Small and Medium Enterprises (SMEs)

This assignment examines the role of Small and Medium Enterprises (SMEs) in Nigerian economic development. It analyzes the challenges faced by SMEs, particularly women entrepreneurs, and explores the influence of leadership styles and government policies on their performance. The assignment also investigates the contribution of SMEs to national growth and delves into the global context of entrepreneurship and SME policy.

Entrepreneurship and Small
Business Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different types of entrepreneurial ventures and their relation with typologies of
entrepreneurship.....................................................................................................................1
P2. Similarities and differences between various entrepreneurial ventures...........................3
TASK 2............................................................................................................................................5
P3. Assessing and interpreting relevant data and statistics to illustrate how micro and small
businesses impact on the economy.........................................................................................5
P4. Importance of small businesses and start-ups in the growth of social economy after Brexit
................................................................................................................................................7
TASK 3............................................................................................................................................9
P5. Characteristics, traits and skills of two successful entrepreneurs which differentiate them
from other business managers................................................................................................9
P6. Aspects of the entrepreneurial personality that reflect entrepreneurial motivation and
mind-set................................................................................................................................11
TASK 4..........................................................................................................................................12
P7. The way background and experience can hinder or foster entrepreneurship.................12
Motivation factors:- It includes discount,superior quality and attractive offers in their products
motivate or enforce costumer to buy goods and services..............................................................13
CONCLUSION...........................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Entrepreneurship is making things available and manage for starting new business. There
are requirement of many resources for establishing business. There is essential of proper
planning and analysis of resources available. Most necessary component of entrepreneurship is
entrepreneur. They are individuals who come with new and innovative ideas. They arrange
financial and non financial resources on their own. Sometimes in initial phase of
entrepreneurship there is no profit remaining for entrepreneur. They must possesses quality of
adaptability.
Small business management is composition of two words. Small business means
commercial activities done at small level to generate profit. While management implies to plan
and coordination of actions. Hence small business management means planning, organising,
coordinating business activities to gain revenue. In this entrepreneur have to play many role on
its own. This report provides knowledge about various types of venture, aspect of entrepreneurial
mind set, effect of small business on economy and environmental component which affects the
entrepreneurs.
TASK 1
P1. Different types of entrepreneurial ventures and their relation with typologies of
entrepreneurship
Entrepreneurial venture:
Entrepreneurial venture is a place where entrepreneur and his efforts meet. It looks like
normal business, but there is difference in both. In entrepreneurial venture, there is more
requirement of innovations and changes. There is the need of analysis of market frequently so
that there will be more chances of growth.
Entrepreneurship:
This is the way to make things possible which are pre-determined. This is all about
planning, gathering information, analysis of resources, etc. (Koellinger and Roy Thurik, 2012).
Entrepreneur:
He/ she is the person who takes initiatives to start a new business according to need of
environment. They help in economic and technological growth of the nation. They operate their
operations at a small level. If there is no proper planning done then there are chances of getting
failure.
1

Types of entrepreneur: There are few types of entrepreneurs. Some of them are: Social entrepreneur: These entrepreneurs are engaged in solving the social problems
more than generating revenue. They get support from big organisations as they are
working for the benefit of society. Female entrepreneur: As the name suggests, these enterprises are owned and run by
females (Henrekson and Sanandaji, 2014). All dealings are based on the women section
of the society. This works for the upliftment of females. Serial entrepreneur: In this, they run business from a long time and continuously make
changes as per the need of society.
Ventures of entrepreneur: Some of the ventures are as follows: Small business entrepreneurship: These include small business ideas such as craftsmen,
architecture, etc. They initiate at a small level. They work their own and arrange fund
from personal sources. Scalable entrepreneurship: These businesses run at a large level. They publish idea with
people and convince them to invite in their venture. Their thought is different from
general idea. Social entrepreneurship: These ventures work for the benefit of society. There is special
help provided to them from government as they are working for some social welfare.
Relationship of typology with entrepreneur ventures
Basically, typology is knowing types of entrepreneur. Different business ventures are
directly or indirectly related to the types of typology. Some of the typologies are discussed as
under: Survival ventures: These ventures come up with an idea to earn to satisfy the basic needs.
There are some family responsibilities over them. Lifestyle ventures: Lifestyle ventures works to improve living of standard of people.
There are quick changes in the demand of consumers. Hence, they also modify their
policies accordingly (Gill and Biger 2012).
 Managed growth ventures: These ventures are run by the person who know how to
manage growth of business and earn revenue. They come with an idea or thought with
which they thought that fund will generate high returns.
2

