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Importance of Small Businesses and Start-ups in the Social Economy

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Added on  2023/01/11

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This article discusses the importance of small businesses and start-ups in the growth of the social economy. It explores the impact of SMEs on living standards, innovation, job creation, and more. Discover the characteristics, traits, and skills of successful entrepreneurs.

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Entrepreneurship and Small
Business Management

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Table of Contents
INTRODUCTION...........................................................................................................................1
P1. Types of entrepreneurial ventures....................................................................................1
P2. Similarities and differences between entrepreneurial ventures........................................3
P3. Micro and small businesses impact on the economy.......................................................4
P4. Explain the importance of small businesses and business start-ups to the growth of the
social economy.......................................................................................................................7
P5. Characteristics, traits and skills of successful entrepreneurs...........................................8
P6. Aspects of entrepreneurial personality depict motivation..............................................10
P7: Background and Experience can hinder or foster Entrepreneurship..............................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
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INTRODUCTION
Entrepreneurship defined as setting up of a business while undertaking financial risk in order
to create value and profitability from them. In simple terms it is an ability to develop, organise
and run a venture while undertaking uncertainties in order to gain prominent advantages.
Entrepreneur is an individual who develop the business venture by their own and follow their
self interest to serve society and take financial risk in order to achieve maximum success in quick
period of time (de Gortari and Santos, 2020). Entrepreneurs are self motivators those who follow
their passion in order to fulfil their goals as to bring something unique and innovative in market
segment and satisfy customers with high quality services and product in a innovative manner and
serve their need in effective way. Entrepreneur not only serves society but also provide
significant advantage to a nation by maximizing their overall GDP by offering number of
employment opportunity to individual and raising their living standards.
Present report includes formative discussion on different type of entrepreneurial ventures in
addition to their typologies. Along with this report include differences as well as similarities
among entrepreneurial venture alone with influence of small scale and medium scale enterprises
upon economy of a nation. Further report include diverse range of entrepreneurial personality
with the assistance of ocean model in order define it in descriptive way. This report also includes
explanation of two different successful entrepreneurs of United Kingdom in terms of their skill,
characteristics and traits. Lastly, in this report discussion upon the extent to which, experience
and background of entrepreneur hinder or foster entrepreneurship.
P1. Types of entrepreneurial ventures
Entrepreneurship refers to excitement to run a business with adopting new changes,
situations and risks. Most of the entrepreneurship is carried out with the motive of starting a new
business. There are various types of entrepreneurship which are discussed below-
Small business entrepreneurship- This type of entrepreneurship mostly renowned small
level and main motive is to live in the market with limited profit and sale. For example retailers,
bakery shops,cafes are considered to be small business entrepreneurs (Huertas González-Serrano,
Jones and Llanos-Contrera, 2020). In this type of business risk associated is quite low and
decision making is done in effective manner.
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Scalable start-up business entrepreneurship- Scalable entrepreneurship business are
those in which independence invest in their start up business. They always look for new
opportunities and generate new ideas within the business sector. In such type of business,
decision making is dependent on venture capitalist or investors.
Larger scalable- Then comes the larger scalable entrepreneurship in which shares can be
traded and huge amount of capital invested in the business activities and operations. These types
of entrepreneurs are motivated towards innovation and invention. For example, Facebook,
Oracle, IBM and many more.
Social entrepreneurship- So these are considered to be those who you are the individual
for the start-up companies who run their business with motive of helping needy people.
Moreover, such types of organisations have limited number of employees and volunteers. In this,
risk associated with the business is moderate. For example- NHS service UK, Cancer Research
UK etc.
Typology of entrepreneurship
Serial entrepreneur- These are those types of entrepreneurs who you are always ready to
take the risk in the business. Moreover they focus on generating new ideas in the existing or new
business. For example- Apple, Elon Musk- Pay Pal, Space X. They always run for new ideas and
focus on achievements of the objectives.
