The Role of Small Firms in Entrepreneurship

This assignment examines the significance of small firms within the entrepreneurial landscape. It highlights how these ventures contribute to job opportunities, increased profits and revenue, and an improved living standard for individuals. Furthermore, it delves into the essential skills and characteristics that enable entrepreneurs to thrive in their endeavors.

ENTREPRENEURSHIP
AND SMALL
BUSINESS
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
Task 1...............................................................................................................................................3
P1 Different types of entrepreneurial ventures and typology of entrepreneurship ...............3
P2 Similarities and differences between entrepreneurial ventures.........................................6
Task 2...............................................................................................................................................8
P3 Interpretation and assessment of statistics for showing impact of micro and small business
on the economy.......................................................................................................................8
Impact of SME on economy. ........................................................................................................10
P4 Importance of small businesses and business starts-ups in growth of social economy
..............................................................................................................................................11
Task 3.............................................................................................................................................12
P5 Characteristic, traits and skills of successful entrepreneurs .........................................12
P6 Assessment of the entrepreneurial aspects personality reflect entrepreneurial motivation 13
Task 4.............................................................................................................................................14
P7 Background and experience can hinder or foster entrepreneurship................................14
Conclusion ...................................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
An individual who has the capabilities and potential to establish a new product and
operate a small business is known as an entrepreneur. The entrepreneur analysis all the risk and
then launch a product in market to gain high rewards. Along with this an entrepreneur is an
innovator who explore the opportunities in the market and convert them into potential product
and service. Apart from this they play a key role in the development of a country economy. As
creative ideas help to develop a new product in the market. This ideas work as a foundation to
establish and introduce a new venture in the market this is known as entrepreneurship. The
implementation of new and innovative creative ideas in regards to start a new small business by
adopting financial risk to achieve more profits. In this report various types of entrepreneurial
venture are covered which relate with different types of typologies and their relation with
entrepreneurship (Bridge and O'Neill, 2012). Under this report the similarities and differences
are examined between different ventures. Moreover the impact of small and micro business on
social economy are mention in this report. At last the characteristic and skill of an entrepreneur
are compare with the managers. As it help to know that how entrepreneurial personality
differently behave to increase their motivation.
Task 1
P1 Different types of entrepreneurial ventures and typology of entrepreneurship
Entrepreneurs- The entrepreneur are those individual which are responsible to develop a
new venture in the market. With the support of this business they offer various product and
services to customers in exchange of money. Entrepreneurial business houses are established by
entrepreneurs to earn more amount of money and to live a comfortable life. Small venture are
owned by private individuals which work to achieve their own purpose and goals. Several types
of entrepreneurial venture are segment on the base of its scope, size and purpose (Burns, 2016).
Entrepreneurial activity- The entrepreneurial activity is a process of the business in
which firms generated their value by developing various economic activity. This type of
activities are associated with unique and innovative ideas that help a business to expand its size.

Creative and unique ideas are converted into reality by the entrepreneurs. As this help them to
make a new product and service for customers and to operate a new business. New ventures also
help a country to develop more employment opportunities for its citizens.
Different types of venture
Small business: The small business are concerned which are operate and owned
privately. In this there are small number of employees and the minimum amount of sales is also
low. Like in the case of small business entrepreneur operate its business activity in a local
market. The major goal of small business is to earn more amount of profit and to live
comfortable life. This business cover a small area of market. So the size and scope of this
business is very low. As this new venture or small business operate its activities for a specific or
niche market. Example- Brightstar financial limited operate their business in UK. They provide
effective solutions to different intermediaries and also to direct consumer to manage their wealth.
Scalable starts-ups business or social enterprise- Under the Scalable starts-ups
business, entrepreneur introduce their business with a motive to change the world. Like in this
scalable starts-ups their funds comes through venture capitalists. As this help company to hire
best employees that help company to obtain high profits. Apart from this scalable business create
a big change in the market or sector in which the business is started. This types of business are
defined with a purpose of social development. In social enterprise entrepreneur and business
developed a new idea which is used for the welfare of society. Example- Studio Graphene is the
example of scalable start-up business which operates their business in designing of digital
products along with application development.
Large business- This type of entrepreneurship develop new ways to make a product and
they offer more innovative products to customer. As it help large companies to gain a
competitive advantage. Major motive on which behalf large company accomplish their task is
that to always ready to adopt a new technology. So company share and capture more area of
market for its products & services (Drucker, 2014). Large scale operate its business in more than
one country or state. The large amount of money is invested by large companies to complete its
project and task. Example- Marks & Spencer is the best example of large organisation they are
operating their business in UK as well as other countries also. They offer quality foods, clothing
and home products to their customers for satisfying their needs.
Typologies of entrepreneurship