There are many famous companies which are today running with huge capital and employees.
Though they also come with small ideas. Some of them are:
 Larry Ellison is famous name in the field of information technology. He is CEO of Oracle
Corporation.
 Today, Facebook is famous all over the world and in every age group. This is all because
of Mark Zuckerberg who is the founder of this program. In his initial days, he took his
first salary of $1.
 In the fashion industry, one name Vera Wang was very famous across the world. She is
the founder of Vera Wang fashions.
P2. Similarities and differences between various entrepreneurial ventures
There are different types of entrepreneurial ventures. Each has some similarities and
variations among them (Dennis Jr, 2011). So the uniform features, characteristics and differences
between different business ventures are explained as below:
Lifestyle and serial ventures
Similarities
 These businesses do not have any objective of earning profit. They only run for giving
benefit to the society. They do not have a selfish motive as both contribute to the social
activities. This helps in the development of people. They also give their funds to different
charitable institutions, trusts, foundations which enhance and improve the position of
marginalized children, old people in the country. Both ventures work at small scale and do not run for profit .they only do social
contribution and helps in development of people. So there is increase in reputation and
respect of them in front of people within the country. These businesses do not have huge
financial resources, many activities and processes and includes less money to start the
business (Mwobobia, 2012).
Differences
These only run with their own funds. They do
not borrow funds from others.
This is a type of business in which investors
invest their funds for starting the venture. They
do not use their own funds.
They do use strategy for running their
business. So there can be problem in achieving
They create and implement them for achieving
3

the objectives as they do not have proper
plans.
the goals and objectives of business.
They do not have proper location for starting
business.
This venture prefers a particular location where
there business is operating.
Entrepreneur himself take their own decisions
related to business.
Decisions are taken by a competent person who
can take important decisions.
Female and male entrepreneur
Similarities
 Both Women and men ventures are dedicated towards their objectives and their work.
They had passion and zeal towards the profession. They create different unique and innovative ideas. Through it their business runs
successfully and it is important for long run performance of the firms. Both have
leadership skills which is required in the work. They also take opportunities and then
create plans and policies.
Differences
Female takes more time in taking their
decisions.
They do not take time and quickly take their
decisions.
They emphasis on improving the quality of
product and development of society.
This business reduces cost of product and
hence it results in improving the performance
of economy.
They are not willing to take financial risks in
their venture.
Male entrepreneurs take financial risks as their
objective is to earn huge profits and
development of their business.
Females emphasise on developing good
relationship with their customers.
They focuses on improving quality of product
and the results and do not try to maintain good
relationship with people
4

TASK 2
P3. Assessing and interpreting relevant data and statistics to illustrate how micro and small
businesses impact on the economy
There are different small and micro industries operating in the country. They helps in
giving the employment to many people and helps in reducing the poverty and development of
economy (Karlan and Valdi6via, 2011).
CLASSIFICATION
Business can be classified as- Micro enterprise- It is the business in which only single individuals including females
who are running the business (Types and forms of business, 2017). Some employees are
working under their owner. They invests their resources, funds in venture .Owner works
according to his capabilities and skills.
 Small enterprise- It is a business runs by an individual whose main objective is to earn
the profits (The surprising trend for SMEs on G-Cloud, 2016). Around 80-100 employees
are working in it. They give jobs to different people earns profits.
Illustration 1: The surprising trend for SMEs on G-Cloud
(Source: The surprising trend for SMEs on G-Cloud, 2016)
5