Lifestyle ventures- Lifestyles dangers are those who run the business with motive of
acquiring maximum resources and larger share of market growth in the specific industry. For
example- blogging, poets, advisors etc. Their main aim is not to earn profit but to explore their
lives and enjoy the other stages of life.
Social economy- In this, it involves foundations, social organisations, democratic
governance, etc. This type of entrepreneurship always requires time and manpower who can
match up with their decision making.
Traits of successful entrepreneurs-
A successful entrepreneur is always motivated in the work.
There is full availability of knowledge, new innovations, ideas and thoughts
A entrepreneur is always ready to take the risk with positive energy
Moreover, a successful entrepreneur is flexible and accepts as well as adjusts
according to the new changes and trends.
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Also, use the capital and resources in most efficient manner.
Always present to deal with problems and solve difficult issues
After a brief analysis of above matter, it is seen that it is important to have
appropriate knowledge of different typology and entrepreneurship so that decision-
making is done in effective way.
P2. Similarities and differences between entrepreneurial ventures.
Similarities between Small, Large, Scalable and Social Entrepreneurs
A number of entrepreneurial ventures function within the bounds of an economy. There are
multiple similarities as well as dissimilarities amidst such ventures (Dabić, Sahasranamam and
Glinka, 2020). It is important to conduct a study over these similarities as well as differences.
Thus, a discussion is presented upon the same in a detailed manner beneath:-
Similarities between Small, Large, Scalable and Social Entrepreneurs
All these entrepreneurial ventures run with the motive of attaining development and
growth so as to enhance their scale of operations.
All the ventures intend to maximise the amount of profits so that the growth prospect for
the entities can be significantly enhanced. (Wang, Gnan and Flamini, 2020)
All of the entrepreneurial ventures capitalise upon innovation as the primary aspect to
gain the attention of large number of individuals and significantly attain competitive edge
at market place (Mazzarol and Reboud, 2020).
All the ventures tend to cater to the needs and demands of market place and fulfil the
same to achieve growth.
Differencse between small, large, scalable and social entrepreneurs
Basis Small size Large size Social Scalable
Meaning These are the
ventures that
function at a small
scale.
These business
function at large
scale level by
emphasizing over
location as the
These ventures
function for the
society welfare at a
moderate level
(Canestrino,
These are the
ventures which
function at scale
level.
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primary aspect. Magliocca and
Pawełek, 2020).
Objects These businesses
intend to attain
maximum profits
and thereby achieve
growth (Rosin,
Stubner and
Pinkwart, 2020).
The main intent of
this entrepreneurial
venture is to
facilitate expansion
of the business
operations.
These entities intend
to work for the
welfare and
development of
society and meeting
their needs.
These businesses
intend to increase
profit through
expansion of
operating
activities.
Capital These kind of
entrepreneurial
ventures require
relatively lower
amount in the form
of capital
investment for
carrying out
business practices.
These
entrepreneurial
ventures need
extensive amount of
investment as capital
to facilitate
expansion into
maximum
geographies.
These types of
ventures procure
funds from society as
they operate for
social welfare
(Cumming, 2020).
These ventures do
not require large
investment for
initiating the
business
operations.
P3. Micro and small businesses impact on the economy
Micro and small business enterprises have significant impact on a nation economy as they
provide significant opportunity for improvement and development for economy and individuals.
It has been evaluated that from past many years small and medium scale enterprises are rapidly
increasing in United Kingdom that also act as major source of revenue generation for country
government (Chadwick and Raver, 2020). In addition to this it has been evaluated that, these
enterprises provide different type of benefits to both individuals and economy in a great manner.
