm. A business man has to be determined about
what he is going to start and he must be aware of the risks that he will face on the way to
grow the business. He must be determined to face the worst conditions, such as financial
crisis and many other issues and must know that there is no success without struggle
(Fassin and Buelens, 2011).
 Passion: Success is not achievable until or unless an entrepreneur is passionate towards
his business. Passion is the mental factor that helps in bringing the most creative part of
you in developing the business. Passion for a particular business will make the
entrepreneur crave to learn more about the field and it will help in the growth and
development of the enterprise. The best example for passionate entrepreneur is Jack Ma.
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He once discovered about internet and he found it interesting. The passion of internet
made him in establish Alibaba group, a company involved in e-commerce, and now he is
amongst the successful businessmen in the world.
 Networking: This can be taken as characteristic trait and skill at the same time, as it is a
part of personality and his motive towards business growth that makes him build and
maintain relationships. A good entrepreneur will know to build relationships based on
values that would be truly useful to create a network where these relationships may be a
subject to future business opportunities (Colombo and et. al., 2012). Some time
relationships built for along term even benefits mutually for entrepreneurs.
 Money Management: No matter how much money an entrepreneur makes from his
business, he has to be aware of the source of finance from which they have invested.
Over expenditure and poor financial decisions like find allocation of tasks which are not
that important can be reasons behind a business getting ruined. An entrepreneur must
know where and why he is spending his money on. He need to posses money
management skills.
P6 Factors of entrepreneurial personality reflecting motivation
There are certain factors on which motivation depends on for entrepreneurs in which
some are psychological factors and some are physical. Hereby, the discussion will be on the
psychological factors or say the aspects of personality that reflects the motivational level of an
entrepreneur. The Big-Five is a theory that classifies personality traits of motivation into five
categories and they are:
 Surgency or Extraversion: It is the category where the personality is characterized in
the basis an individual's sociability and talkativeness. This is the part of a personality
where the emotional expressiveness is a subject to a person's motivation. People who are
extensively extroverted people are mostly seen outgoing and tend to gain high energetic
levels in social situations. Entrepreneurs who are in extraversion stage stays highly
motivated towards presentations and speech. They are always energetic towards gaining
attention and creating social circles. This helps in building relationships and improving
leadership skills (Chittithaworn and et. al., 2011).
 Agreeableness: This part of a entrepreneur's personality includes trust, kindness,
affection and pro-social behaviours. People who are highly agreeable are more
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cooperative and who are low it tends to be competitive and manipulative. Entrepreneurs
with high rate of agreeableness seem to care about his employees and will inspire them to
perform well and also support them towards achieving their goals (Liñán and et. al.,
2011).
 Conscientiousness: This dimension of an entrepreneur's personality decides how
responsible and dependable he is. It also includes the level of thoughtfulness and goal-
directed behaviour he possess. Entrepreneurs high on conscientiousness spends time on
preparing proper plans so that they could be achieved successfully and finishes each tasks
with effectiveness.
 Neuroticism: This is a major dimension for an entrepreneurial personality should
possess. This describes the emotional stability of an individual, that how calm, sad,
moody or emotional unstable he is. An entrepreneur is supposed to be low on neuroticism
so that he could handle the stress and face the risks successfully to go ahead and shall not
fall prey to depression.
 Openness: It is the dimension of an individual's personality which decides his or her
level of imagination and insight. An entrepreneur needs to be high on the features of this
traits as he need to have more creative ideas and he should be ready to try new strategies
and must have the dare to face the challenges when a new strategy is applied within his
organisation.
P7 Person’s background and past experiences to hinder or foster entrepreneurship
There are a lot of aspects that affects an individuals perspective towards establishing a
business and running it that depends on their social, economic and geographic origins, that is the
personal background and life experiences of an entrepreneur, such as:
 Occupational history: It were the educated and employed people who were attracted
towards establishing enterprises rather than the ones who are already engaged in business
or agriculture (Fayolle and Gailly, 2015). There are families who are running business as
a part of their traditional occupation such as blacksmiths, who used to make tools of
metals and sell it. Later, it was seen that the successors of the ones in the blacksmith
tradition got education and started larger firms for producing more number of units in less
time. Thus, the background of occupation can affect the entrepreneurship.
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 Educational backgrounds: The educational qualifications of a person is highly
influencing for their entrepreneurship. The education provides them the knowledge and
skills that will help them to establish a business that have scope and support the activities
involved in the operations. The knowledge and skills that he acquires from his education
will also help him in growing his business and develop it to expand into vaster level of
markets.
 Geographic Origins: The factors of the location from which an individual
geographically belongs also have the scope to decide the aspects of his entrepreneurship
venture. A person's geographical belonging can influence in his business by the products
he is dealing within his business and the ethics he basically adopts while performing
entrepreneurial activities (Singh Sandhu, Fahmi Sidique and Riaz, 2011).