 Large enterprise- This is a venture which have huge financial resources. Around 250
employees working in it and it has more workers as compared to small and medium scale.
It operates in different regions and places and it has huge turnover.
Sole proprietorship Nature- It is a business in which single individual is operating the business. He is
responsible for profits and losses (Obiwuru and et. al., 2011). Characteristic- It takes less cost and few financial resources to start the venture.
Individual has unlimited liability which means he has to sell after the personal assets a
person for repayment of debts. It is generally used by small industries.
Partnership Nature – It is a business in which more than one persons are working to run the business. Characteristics- It takes large financial resources to start the venture. All employees are
responsible for earning of profits and losses. This business is divided into two types.
Firstly includes general in which there is unlimited partnership includes that personal
assets are sold to creditors (Olusegun, 2012). Secondly limited partnership which means
all members do not have sell the personal assets for repayment to creditors.
Corporations Nature- It is an organization in which owners have separate legal identity from the
company. Characteristics – It has limited liability (Preuss, 2011). Owners only sometimes involve
in the affairs of the company. Board of directors controls the activities of entire firm.
Impact of micro and small businesses on economy Giving employment- It gives jobs not only in large cities but in rural areas. So there is
development of women and poor people. This helps in increasing the income and they
can also start their own business. Reduces the poverty- It provides employment in urban as well as in rural areas. So thus it
reduces poverty in the country and helps in development of poor. Reduces disparities between rich and poor- These industries help in providing jobs to
poor people and women. So thus they can start their business and earn profits. So thus
reduces the differences between rich and poor.
6

 Increases the national income- It provides employment in different areas .These
industries are working in different areas. So thus it increases the income of country and
there is development of the economy('New york' industries are more likely to be in cities.
2018).
(Source: 'New york' industries are more likely to be in cities, 2018)
P4. Importance of small businesses and start-ups in the growth of social economy after Brexit
Brexit - It is a British term that referring to the UK's decision in June 23, 2016
referendum to leave the European Union. The vote's result and external global markets causing
British pound decrease against US dollars in 30 years. It refers to the possibility of withdrawing
British members from European unions. David Cameron the prime minister of Britain against the
Brexit because in 2010 he had to withstand pressure about a Europe vote from the pro exit UK
independence party and PM resign from post. It is considered debatable topic because after this
the new PM is now break the stereotype in the EU negotiations after Brussels.
Difference between small business and start-ups
Small Businesses Start-ups
7
Illustration 2: 'New york' industries are more likely to be in cities, 2018

Small business is not designed for future
growth.
They are starting with a motive of sell
product in small area I.E small customer
base.
Small business believes in physical
delivery or in other sell product through
face to face communication between
buyer and seller.
They sell products with a short term
objective of profit making.
It provides common or fashion out
products to their customers.
It has privately owned firm having less
than 250 employees.
It is designed after scanning external market
demand so future growth is definite.
Their main objectives to diversify their
business in large population area.
They are coming with pre-planned structure of
business so they sell through E-commerce
websites.
Sell products not only with an objective of
profit maximisation but for social welfare also.
They come with innovative ideas and sell
product according to recent customer demand,
needs and satisfaction.
All the ideas are creative so they wants to give
distinct product to their customers.
Impact of small-business on social economy of UK are:
Economic and Social Development:
From economy point of view SME business growth at higher peek because businesses
come with innovative product and services which satisfied the needs of present customers which
leads to higher growth (Ogechukwu and Latinwo, 2011). Around 37% of SME engaged in
innovative activity that help them to diversify their business in large population base. Higher
sales leads to higher profits that also contribute to economy GDP. Higher competition in SME
market come with distinct variety of product that improve the living standard of customers from
society point of view.
Reduction in poverty and infrastructure development
Although most of the small scale businesses are not employers but sole trader who owned
their business independently provide large number of employment to UK population that reduces
the poverty. All the lower and middle class gets employment because of SME which leads to
growth and higher productivity (Brandstätter, 2011). Further, concern to infrastructure
development government spend lot of expenditure in proper transportation, hospitality, research
development centre and higher education system leads to change the image of UK country.
8