Mentioned below impact of small and medium scale enterprises in terms with United Kingdom is
being defined:
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Figure 1: Comparison of SMEs and large businesses in UK
As per according to the above graph it has been evaluated of small and medium scale
enterprises prevailing in single division in the provinces of United Kingdom. It has been
evaluated that country is having estimated number of 4.5 million medium and small scale
enterprises that significantly represent 99% of entities of United Kingdom. These entities
generate number of employment opportunities for individual that automatically increases country
per capita income (Fasinu, 2020). This aids United Kingdom to maximize their GDP rate and
enhance their International brand image. Further it has been evaluated that these organisation is
offering 33% of total employment in addition with 22% of total turnover. These organisations
have excellent impact on country development and growth of individual.
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Figure 2: Share of businesses in UK
According to the above mentioned diagram it has been evaluated that small and medium scale
enterprises perform their operation comparatively in large quantum than large and medium scale
enterprises in United Kingdom provinces (Sahasranamam and Nandakumar, 2020). It has been
evaluated that these enterprises combinedly generate 37% of overall turnover in addition with
offering 48% of employment to individuals in United Kingdom. These entities are impacting
upon domestic individuals in a significant manner by enhancing their living standards.
Figure 3: Business Type of Micro and Small Businesses in UK
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Further it has been evaluated that micro and small scale organisations get further
categorized in different sectors such as non innovators (23.9%), non exporters (33.2%),
innovators (12.2%) and exporters (13.6%). Thus, according to the evaluation it has been
identified that small and medium scale enterprises have significant contribution in United
Kingdom economy and individual growth (Croce, 2020). These entities provide wide range of
benefits in number of ways that significantly enhances country economic opportunity growth rate
in a well define and effective manner.
P4. Explain the importance of small businesses and business start-ups to the growth of the social
economy
Medium and small scale Enterprises acts as essential aspect for economic growth and
further provides wide range of benefits through which a nation can maximize their overall boost
of growth and opportunities. In context with United Kingdom it has been evaluated that with the
presence of maximum number of SMEs this nation is increasing its growth rate in a constant
manner. By seeing this government of United Kingdom is offering different type of opportunities
to this industry in order to provide them support. IT has been identified that government offer
many infrastructure as well as technological facilities to SMEs through which they can conduct
their functions in more effective manner and can boost economy in a remarkable manner.
Mentioned below there are some essential growth in economy due to SMEs is being define
below:
Standard of living:
Rise in number of small and medium scale enterprises have direct impact upon individual
living standard. This has been determined that these entities are providing diverse range of
employment opportunities to individual that automatically enhances individual living standards
in an effective manner (Champenois, Lefebvre and Ronteau, 2020). This automatically increases
per capita income that facilitates increase in country economy in a well defined and effective
manner.
Innovation:
SMEs organisations operate their functions in effective manner and are mainly emphasize
upon satisfying customers and society with unique and innovative product and services. By
keeping this in mind entities operating their services is focus upon innovation as to influence
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individual interest towards organisational offerings. This makes SMEs to create something new
in order to enhance quality of their product and services standards in order to attract customers in
an attractive manner. It has been identified that in UK there maximum number of SMEs that take
advantage of technology in order to develop their services and product as to influence customer
interest that automatically towards increasing United Kingdom economy at great extent.
Providing jobs:
One of the most important contributions of SMEs is that it engages in the process of
providing number of job opportunity to domestic individual by offering them desirable job.
Further it has been evaluated that SMEs in United Kingdom are offering job opportunity to
localised individuals (Thompson, Verduijn and Gartner, 2020). In addition to this it has been
evaluated that micro and small scale enterprises also hire semi skilled labour as well as those
individual who are having no specific skills. This effectively aid in increasing country per capita
income that facilitate economic growth and gross domestic production. In addition to this in has
been evaluated that SMEs also provide diverge range of training to their staff in order to make
them compatible with their job role. This increases individual skill and knowledge that enhances
overall profitability rate of company with job opportunity United Kingdom measures significant
increase in their economic performance.