Typology means process of classification of several essential elements which are based
on certain characteristics, like their physical or contextual characteristic. In case of
entrepreneurship, there are several typologies mentioned below:
Serial entrepreneur : It is referred to an individual which involves in creation of new
ideas regularly and performs business activities to make these ideas real. However, a new
business is only started by these individuals if their previous venture has been successful.
Social entrepreneur : This typology of entrepreneurship deals with individuals with
innovative capabilities which they use in order to ensure positive change within a society. All the
money earned by them is invested in business processes which resolve societal issues.
Lifestyle entrepreneur : Within this type of typology, an entrepreneur begins a venture
in relation to fulfill their ambition and hobbies. Mostly successful entrepreneurs become
Lifestyle entrepreneurs to achieve their own passion and dreams rather than gain profit.
Small business or entrepreneurship include different typologies that are associated with
the expansion of business to grow a business more effective. Some of the typologies are as
follow:
Lifestyle enterprise- This enterprise work to improve the life standard of the local
people which is origin country of a company or business. With providing more job opportunities
for the individuals and inferior quality product or service to its customers. Company improve its
brand image as well as living standard of local peoples. Apart from this male typologies are
those which are operated by men as it help a business to monitor the financial risk for a
company. As the term female typologies show that it is owned by females with a motive to
maintain healthy relation with the other employee's of the company.
Growth firms- This type of companies are established themselves to earn large amount
of profits for its new venture. Most of the entrepreneur of such firm develop new ideas by which
they improve the productivity of their products and services. As this ideas are generated to
satisfy demand and need of the customer. Along with this it also help to increase the value of
their products in the market (Kirzner, 2015). The growth firms falls under the small and large
organisation of a company.

Survival entrepreneurship- The basic goal of survival entrepreneurship is to retain tin
the market for longer period in order to earn profits for longer periods. Along with this the
another goal is to meet financial needs through managing the unnecessary cost. So that they are
able to formulate effective plans to overcome from different problems in the upcoming future.
Speculative model- In this type of entrepreneurship an organisation analysis different
needs through which they show the potential of employees. Usually an entrepreneur develop this
model to sell with more profits and exit from the idea of them. It is the market equilibrium in
which similar speculating and promoting both work together for the organisation.
P2 Similarities and differences between entrepreneurial ventures
Similarities and difference in various types of entrepreneurial venture are as follow:
Differences
Basis Small business Large business Social enterprise
Characteristics As in a small business
there are low of
resources that are
enough to operate its
business activities.
Like Furenal care
company collect
sufficient resources
through which they
match its business
activities with the
decided benchmark.
The large business
need a lot of money to
make their finished
products. It include
large machines, huge
inventory and large
number of workforce.
Like Tesco operate its
business with a large
number of workforce.
So they complete
business activities with
more efficiency.
Social enterprise make
its resources with
different sources. Like
social company collect
money by government.
While human
workforce is gain by
company through
voluntary forces.
Example- management
of NHS work to do its
business activities with
effectiveness.
Purpose The major purpose of
small is to earn
sufficient money by
which they spend their
life comfortably. Like
Large business work
to fulfil the purpose
for make surplus
profits. The innovative
ideas help tesco to
Social enterprise work
with a purpose to
provide maximum
benefit for the people
of society. Like in this

local employee's of
fuernal generate
money by which they
earn a good livelihood
for their families.
earn more amount of
money. So the R&D
team always focus to
make new products for
the company.
case NHS employee's
make efforts by which
they provide large
benefits to customers.
Scale This business are
known as small
business because it
operate their business
on a small scale with
the investment of
small amount of
money. Like fuernal
care operate its
business in a local
market.
Large area of the
market is covered by
the large company to
operate its business
like tesco invest large
amount of money to
complete its business
activities.
The social enterprise
work for providing
more benefits to the
local people. So the
NHS operate its
business activities
under a small area.
Similarities
Basis Small-business Large business Social enterprise
Skills The small business or
new venture provide
training to its
employees. As it help
them to lead a good
life for their business.
Example- Fuernal care
provide training to its
employee as it help
them to increase their
skills.
In the large business
company make
innovative products
that satisfy need of
people. Like tesco
providing more job
opportunities in
different sectors which
help employee's to
learn more number of
skills.
In the social enterprise
there is a large number
of workforce which
work together to
achieve a common
goal. Like in NHS
employee's teach their
skills to their co-
workers also.