Huge government revenue:
After Brexit, ironic development in SME sector shocked the other competitors country ,
due to its export of country increase because of higher demand of SME products and services not
domestically but internationally also (Smart and Smart, 2012). That allows UK government
charge higher taxes on exports which leads to thesaurus foreign exchange earnings.
TASK 3
P5. Characteristics, traits and skills of two successful entrepreneurs which differentiate them
from other business managers
Successful entrepreneurs are those who start their business with zero and do all such
activities with an objective to make it profitable. Entrepreneur covers three element i.e. risk,
profit and innovator, absence of three component not make them enterpriser. Skill and efficiency
make their business profitable and successful. Two well-known entrepreneur who known for
their different skills, quality in running the business. Here are differences between their skills,
way of conducting business.
Basis Steve Jobs Bill Gates
Type of company He is a co-founder apple corporation
one of the leading top most mobile
brand with Macintosh operating
system.
William bill gates the
chairman of Microsoft
corporation the world's leading
software firm.
Key Success factor He commit to his teacher to become
millionaire before he reach 30 and that
one commitment result the innovation
of Apple having own software called
IOS.
He did not underestimate
himself and that trust in
himself make it possible to
build largest software
company having own
operating system called MS-
DOS.
Education difference He graduated from high school and
registered in reed college in Portland,
Oregon and in 1974 Jobs worked as a
video game designer in Atari, Inc. a
He completed his education
from University of
Washington and at the age of
13 he wrote his first program
9

pioneer in electronic arcade recreation. to play farmer chess.
Speciality He conceived a series of personal
computers which are user friendly
which they marketed each for $666.66
and earned huge profits.
He convinced IBM to give up
the specifications of secret
design in an open system for
its personal software which
help in understanding working
of other software.
Characteristics/ skills of entrepreneur and managers of a company:
Characteristics/
Skills
Entrepreneurs Managers
Innovation Entrepreneur comes in market with
innovative ideas or know how to
produce goods that satisfy the needs of
customers.
Mangers manage and execute the
whole plans on the direction of
top level so systematic working
culture maintained.
Risk factor Known for risk handling situation and
uncertainty.
They are risk taker not risk maker
that give strength to their team
members to face difficult
situation.
Leadership Style It adopt informal leadership style that
help him to closely interact with their
team members.
Mangers usually adopt formal
behaviour and lead in
professional manner in order to
maintain decorum and culture of
organisation.
Dedication Dedicated or determined attitude
towards goals and challenges.
Patience and diplomatic
behaviour help managers in
taking risky decisions
Strategic Vision They come with long term objectives or
in other word not focus on profit making
Manager precede all the business
activity according to company
10