P5. Characteristics, traits and skills of successful entrepreneurs
Entrepreneurship is defined as an individual who is having significant passion capability in
mode to convert an idea into a successful business venture by undertaking risk that are associated
with (Si, S, Wei and Cullen, 2020). It has been evaluated that an entrepreneur have specific form
of trait, characteristics and skills that further differentiate them from other individuals to perform
their operations. With the use of these elements they aim to offer unique services and products in
society. In relation to this, two famous entrepreneurs Richard Branson and JK Rowling of United
Kingdom are being considered. Mentioned below characteristics and trait of these is being
defined below:
Characteristics, skills and traits of Richard Branson
Characteristics
Belief: This is mainly known as essential characteristics that further state entrepreneur
confidence in terms with their ability competence and skill. It has been evaluated Richard
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Branson is having higher self believe that acts are the most essential element that support him in
their entrepreneurial process to have access to rapid success.
Traits
Creativity: This is the most important traits of an entrepreneur that facilitate them
towards conducting their operations in effective manner. It has been identified that in terms with
Richard Branson trait of creativity and innovation is being possessed by this entrepreneur that
makes him highly creative. This entrepreneur always emphasize upon bringing something new,
unique and creative in specific industrial segment that lead him to attain success in limited time
period. With the help of an effective creativity approach he attracts mindset of consumers and
further influences them in an effective manner.
Skills
Learning Skills: In order to grow, learning skill plays a crucial role and identify that
every entrepreneur have continuous learning skill that enhances the capability and efficiency in a
continuous manner. It has been identified that entrepreneur which is having learning skill as their
skills improve business performance in effective manner and increases opportunity for future
growth (Mazzarol and Reboud, 2020). This is mainly come with experience that Richard
Branson has attended from family and other acquaintance. In addition to this it has been
evaluated that respective entrepreneur also learn different things from past experiences and
further use those experiences in their business practices as to attain success.
Characteristics, skills and traits of JK Rowling
Characteristics
Leadership: This is one of the most effective an essential characteristics that an
individual is having that facilitate their capability to influence other individual in a team
individually or group to perform their task in effective manner. In context with JK Rowling this
has been evaluated that this entrepreneur is having efficient leadership characteristics through
which she provide supportive leadership to team members in order to maximize their
productivity, this facilitate individual to contribute their contribution in efficient way as to attain
success in time effective.
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Traits
Experimental: It is an effective trait that lead entrepreneur to continuously engage in the
process of bringing something new and unique in society by experimenting with things. In this
with the assistance of this trait JK Rowling one of the famous entrepreneur experiment with her
new book series Harry Potter had made herself recognised her presence in all around the world
by facilitating interest of individuals of every age group. In addition to this it has been evaluated
the Harry Potter is one of the most remarkable contribution of JK Rowling that aid in
popularising her image in global scale.
Skills
Focused: This has been evaluated that concentration is one of the most effective element
for an entrepreneur that offer support them in conducting their task and work in effective manner
by contributing their complete efforts (Zin and Ibrahim, 2020). With the help of focused
approach a person can accomplish their objective with great efficiency. In terms with JK
Rowling this has been evaluated that this entrepreneur is having skill of highly focus nature
towards her work. This is one of the ultimate influencing factors that increase efficiency of her
performance. It further lead her in executing tasks in a hard work in a successful manner in time
effective period and influence interest of large number of individuals around the globe.
P6. Aspects of entrepreneurial personality depict motivation
Entrepreneur is defined as an individual who initiate a business venture while undertaking
different type of risk elements into consideration with an aim to offer unique and innovative to
society in a well defined and effective manner (Lazzarotti, Gjergji and Visconti, 2020). In
context to this is it has been evaluated that and entrepreneurial personality is a combination of
wide range of competency, skills and knowledge that facilitate them to perform their objectives
in effective way. It has been identified that when an entrepreneur is possessing intense
motivation and sound knowledge this enhances their self believe and lead them to conduct their
activities and accomplish their objectives in efficient manner. Along with this it has been
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identified that Ocean model is defined as a framework that is a combination of five
entrepreneurial personality and traits that effectively reflects motivation as well as mind set.
