P3. Impact of micro and small businesses over economy

Entrepreneurship and
Small Business
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different types of entrepreneurial venture and their relation with typology....................1
P2. Similarities and differences between entrepreneurial venture.........................................2
TASK 2............................................................................................................................................4
P3. Impact of micro and small businesses over economy......................................................4
P4. Role of small and start up businesses in social economy growth of UK after Brexit......6
TASK 3............................................................................................................................................8
P5.Characteristics, Traits and Skills of Successful Entrepreneurs.........................................8
P6. Aspects of entrepreneurial personality that reflect motivation and mindset of entrepreneur
................................................................................................................................................9
TASK 4..........................................................................................................................................10
P7. Background and experience can hinder or foster entrepreneurship...............................10
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Entrepreneurship refers to the process of creating, setting, managing and developing a
business venture with new and innovative idea by taking all the financial risk. Small business
enterprises plays a major in the development of economy as it provide various growth
opportunities to country and citizens as well. This projects is explains about different types of
entrepreneurial venture and their link with typologies along with similarities and differences they
poses (Abdul Jalil, 2013). Further it describe about the role of small scale enterprises in growth
of economy. In addition to this, it explains about characteristics, skills and trait that an
entrepreneur have as well as its impact over mindset of entrepreneur. It also talks about various
factors that foster or hinder an entrepreneur in their actions.
TASK 1
P1. Different types of entrepreneurial venture and their relation with typology
Entrepreneurship refers to the process of organising, launching, managing and running a
new business by bearing all the financial risk in the hope of making profit. On the other hand,
entrepreneur refers to a person who come up with new and innovative idea in order to establish a
business. These entrepreneurs are sometime called as innovator, source of a new idea, business
or procedure. They have necessary skills and talent to bring new idea to market by analysing
current and future need. Following are the type of entrepreneurial venture:
 Small scale enterprises:- It refers to an enterprise which employee small number of
workers that are not more than 50 and doesn't have high volume of sale. Small scale
enterprises are generally operated by sole proprietorship (Slavin and Young, 2012).
These businesses include grocery stores, travel agent, plumber, electrician, carpenter etc.
 Scalable start-up entrepreneurship:- These entrepreneurs are the one who came up
with new and innovative idea to start their business with a vision to change the world.
They attract large number of investor from their talent and innovative ideas (Types of
Entrepreneurs, 2018). Scalable entrepreneurs work toward searching new opportunity to
start a business and then after establishing that effectively, they sell out the business to
start a new venture.
 Large scale enterprises:- It refers to the business that includes at least 5000 employees
and have annual turnover up-to 1.5 million euro. Large organisations have finite life
cycle and are generally grow through sustaining innovations as well as by offering
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variety in their products. Their main aim is to earn maximum profit by satisfying the need
of their target market through offering variety of products that are aligned according to
customer's demand.
 Social entrepreneurship: It refers to the kind of entrepreneurial venture that work
toward creating or providing product and services for the welfare of society. Their main
aim is to make world a better place and not to earn profit (Viles, Ormazábal and Lleó,
2018). They can be not-for-profit, profit or hybrid which operates for the welfare of the
society.
There are different typologies of entrepreneurial venture that are exist within business
environment which are as follows:
 Research entrepreneur:- These kind of entrepreneurs love to learn by conducting
research over every possible scenario for formulating strategies related to their future
business operations. They always tries to find out what work and what action to be
implement to achieve the growth in business. Large scale entrepreneurs belongs to this
typology as they conduct research in order to identify the needs of target market as well
as strategies used by competitors. This help in taking better decision and develop action
plan that can be followed to achieve higher market segment.
 Copycat entrepreneur:- This type of entrepreneur sees other person's success and tries
to copy them by establishing business with same idea. Small scale businesses are belongs
to copycat entrepreneur as they generally start their business by copying others idea with
the thought of achieving same position as well as profit in market.
 Determined entrepreneur:- These kind of entrepreneurs identify the opportunities and
work toward exploiting this opportunity to get higher success in market. They establish
their business by brining new idea which is not copied from any other entrepreneur
(Jones-Evans and Klofsten, 2016). Scalable start-ups are belong to determined
entrepreneur as they always bring new idea in market with the vision to change the world.
P2. Similarities and differences between entrepreneurial venture
There are different types of entrepreneurial ventures that are different in term of their
business size, aim and objectives but apart from this they also poses certain similarities that can
be better understand using following points:
Similarities between entrepreneurial venture:
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 Similarity between small business and scalable start-up business:- Both the
entrepreneurs are hard working and have limited number of employees in their business.
Major source of fund for small as well as scalable start-ups are short term loans and fund
from friends or family.
