Importance of Small and Micro Enterprises

This assignment highlights the significance of small and micro enterprises in economic growth by creating job opportunities, increasing national income through equitable distribution of income, and attracting people towards them through increased awareness. It also discusses the challenges faced by these entrepreneurs and the importance of self-esteem and relationship satisfaction in their success.

Table of Contents
P1 Examine different types of entrepreneurial ventures
and explain how they relate to typology of
entrepreneurship...........................................................................................................................................................................................
P2 The similarities and difference between
entrepreneurial venture.................................................................................................................................................................................
P3 Interpret and assess relevant data and statistics to
illustrate its impact on the economy..............................................................................................................................................................
P4 Explain the importance of small businesses and
business start-up's to the growth of the social economy...............................................................................................................................
CONCLUSION...............................................................................................................................................................................................
REFERENCES...................................................................................................................................................................................................
P1 Examine different types of entrepreneurial ventures and
explain how they relate to typology of entrepreneurship.
Entrepreneur is an individual who possess ability to
generate new ideas and able to implement in and establish a
enterprise. Entrepreneur is an innovator who innovate
something and formulate a business. They play key role in
economy as these people possess required skills and initiative
necessary to forecast current and future needs.
There are four types of entrepreneurial ventures which are
defined on the basis of annual growth rate, time horizon,
management focus, technology investmen, source of finance,
management skills, structure, reward emphasis and various
basis are there. The ventures are described as following-

Small business entrepreneurship- This type of
businesses operates independently at small scale level (Berner,
Gomez and Knorringa, 2012). This business focus on providing
support to their families due to this they face problems in
attracting venture capital and they raise capital through their
friends or family. Example of this type of venture are grocery
stores, carpenters, plumbers, consultant etc.
Large company entrepreneurship- This type of venture
focus on innovation and offer new products which are variant
around their core product. They develop new products to meet
with changing consumer need and advanced technology.
Example of this venture are Google, Microsoft, Samsung etc.
Social entrepreneurship- This type of venture provides
product or services to serve social needs and to solve the
problems of society. The goal of this type of venture to create a
world as better place and not to make or earn profit or acquire
health. They can be classified into profit, non- profit and hybrid.
Example of this venture are Safe point trust which work in
respect to redesign tool and provide inexpensive non- reusable
syringes for clinic who are underfunded (Fama and French,
2017).
Different typology of entrepreneurship -
 Lifestyle venture- This type of venture focus on
increasing their own lifestyle. These ventures are started
with the intent of helping the entrepreneur to provide
pay for their expenses related to high standard lifestyle.
The venture has focus on reducing the cost of high
lifestyle rather than making profit These type of
typology is followed by small enterprise who focus on
the particular lifestyle of the region.
 Growth- potential venture- this type of venture focus on
increasing profitability of venture which result in rapid
growth of venture. It includes identification of new
techniques to satisfy the unsatisfied need of economy.
These type of typology is used by large scale enterprise
who has focus on the growth and profitability of the
enterprise.

P2 The similarities and difference between entrepreneurial
venture.
There are different entrepreneurship ventures with different
gauge. Each of these ventures consists of some qualities that are
similar to that of another ventures and simultaneously there is an
existence of differences between them. Four types of
entrepreneurship ventures are as follows :-
Differences
Basis Large scale
entrepreneurship
Small-scale
entrepreneurship
Objective These does not focus
on making money.
Large scale ventures
are the one who seek
to capture market by
providing innovative
product and services.
These focuses on both
making money and
growing continuously
by carrying out day-to-
day activities for
development.
Market share Captures large
market shares by
adopting cost
leadership at initial.
Captures smaller
market shares.
Mindset Here, the mindset is
to continuously seek
to start the new
venture .
These works on the
holding the same
business structure.
Basis Large scale
entrepreneurship
Small scale
entrepreneurship
Traits More experienced
and specialised
about the work
Calm and focused
towards achieving
the targeted
objective
Similarities : Large entrepreneurs and small entrepreneur
fosters some similarities such as-
 Both the ventures face the problem of funding.
Therefore both works with the higher degree of
innovation and creativity to solve the problems.
 Both works on the lean management system so that the
decision can be as quicker as they want and there is a
smooth flow of the information (Fraser, Bhaumik and
Wright, 2015).
 Both the business operates to compete with the best
industry practices by covering the niche market at initial
level of the business.