Further this has been evaluated that above mentioned two entrepreneurs JK Rowling and Richard
Branson are having great form of entrepreneurial personalities and are having traits which is a
combination of motivation and attractive mindset, this is further being define with the assistance
of ocean model:
Openness: This trait of entrepreneurial personality reflects that entrepreneurs are full of
energy as well as zeal in relation to attainment of new knowledge base (Liu, Pugh and Adkins,
2020). They are always interested in undergoing new projects and endeavours in order to be
practically exposed to situations whereby they can inflate their learning and cognition. In this
relation, Richard Branson and JK Rowling were open to entailment of new opportunities to
facilitate growth.
Conscientiousness: This is a trait that reflects entrepreneurial personality to have
discipline along with ambition to attain the pre defined goals set by them within due time period.
Along these lines, Richard Branson as well as JK Rowling was willing to become entrepreneur
and open their ventures so as to reach out to audience and fill the market gap.
Extraversion: This trait of entrepreneurial personality obviates that entrepreneurs are
prone to emotional response as well as spontaneity. They research their surroundings to identify
a market gap, thereby developing a venture circumscribing that concept. JK Rowling as well as
Richard Branson have been extravert and thus came up with Harry Potter book series and Virgin
Airlines respectively after researching about the market.
Agreeableness: This is one of the efficient entrepreneurial traits that define that
entrepreneur while performing their work agrees with others. This has been identified that with
having this trait and entrepreneur effectively respect initiative as well as opinions of other
individual in order to develop an atmosphere in which there is formative corporation as well as
coordination (Ghezzi and Cavallo, 2020). In context to this it has been identified that both of the
entrepreneurs JK Rowling and Richard Branson is having agreeable and sympathetic nature
towards other individual through which they aim towards facilitating flow of thoughts and
innovative ideas as to accomplish success in a more attractive manner.
Neuroticism: It is one of the most essential and effective trait of an entrepreneur in which
it has been evaluated that entrepreneur is having full control over their emotional state and mid.
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In context to this has been evaluated and with the help of this trait both above-mentioned
entrepreneur is having full control on their emotional state that further facilitate them to
overcome any situation or complex issue in effective manner. In addition to this, with the help of
this trait they do not let failure impact upon their goal in any manner and other individual to do
the same.
P7: Background and Experience can hinder or foster Entrepreneurship
The experience and background act as a foundation approach for individual, in relation to
this it has been evaluated that entrepreneurs are having great influence by experience and
backgrounds from education, parents along with the experience that they have encountered in
their life stage (Muhammad Auwal, Sharifuddin and Ali, 2020). Present support includes
discussion on to business entrepreneur JK Rowling and Richard Branson. It has been identified
that their entrepreneurial life is being affected by the experience and background that they have
faced. These factors further facilitate them to become one of the greatest entrepreneurial
personalities around the world. Further it has been identified that elements that are prevailing in
experience and background of an individual effectively foster an individual to become a
visionary business person. Mention below experience and background of JK Rowling and
Richard Branson is being depicted.
Level of Education:
Education level has significant impact upon individual life cycle and facilitates them to
experience world in a different way (Boudreaux, 2020). In terms with JK Rowling this has been
evaluated that due to her academic knowledge her life is moulded in a better way, as it has been
identified that she have experienced a placement test in order to have excess in a prestigious
University, however she could not passed in the test and did not get entrance in the university.
After sometime prospective entrepreneur undertake BA course in French and experience some
work as a scientist that effectively help her to shape characteristics in an effective manner and
facility to develop as a business individual. After this she had a thought to have a progression of
work that effectively benefit her to attend worldwide acknowledgement in an effective manner.
In context which Richard Branson this has been identified that educational foundation of
this entrepreneur is poor, however he later transformed himself into a successful entrepreneur
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and owner of Virgin Atlantic group and further become a motivated and visionary business
entrepreneur for other individual in all around the globe.