 Similarities between scalable and large scale:- Both the organisation operates their
business practices in high risk and higher return condition. Large scale enterprises
operates their business in competitive advantage and have a risk of loosing their share
(Barral, 2013). Apart from this, scalable entrepreneurs start their business with a new
innovative idea that include the risk of financial loss or failure of business.
 Similarity between social and scalable enterprise:- Both the enterprises set up their
business with the aim to improving the living standard of society by providing their
services. Social enterprises offer product or services that can the social problems. On the
other hand, scalable start-ups bring innovative product with an aim of providing better
life to people.
 Similarity between large and small scale enterprises:- Both the enterprises operate
their business with the purpose of earn profit. As small scale enterprises operate business
to earn money so that they can earn a better life for their family. On the other hand, large
scale enterprises operates for earning maximum profit so that they can invest this money
for further growth of company.
Differences:-
Small scale enterprises Social enterprises
 Small scale enterprises are setup with
the aim of earning money to earn their
livelihood.
 Source of fund for small scale
enterprises are fund from family, friend
or small term loans (Woodward,
Wojnicka and Pander, 2012).
 Small scale enterprises are set up by
seeing the success of other with the
hope of achieving the same profit and
 Social entrepreneurs operates their
business for the welfare of society.
 These organisations get fund through
charity and government.
 Social enterprises are set up by
recognising the social problem and
changes that are required to be made in
society to promote a better life.
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position in market.
Large scale enterprise Scalable enterprise
 These organisations includes large
number of employees in their company.
 Their main aim is to earn maximum
profit by offering product or services to
satisfy the need of customers (Leong
and et. al., 2016).
 Sources of fund for large scale
enterprises are long term fund, equity
capital, investors etc.
 Large scale entrepreneurs have to deal
with huge competition in market as
number of rivalries are present that
offer similar kind of products.
 Scalable enterprises generally start with
small number of team members. Their
main aim is to grow in a market with
their vision to change the world by
offering new and innovative product or
services.
 Sources of fund for scalable start-up
enterprises are short term loan, friends
and family.
 Scalable entrepreneurs have less
competition in market as they come up
with a unique product or services which
is new to market.
TASK 2
P3. Impact of micro and small businesses over economy
Small business refers to an enterprise that is a result of unique idea and set up with small
group employees that are not more then 50. These organisations doesn't generate much revenue
as compare to large enterprises yet they are vital part of economical success of country. Micro
and small businesses are considered as the backbone of UK economy which provides
development opportunity to country as well as citizen of nation by providing employment.
Through establishing small business, new ideas can be bring to market that support in improving
the standard of living (Hangarki and Hangarki, 2012). There are three ways through which small
businesses contribute toward the development of nation:- Financial independence:- It refers to a state where a person has required wealth to live
on without having dependency over any type of income from employment. Small
businesses provide opportunity to unemployed individuals to set up their business that
support them in earning their livelihood without being depend on another sources.
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Therefore, small businesses provide financial independence to individuals who have the
ability to bring innovative idea to market. This further contribute toward the growth of
country's economy. Encourage innovation:- Small businesses are the result of innovative ideas or products
that make an organisation different from others. This process of setting up business
provides greater development opportunity to owner and also attract large number of
customers that contribute toward achieving higher market share (Afroz and et. al., 2015).
These entrepreneurs also encourage others with their success to bring on innovative ideas
to market. This in turn support toward the development of economy of nation by
providing employment opportunity as well as product that fulfil need of society.
 Employment opportunities:- Establishment of small business are considered as the major
factor behind the growth of UK economy as they provide number of employment
opportunities to unemployed individuals. As after the event of Brexit, there are number of
large scale corporations that get closed due to sever loss faced by them after the
separation of UK from European Union. This leads to increase in unemployment rate as
large number of people lost their jobs. At that time small entrepreneurs take initiatives to
set up their business which provide various job opportunities to these individuals
(Havukainen, I. and et. al., 2014). This help in decreasing the unemployment ratio which
further improves the standard of living. These all contribute toward the economical
growth of nation.
Sometimes small businesses are born out from ideas that no one believe in them and feel
that these entrepreneurs get succeed. Opportunity to purse passion help an individual to grow and
convert their dream into reality.
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Source: Impact of Small Business on Economy, 2018.
Above given image depict about the contribution of small business enterprises in
economy after Brexit. These enterprises contribute 23.4% in the economy of UK. Therefore, it
can be determine that small business enterprises plays a crucial role in the development of
economy as they provide around 67% of employment in UK and contribute up-to 50% in GDP of
the country (The role of SME's in the UK Economy, 2018). Therefore, small businesses are
considered as an engine of growth that offer goods & services to both citizens as well as
government which they require to fulfil their needs. On the other hand, it provide opportunities
to entrepreneurs to convert their idea into reality. This simulates nation's economy as well as
encourage people to come up with unique idea to start a business.