but also concentrate to sustain in
external environment.
vision which strategically formed
by top level that help in achieving
objectives.
The traits to become successful entrepreneur are:
 The entrepreneur must be dedicated towards achieving goals and objective in order to
gain higher returns in future.
 High confidence, taking risk in every movement and bear all losses without stress,
tension in life.
 He must be innovative, explore opportunities and scan the external environment in order
to satisfy the customer and retain brand value in market.
P6. Aspects of the entrepreneurial personality that reflect entrepreneurial motivation and mind-
set
As above discussed Steve Jobs and Bill Gates are names of two personalities who are
famous all over the world. They are mile stones or role model for whole world. Their leadership,
motivation techniques can be used by others to achieve the goals set by them. These people give
positive impact to the society that hard work can make dreams come true.
Personalities of such personalities can be classified under five major headings. They are: Openness to experience: To experience new things it is important to try new and daring
things. Through trying new things individual came to know about its strength. This
changes the personality and give new energy and confidence (Oni, 2012). Steve Jobs and
Bills Gates both of possesses this quality. This gives impression of having dynamic
nature and adaptable to change. Conscientiousness: This is most important characteristic in these entrepreneur. This
states that to achieve anything one must be determined and specific to work for it. One
must have aim to achieve it. If target is fix then person is concern regarding his/ her acts.
This gives the feeling of dutifulness to entrepreneur. Extraversion: Being an entrepreneur he/she should always ready to learn new things. To
acquire knowledge one should be prompt to grab the opportunities. To acquire new things
he/she should communicate with the outer world. One has to leave his/ her comfort zone.
This impression gives good image in the industry.
11

 Agreeableness: Steve Jobs and Bills Gates are the person who were to learn new things.
They cooperate with the environment and act as per the need of society. Hence to become
successful entrepreneur one should be agree for accepting challenges.
 Neuroticism: Human is a social being. Hence there are many things that affects the
person mentally as well as physically. There are many moments in life with which
individual has to deal. In the field of entrepreneurship there are lots ups and downs in the
life. People should ready for all those changes and accept them. One should be
emotionally strong to tackle hurdles in the business life.
TASK 4
P7. The way background and experience can hinder or foster entrepreneurship
Entrepreneurship is a complex field influenced by interchanging external internal factors.
There are many elements that affect the business activities which include all economic, social,
political, psychological and other factors (Oni, 2012). All the components have both; positive
and negative influences on the emergence of entrepreneurship. Following factors foster or hinder
the entrepreneurship:
Personality factors
Personality traits such as nature, inner desire, risk bearing, background and experience
affect the working progress of individual. If person has desire to work independently and
willingly to work for long hours and self-confidence foster the individual business and become
rigid in every business situation hinder growth of business. Personal factors, becoming core
competencies of entrepreneurs, include
 Initiative
 Proactive
 Perseverance Self confidence
Environmental Factors
It is related to the conditions in which entrepreneur has to work. If individual that is working in
such environment is not satisfied with business then that negativity will hinder their working
culture. It is important whatever product firm introduced in market must satisfy the needs of
customers. These factors change frequently and competitors come with distinct varieties of
12

product line. So, if businessman does not adjust their organisation culture according to
competitor’s strategies then it will affect the goodwill and profitability of firm.
Political Factors
Some researchers feel that the growth of entrepreneurship is affected by political
conditions set by government. Political stability is one of the important elements for smooth
economic activities (Smart and Smart, 2012). Instability affects their business in the form of
frequent political protests, strikes as well as hinders economic activity and entrepreneurship.
Unfair trade practices, disequilibrium in BOP policy as well as imbalance in export and import
serve as roadblocks to the growth of entrepreneurship. So, maintaining good relations with
political party and update with all external trends of environment help to increase firm’s
productivity and in improving the brand value.
Socio-Economic Factors
The entrepreneurial activity is also influenced by the social and cultural factors as well
because anytime business uses any marketing strategies should not defame anybody personality
and not hurt the emotions of any class. Unethical trade practises affect the image of firm that also
acts as a hindrance in company’s growth. If individual starts business only with a profit motive
objectives and does not concern the social welfare never success in establishing loyalty in eye of
costumers.
Some socio economic factors that either foster or hinder the brand equity of firm are: Caste/religion: Any entrepreneur starts business with such market strategy that hurts the
feelings, emotions, against the ethics of caste, religion of particular group affect the
sustainability of businessman. Level of perception: It is important the perception of external customer must be same
whatever the marketer delivers to their audience.
 Motivation factors:- It includes discount,superior quality and attractive offers in their
products motivate or enforce costumer to buy goods and services.
CONCLUSION
From the above discussion, it can be concluded that it is not necessary that entrepreneur
generates profits in the starting phase of start-ups. There are lots of changes which have to be
made after starting business. Sometimes, there is shortage of funds as well as start-ups do not
generate profit but only cover the cost incurred. To motivate entrepreneurship in the nation,
13