Family background together with experiences:
Family experiences and background combinedly have a significant impact upon
entrepreneurial process. In terms with Richard Branson this has been evaluated that his family
background effectively encouraged him to be a successful business individual, this can be seen
by his upbringing from mother to encourage him to be an extra ordinary business individual.
While if it is talk about JK Rowling this has been evaluated that this entrepreneurship used
to have discussion of the dream story that was composed by her own to her sister. Further it has
been evaluated that this entrepreneur mother was also determined to have different type of
sclerosis (Apa, Noni and Ganzaroli, 2020). However it has been denoted that she is not having
that much great connection with her dad that impacted her in negative manner. While with
having a significant will power and enthusiasm she develops herself as a prestigious writer of
Harry Potter which is her prestigious release.
CONCLUSION
As per the above mentioned report it has been concluded entrepreneurship is a formative
process in which an individual; entrepreneur undertake take risk in order to develop and run a
business venture while ensuring maximum success and profitability. In addition to this, this
process is being undertaken by them in order to offer society and nation with unique and
innovative offerings and raise their standard of living by providing different type of employment
opportunity. It has been evaluated that there are number of entrepreneurial ventures and
typologies in which entrepreneurs perform their operations. Entrepreneur evaluates and takes
opportunities from risk factors and conducts their operations in order to develop a business
venture that effectively satisfy consumer needs and fulfil their goals. In addition to this it has
been evaluated that entrepreneurship provide diverse range of opportunity to individuals bio
bring them number of job opportunities. Further it has been evaluated that SME’s significantly
impact upon United Kingdom as it aid country to increase its overall GDP that enhances country
economy in international market place. Along with this, it has been evaluated that experience and
background acts as most essential factor that facilitate entrepreneur performance.
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REFERENCES
Books and Journals
de Gortari, R. and Santos, M.J., 2020. Rural Entrepreneurship and Small Businesses in Mexico.
In The History of Entrepreneurship in Mexico. Emerald Publishing Limited.
Huertas González-Serrano, M., Jones, P. and Llanos-Contrera, O., 2020. An overview of sport
entrepreneurship field: A bibliometric analysis of the articles published in the web of
science. Sport in Society, 23(2), pp.296-314.
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entrepreneurship in Italy. International Journal of Entrepreneurship and Small
Business, 39(4), pp.564-584.
Boudreaux, C.J., 2020. Ethnic diversity and small business venturing. Small Business
Economics, 54(1), pp.25-41.
Muhammad Auwal, A., Mohamed, Z., Nasir Shamsudin, M., Sharifuddin, J. and Ali, F., 2020.
External pressure influence on entrepreneurship performance of SMEs: a case study of
Malaysian herbal industry. Journal of Small Business & Entrepreneurship, 32(2), pp.149-
171.
Ghezzi, A. and Cavallo, A., 2020. Agile business model innovation in digital entrepreneurship:
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Liu, T., Walley, K., Pugh, G. and Adkins, P., 2020. Entrepreneurship education in
China. Journal of Entrepreneurship in Emerging Economies.
Lazzarotti, V., Gjergji, R. and Visconti, F., 2020. Socio-emotional wealth and innovativeness in
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Si, S., Ahlstrom, D., Wei, J. and Cullen, J., 2020. Business, entrepreneurship and innovation
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Fasinu, D.T., 2020. Collaborative Entrepreneurship and Building Small Business Communities
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Croce, F., 2020. Indigenous women entrepreneurship: analysis of a promising research theme at
the intersection of indigenous entrepreneurship and women entrepreneurship. Ethnic and
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Dabić, M., Vlačić, B., Paul, J., Dana, L.P., Sahasranamam, S. and Glinka, B., 2020. Immigrant
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Wang, C., Pellegrini, M.M., Czakon, W., Gnan, L. and Flamini, G., 2020. Opportunity
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