P4. Role of small and start up businesses in social economy growth of UK after Brexit
Small businesses and start-ups have huge impact over the economy of any nation as they
are the major contributor toward the growth of a country. Their initiation toward launching a
product or service in market largely affect the society and GDP of country as well (Radović-
Marković and et. al., 2014). The economy of UK is highly developed and market oriented but the
event of Brexit (British exit) has damaged the economy of nation. Brexit refers to the decision of
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Illustration 1: Impact of Small business on Economy

UK to leave the European Union which has largely affected the country's economy. Impact of
Brexit over social economy are as follows:
 After the event of Brexit, price of pound get reduced.
 The unemployment rate increases within the country as people working in countries of
European Union loss their jobs.
 Increase in inflation rate results in increase in price of commodities that directly affects
the living standard of people. This, in turn, reduces the GDP rate of country.
 Large scale companies which operate in Countries of European Union get closed.
Brexit have an huge impact over the economy of country as they face heavier loss due to
closer of large scale companies as well as fall in price of pound. Apart from this, small business
entrepreneurs contribute up-to large extent toward the economy of country by taking an initiative
to bring new or innovative ideas to market (Lushi, 2013). As after Brexit the price of
commodities increases which also affect the buying behaviour of people lives in UK. This
provides a greater opportunity to people so that they can come up with unique product or
services to satisfy the demand of customers. After Brexit, number of small business get
established in UK that provide product or services in price lower than large scale enterprises.
These businesses help in improving the standard of living by satisfying the demand of consumers
at low prices.
Apart from this, small businesses also helped in providing the employment opportunities
to individuals who lost their jobs due to the event of Brexit. As majority of large scale companies
get closed, number of people lost their jobs. It also have an huge impact over the buying
behaviour and consumption rate of citizens as they have less money to spend so establishment of
small business offered jobs to them that further supported UK's standards of living.
Therefore, small and start up businesses contributed toward the social and economical
growth of UK by providing employment opportunities. This action is beneficial for both
employees as well as employer as people get jobs that help in making their life better by
fulfilling their necessities (Peiqun, 2012). On the other hand, small enterprises get skilled
employees at low paid salary.
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TASK 3
P5.Characteristics, Traits and Skills of Successful Entrepreneurs
Entrepreneur is a person who take an initiative to start a new business with some unique
idea that make them successful. But a successful entrepreneur have certain skills, characteristics
and traits that make them different from others. Following are two persons who started their own
business earlier and now they are the most successful entrepreneurs:
 Bill Gates:- Gates full name is William Henry Gates and was born on 28 October 1955.
Bill Gates is founder of Microsoft and is one of the most richest person in the world. At
age of 13, Gates joined a private school and got introduced with computer. Here, Bill
Gates learn basics of computer and made an easy 'Tic-Tac-Toe' game. Bill studied in
mathematics and computer science at Harvard. In 1976, William founded Microsoft by
entering in a contract with Micro Instrumentation and Telemetry Systems. Microsoft
introduced the first variant of Windows in 1990. Steve Jobs:- Steve Jobs was born on 24 Feb 1955 in San Francisco. Steven was co-
founder and CEO of Apple founded in 1976, investor and chairman of Pixar, founder and
CEO of NeXT. In 1984, Steve configured the first Macintosh which was first dealing
successful electronic computer to exercise graphical user interface.
Characteristics
Successful entrepreneurs have some characteristics by which they are different from
others. These are as follows-
 Risk taker:- A successful entrepreneur is never afraid to take risk. Bill Gates and Steve
Jobs were always ready to take risk and accept complex challenges. High risk pays high
return when a proper strategy is made that how to deal with the situation. Self belief, hard work and dedication:- Bill Gates and Steve Jobs are one of the most
successful entrepreneurs. They believed in their own strategy and performed tasks with
full dedication and worked hard to achieve their goals and objectives (Ibrahim, 2014).
Traits
There are unique qualities in successful entrepreneurs by which they have courage to take
risk and enhance their enterprise. These are as under-
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 Self motivated:- Successful entrepreneurs like Bill Gates and Steve Jobs are highly self
motivated. They adapt challenging situation without help of any expert. They have
complete vision, mission and objectives and they follow the path of their visual sense. Competitive spirit:- Entrepreneurs have competitive spirit and they made new and
innovative plans to beat their competitors. They enjoy situation and they like to triumph.
Skills
Successful entrepreneurs have bundle of knowledge and skills, they can use in their
enterprise. Businessperson should have following skills-
 Find and Manage people:- When an entrepreneur start their business, they require more
persons so, they have to select suitable person for a right work (Rahayu, 2015). Bill Gates
and Steve Jobs hired more skilled and highly qualified employees in their organisation.
 Focus:- There are so many distractions came in the success path but successful
entrepreneurs are focused toward their goals and objectives. Bill Gates is a very good
example of this as they focus on their goal and become the richest person in the world.