Scalable start-up entrepreneur and social entrepreneur -
Basis Scalable start- up
entrepreneurs
Social entrepreneurs
Objective Operates with the aim of
changing the world by
achieving the long term
vision of the business.
Operates with the aim of
full filling the social needs
of the public by providing
innovative products and
services.
Motive These works with the
motive of earning more
and more profits.
These do not work with the
purpose of earning profits it
focuses on hybrid.
Market share Covers larger market
share.
Focuses on smaller market
shares.
Mindset Here, the mindset is to
grow rapidly by starting
up new ventures.
Here, the mind is to serve
people and making world a
better place .
Value
creation
These delivers value to
their customers by
providing good at great
value prices.
These focuses on social
value creation with creation
of economic value.
Marketing
tools
Marketing communication
is done with the help of
social media, TV ,
billboards .
Marketing is done through
mouth publicity.
Similarities -
 Both these entrepreneurship ventures support success by
creating values for their companies.
 Both the businesses, In today's era focuses on online
marketing, and branding seriously for their improvement
and continuous development.
 Both work with the mission to provide satisfaction to
their potential customers by providing values to the
customers.
 Both of these entrepreneurship ventures owns a small
business (Garoma, 2012).
P3 Interpret and assess relevant data and statistics to illustrate
its impact on the economy
Small and micro enterprise play a important role in
economic development through removing poverty, inequality in
nation. The development of small and micro enterprise lead to
development of jobs in the economy. However, development of
SMEs is a difficult issue when it comes to raise fund. They
faces problem of lack of finance, lack of business skills and lack
of operating scale. The support provided to SMEs by
government is required to enhanced for the better development.
The impact of small and medium enterprises are as follows-

Employment Generation- The development of small and
micro enterprises improves the employment rate of economy.
As large company tries to down size the work and cut more jobs
whereas small and micro enterprise creates more jobs for the
peoples. This result in reduction of poverty, hunger and
economic well- being of society.
Increase growth- Small and micro enterprise have resulted
in contributing higher growth rate to economy as it increases the
flow of cash by launching new business in country which
increases monitory resource for the country. It also help in
development of infrastructure which contributes higher amount
in national income. This factors shows that small and micro
enterprises is contributing toward increasing the growth rate of
economy (Le Rouxand Bengesi, 2014).
Impact of small and medium enterprise on economy
Interpretation-
The above chart shows that micro and small enterprise
has contributed more in development of economy in
comparison of medium and large enterprise. The micro and
small enterprises is more beneficial for the economy. Therefore,
it can be concluded that small and medium enterprises benefits
more to the economy. The economy is classified into three
levels-
Local – The SME is providing goods to their friends and
family. It allows local people to shop locally and provide them
economic benefit. In villages, a small business is the only type
that can survive with serving to a reduced population as it does
not operate for profit.
Regional- The SME provide growth to the regional economy by
fulfilling the expectation of regional economy and providing
employment in the economy.
National- The SME is important for the development of
national economy as it increases the production, employment
generation and contributing to export & providing equal
distribution of income (Rodrigues and Rebelo, 2013).

P4 Explain the importance of small businesses and business
start-up's to the growth of the social economy.
Social economy includes various types of companies, firms and
enterprises such as cooperatives, mutuals, association,
foundation etc. Social economy includes enterprises ranging
from SME to large companies and operates at all level of
market. It is very important for the economy to increase the start
up and in cooperation of small businesses for attaining high
growth in social economy. Small and micro enterprise promotes
the growth of social economy by providing high number of
employment opportunities which enhances the efficiency of
country. The importance of small and micro enterprises can be
understood as-
 Provide employment- This type of enterprise provides
number of employment opportunities as the new set ups
require huge number of manpower. The new businesses
appoint people to make their enterprise attain long term
success. This also helps in increasing the national
income of economy by providing equitable distribution
of income.
 Increasing awareness- The enterprises faces challenges
in their first year of commencement so it is important to
increase awareness in public to survive in long run. This
will result in development of economy through increased
sales and profit by attracting people towards it
(Rodrigues and Rebelo, 2013).
 Motivation for new innovative product- The start ups
are established with the new innovative idea and
therefore increases competition for existing products.
The competitors get motivated towards the process of
innovation of idea and it also benefits the economy
through increased revenues of firm as people get
attracted towards new idea.
 Enhancing domestic culture- SMEs are providing new
products to the consumer which is increasing
profitability of the small enterprise. This contributes in
the social economy by improving growth rate of
economy.
CONCLUSION
From the above report it can be concluded that small
enterprises play a very important role in development of
economy growth by creating job and increasing national
income. There are different types of entrepreneurial ventures
exists with different objective.

REFERENCES
Books and Journals
Berner, E., Gomez, G. and Knorringa, P., 2012. ‘Helping a large
number of people become a little less poor’: The logic
of survival entrepreneurs. The European Journal of
Development Research. 24 (3). pp.382-396.
Fama, E.F. and French, K.R., 2017. International tests of a five-
factor asset pricing model. Journal of financial
Economics. 123(3). pp.441-463.
Fraser, S., Bhaumik, S.K. and Wright, M., 2015. What do we
know about entrepreneurial finance and its relationship
with growth?. International Small Business Journal.
33(1). pp.70-88.
Garoma, B.F., 2012. Determinants of microenterprise success in
the urban informal sector of Addis Ababa: A
multidimensional analysWeidmann, R., Ledermann, T.
and Grob, A., 2017. Big Five traits and relationship
satisfaction: The mediating role of self-esteem. Journal
of Research in Personality. 69. pp.102-109.is.
Le Roux, I. and Bengesi, K.M., 2014. Dimensions of
entrepreneurial orientation and small and medium
enterprise performance in emerging economies.
Development Southern Africa. 31(4). pp.606-624.