 Background of Family: Family background of an individual is also a factor that could
decide the features of his entrepreneurship. The size of his family and their economic
status are also a subject to the business venture he is establishing. Background of a
family in manufacturing provided a source of industrial entrepreneurship. The economic
status of their family can be decisive regarding the size of the organisation he wishes to
start. Mobility is also influenced by the social and occupational status of the family
(Turró, Urbano and Peris-Ortiz, 2014).
 Cultural background: There are a lot of regional exercises that are practised towards the
attitudes of achieving material gains relating it to the efforts an individual makes. Some
people are mentions a theory named 'protestant ethic' found in the Christian beliefs that
supports in the fostering of entrepreneurship. Several business ventures are established to
make certain cultural substances available to communities that have been residing in a
foreign country. Thus culture plays an important role in fostering entrepreneurship.
CONCLUSION
The report has dealt with various types of entrepreneurship and their scope in relation
with their missions and objectives. The roles played by public, private and social enterprises in
the society and economy are also discussed within this report. The importance of small and
medium enterprises to be present in the society and their influences in the economies at local,
state, national and international level is also included in a major part of this report. The project
has also focused on the reasons of needing more small and medium enterprises in the market for
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the impact they are creating in the development of society and economy of nation. The report
has also highlighted those common characteristic traits and skills possessed by successful
entrepreneurs. The factors related to entrepreneurial personality that helps in building positive
psychological mindset towards motivation they reflect in their entrepreneurial activities are also
included in this report. The report has also focused on the factors of a person's background and
past experiences that can hinder or foster of his entrepreneurship.
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REFERENCES
Books and Journals
Bridge, S. and O'Neill, K., 2012. Understanding enterprise: entrepreneurship and small business.
Palgrave Macmillan.
Chaston, I., 2014. Small business marketing. Palgrave Macmillan.
Chishti, S. and Barberis, J., 2016. The FINTECH Book: The Financial Technology Handbook
for Investors, Entrepreneurs and Visionaries. John Wiley & Sons.
Hoskinson, S. and Kuratko, D.F. eds., 2015. The Challenges of Ethics and
Entrepreneurship in the Global Environment. Emerald Group Publishing.
Chittithaworn, C., Islam, M.A., Keawchana, T. and Yusuf, D.H.M., 2011. Factors affecting
business success of small & medium enterprises (SMEs) in Thailand. Asian Social
Science. 7(5). p.180.
Colombo, M.G., Laursen, K., Magnusson, M. and Rossi‐Lamastra, C., 2012. Introduction: Small
business and networked innovation: Organizational and managerial challenges. Journal
of Small Business Management. 50(2). pp.181-190.
Dennis Jr, W.J., 2011. Entrepreneurship, small business and public policy levers. Journal of
Small Business Management. 49(1). pp.92-106.
Fassin, Y., Van Rossem, A. and Buelens, M., 2011. Small-business owner-managers’
perceptions of business ethics and CSR-related concepts. Journal of Business ethics.
98(3). pp.425-453.
Fayolle, A. and Gailly, B., 2015. The impact of entrepreneurship education on entrepreneurial
attitudes and intention: Hysteresis and persistence. Journal of Small Business
Management. 53(1). pp.75-93.
Foss, L. and Gibson, D.V. eds., 2015. The entrepreneurial university: Context and institutional
change. Routledge.
Gedajlovic, E., Honig, B., Moore, C.B., Payne, G.T. and Wright, M., 2013. Social capital and
entrepreneurship: A schema and research agenda. Entrepreneurship Theory and
Practice. 37(3). pp.455-478.
Liñán, F., Rodríguez-Cohard, J.C. and Rueda-Cantuche, J.M., 2011. Factors affecting
entrepreneurial intention levels: a role for education. International entrepreneurship and
management Journal. 7(2). pp.195-218.
Mullins, J., 2013. The New Business Road Test: What entrepreneurs and executives should do
before launching a lean start-up. Pearson UK.
Phillips, R. and Pittman, R., 2014. An introduction to community development. Routledge.
Schaper, M.T., Volery, T., Weber, P.C. and Gibson, B., 2014. Entrepreneurship and small
business.
Sciascia, S., Mazzola, P., Astrachan, J.H. and Pieper, T.M., 2012. The role of family ownership
in international entrepreneurship: Exploring nonlinear effects. Small Business
Economics. 38(1). pp.15-31.
Seymour, R. ed., 2012. Handbook of research methods on social entrepreneurship. Edward Elgar
Publishing.
Singh Sandhu, M., Fahmi Sidique, S. and Riaz, S., 2011. Entrepreneurship barriers and
entrepreneurial inclination among Malaysian postgraduate students. International
journal of entrepreneurial behavior & research. 17(4). pp.428-449.
Storey, D.J., 2016. Understanding the small business sector. Routledge.
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Turró, A., Urbano, D. and Peris-Ortiz, M., 2014. Culture and innovation: The moderating effect
of cultural values on corporate entrepreneurship. Technological Forecasting and Social
Change. 88. pp.360-369.
Online
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The Influence of Personality Traits and Demographic Factors on Social Entrepreneurship Start
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