P6. Aspects of entrepreneurial personality that reflect motivation and mindset of entrepreneur
Personality refers to the set of traits or characteristics that an individual have and which
make it different from other. A success of entrepreneur has largely affect by the personality that
they poses as it reflect the mind set and motivation that a person have which foster them to move
ahead. Therefore, personality plays a major role in the action an entrepreneur performs while
operating their business. The personality factors are divided into five categories according to the
theory of Big Five Trait model of personality which describes of different types of persons an
personality factors they have. Following are the factors include in this model: Openness:- This factor includes the persons who are open to gain experience and always
try new things in order to gain knowledge. These are more curious about adopting new
way of doing work. Entrepreneurs who stand high at this trait are tend to be more creative
and also focuses on bringing innovative approach in their business (Андріїв, 2017).
Steve Job always try to bring new innovation in their current model that was the main
reason behind their success. Conscientiousness:- People having this personality traits are tend to be thoughtful, have
good impulse control and goal oriented. They more believe in planning so that they can
finish up their work in right way and on time. Entrepreneurs who stand high at this trait
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are more strategic oriented as they perform their action which are preplanned. Steve Jobs
always makes plays and discuss with their partner in order to achieve higher success. Extraversion:- This personality trait includes attributes like sociability, excitability,
talkativeness and emotional expressiveness. People who stand high over this trait are
outgoing and more energetic as well as they like to being around people. Entrepreneurs
who stand high at this traits are good at communication and always tries to motivate their
team member. Bill gates always communicate their objectives and strategies with their
employees to motivate them for performing tasks effectively. Agreeableness:- This dimension includes traits such as trust, affection, kindness etc.,
peoples having this trait are tend to be cooperative while who stand low at this are tend to
be competitive and manipulative (Šutalo and Mihaljević, 2014). Entrepreneurs who stand
high at this trait, take care of their team members and help them whenever required. Bill
gates always take care of their employees and corporate with them by providing them
flexibility in their work.
 Neuroticism:- It includes sadness, emotional instability, moodiness etc. People having
this trait tend to be experience mood swing, sadness, irritability and anxiety.
Entrepreneurs who stand low at this trait are tend to have more emotional stability. They
don't feel pressure of their work and have the ability to deal with their stress.
TASK 4
P7. Background and experience can hinder or foster entrepreneurship
There are various situation and challenges that may be faced by an entrepreneur while
operating their business which either hinder or foster a person to move ahead. Successful
entrepreneur is one who learn from their past experiences and use them to move ahead for
achieving higher growth. There are two successful entrepreneur who faces challenges in their life
which foster them and they achieve higher success named as Bill Gates and Steve Jobs.
Bill Gates belongs to a family where his father is senior lawyer and his mother work as
executive in major bank. He belongs to a well educated and wealthy family which always foster
them to get success in their educational as well as carrier life. This make him wealthiest man of
world. Apart from this Steve Jobs faced several difficulties in their childhood. But these all past
experiences foster him to bring something new and work hard. Both entrepreneurs inspires others
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from their success stories to work toward converting their imagination into reality by
establishing their business. Factors that foster or hinder an entrepreneur are as follows: Background:- Factors like family, culture and environment in which a person live have a
huge impact over the personality and thought of an individual. Bill Gates belongs to a
business class family which always fostered him to perform well in their career. Education:- It refers to the process of receiving knowledge, skills etc. that teach a person
how to behave in a particular situation (Ibrahim, 2014). Bill Gates belong to an
educational family background and parents who achieve success in their life foster them
to achieve more.
 Past experience:- Situations faced by a person in past also affect its present and future
actions. A person must learn from past action that help in avoiding future mistakes. Steve
jobs have various bad experience in their life which they took as positive factor and use
toward achieving heights.
CONCLUSION
From the above given project it can be summarized that entrepreneur is a person which
have an ability to bring innovative and unique idea within a market to fulfil the need of people.
They contribute toward the economy of a country up-to large extent and also forms a major part
of it. An entrepreneur posses several skills or traits that make them different from other and
foster them to achieve higher success in marketplace but apart from this there are some factors
such as background, education and experience that a person have also affect their action by
hindering or fostering them to perform a task.
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Research in Industrial Engineering. Springer International Publishing.
Jones-Evans, D. and Klofsten, M. eds., 2016. Technology, innovation and enterprise: The
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Šutalo, V. and Mihaljević, B., 2014. Enterpreneurship and promotional communication in the
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The role of SME's in the UK Economy. 2018. [Online]. Available
through:<https://thoughteconomics.com/the-role-of-smes-in-the-uk-economy/>
The 5 Types of Entrepreneurs. 2018. [Online]. Available
through:<https://www.entrepreneur.com/article/244210>
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