government provides many tax benefits and concession to entrepreneur. As there is government
support, it generates interest in the minds of persons. There are many social, political, economic
factors which affect business. It has been assessed that by the same, their morale gets boosted.
They share their experience of ups and downs in their career path. Overall, it can be articulated
that to make entrepreneurship a success, there is the requirement of different research
programmes conducted timely to know what more can be done to improve quality of services
and products.
14

REFERENCES
Books and Journals
Brandstätter, H., 2011. Personality aspects of entrepreneurship: A look at five meta-
analyses. Personality and individual differences. 51(3). pp.222-230.
Bridge, S. and O'Neill, K., 2012. Understanding enterprise: entrepreneurship and small
business. Palgrave Macmillan.
Dennis Jr, W. J., 2011. Entrepreneurship, small business and public policy levers. Journal of
Small Business Management. 49(1). pp.92-106.
Gill, A. and Biger, N., 2012. Barriers to small business growth in Canada. Journal of Small
Business and Enterprise Development. 19(4). pp.656-668.
Gorgievski, M. J., Ascalon, M. E. and Stephan, U., 2011. Small business owners' success criteria,
a values approach to personal differences. Journal of Small Business
Management. 49(2). pp.207-232.
Henrekson, M. and Sanandaji, T., 2014. Small business activity does not measure
entrepreneurship. Proceedings of the National Academy of Sciences. 111(5). pp.1760-
1765.
Karlan, D. and Valdivia, M., 2011. Teaching entrepreneurship: Impact of business training on
microfinance clients and institutions. Review of Economics and statistics. 93(2). pp.510-
527.
Koellinger, P. D. and Roy Thurik, A., 2012. Entrepreneurship and the business cycle. Review of
Economics and Statistics. 94(4). pp.1143-1156.
Mwobobia, F. M., 2012. The challenges facing small-scale women entrepreneurs: A case of
Kenya. International Journal of Business Administration. 3(2). p.112.
Obiwuru, T. C. and et. al., 2011. Effects of leadership style on organizational performance: A
survey of selected small scale enterprises in Ikosi-Ketu council development area of
Lagos State, Nigeria. Australian Journal of Business and Management Research. 1(7).
p.100.
Ogechukwu, A. D. and Latinwo, H. K., 2011. Entrepreneurial developments and small scale
industry contribution to Nigerian national development-A marketing
interface. Information Management and Business Review. 1(2). pp.51-68.
Olusegun, A. I., 2012. Is small and medium enterprises (SMEs) an
entrepreneurship?. International Journal of Academic Research in Business and Social
Sciences. 2(1). p.487.
15

Oni, E. O., 2012. Development of small and medium scale enterprises: The role of government
and other financial institutions. Oman Chapter of Arabian Journal of Business and
Management Review. 1(7). pp.16-29.
Preuss, L., 2011. On the contribution of public procurement to entrepreneurship and small
business policy. Entrepreneurship & Regional Development. 23(9-10). pp.787-814.
Smart, A. and Smart, J. eds., 2012. Petty capitalists and globalization: flexibility,
entrepreneurship, and economic development. SUNY Press.
Online
The surprising trend for SMEs on G-Cloud. 2016. [Online]. Available through:
<https://www.aptitudesoftware.com/surprising-trend-smes-g-cloud/>.
Types and forms of business. 2017. [Online]. Available through:
<http://www.accountingverse.com/accounting-basics/types-of-businesses.html>.
'New york' industries are more likely to be in cities. 2018. [Online]. Available through:
<http://www.centreforcities.org/reader/small-business-outlook-2015/the-economic-and-
policy-context/>.
16