Society upliftment Small business provide
different job
opportunities to the
local individual which
help them to earn a
good amount of
money and to improve
their lifestyle. Like in
furernal care vacant
job help employees to
earn more income.
This business provide
more job opportunities
to people. As each
individual want to live
a life comfortably. In
the case of Tesco there
are more number of
workforce is working
that help company to
earn a good income for
their business.
Social business
provide more services
to the people with a
motive to increase the
quality of local people.
Example- The
employee's of NHS
work together that
provide benefits to
society as well its
employee's also.
Meeting the needs Small business or
entrepreneur develop a
product or service that
satisfy the need and
demand of customer.
This will help
company to earn more
amount of profits. The
fuernal care
employee's research
about the market and
then launch a new
product.
Large business
produce their product
to satisfy the need as
well the demand of
customer with a high
level of satisfaction. In
case of tesco the R&D
team make innovative
products to match
product with customer
needs.
Social enterprise are
formed with a way that
help a business to
grow its business that
match with the needs
and demand of
customer. In the case
of NHS employees
always make a product
which fill demand of
society people.
Task 2
P3 Interpretation and assessment of statistics for showing impact of micro and small business on
the economy
The business organisation play a important role in the developing the economy of a
country. Entrepreneurs provide maximum contribution to the government for improving the

economic condition of a country (Koellinger and Roy Thurik, 2012). Like they provide tax
along with this new ventures help a business to increase the GDP of a country. Some types of
business are mention as follow:
Micro enterprise- A micro enterprise is the small business in which there is a small
number of people work to complete the task of a company. In a micro enterprise there are less
than 10 employee's and owner start its venture with a little investment. Large number of
microenterprise will analysis the market and provide quality goods to its customer.
Small enterprise- In a small number of organisation the maximum number of
employee's is 50. This employee's help the company to generate the revenue from zero to 5
million. As this firm are generating revenue so impact the employment of a country on a low
level.
Medium enterprise- The medium companies operate its business with the maximum
workforce of 250 employee's. As the turnover of a medium enterprise is not more than 22
million. A large number of job opportunities are provided by the medium enterprise with a good
amount of turnover. As they operate their business on a national level (Kuratko, 2016).
Large enterprise- The large companies operate its business on global and national level.
As to complete several activities that are operate by business there is large number of workforce
is required. So in this case company employee's more than 250 employee's with a minimum
turnover of 22 million. This firms heavily impact on the economic development of a country
because they contribute large amount of tax for their business.

Impact of SME on economy.
Illustration 1: Number of Enterprises, 2013-2018
(Source: UK business; activity, size and location: 2018)
Regional impact- SME leave a impact on regional economy by providing job
opportunities to the regional people. This help the region to solve the unemployment issue in a
particular region. Numerous jobs are only provided only by medium size of enterprise which
help region to improve their which help to development their region. As this enterprise leave a
positive impact on region or area.
National impact- SME impact on the national economy of a country because they
perform its business operation at a local level. In this case company invest their money in a
developing or developed a country. This help company to increase its profitability and a nation to
develop its infrastructure (Landström, Harirchi and Åström, 2012). As reflected by the data,
there is a rise witnessed in the number of SME's within the UK, which would result in effective
growth of the UK economy. In present scenario these enterprises are working as a backbone of
the UK.

Local impact- Micro, large as well as small enterprise first start their business in the
local market. Whenever a new venture is start it is the research of market. After that entrepreneur
develop a product in which they provide employment to a large number of local for the
manufacturing of a product.
Some facts and current data about impact of small and micro business on UK economy.
 In overall UK, specifically London contain the highest number of SME. According to the
department of National statistics UK there are 1,500 small or micro business are present
among 10,000 residents in employees.
 The another factor determines that there are more than 1059 businesses are present in
organisation that relates with South West and East of England.
 In the year 2018 UK achieved 4% growth rate which determines that they play an
essential role in the growth of economy. They majorly cover all parts of UK which
includes North East and West. Wales as well as Midlands.
P4 Importance of small businesses and business starts-ups in growth of social economy
Social economy relates with the third sector in which there is mixed economy of private
and public sector is present. Usually it is related with cooperative organisation that work not to
earn profits. Further this help an country in other ways like employment generation and by
fulfilling social goals of the organisation. Example- Oxfam work as NGO in UK with the motive
of removing poverty and raise the living standard of individuals. In present scenario there are
more than 20 voluntary organisation are working under Oxfam that help to remove the poverty
form society.
In present scenario SME are working as a strong base for a country which provide a huge
revenue and employment in a country. Some of the importance of small-business in context of
UK are as follow:
Employment- Start-ups and small business both work in generating new job
opportunities in the market or sector (Naudé, 2014). Apart from this job not only benefited local
employee's with a survival income but it help them to increase its skills and capabilities. With the
help of improved skill employee's also help company in generating new ideas to perform the
task.
Improve living standard- Small business are very important for the country. In order to
develop the living standard of the society. It is done with a base that help company to provide

high quality products or services to its clients. As the purchase of power of customer is increased
because this firms are providing employment opportunities in a specific country. So with high
income power employee's want to purchase the goods that provide inferior quality and luxury
experience to the customer.
Economic growth- SME and business start-ups are being quite effective towards
enhancing the economic growth within the UK. For instance, these firms have a turnover more
than £1.6 trillion. Moreover, they are also providing effective opportunities for around 25 million
people all over the country.
Task 3
P5 Characteristic, traits and skills of successful entrepreneurs
The characteristic and skill of an entrepreneur is totally different from a manager. This
trait and skill help a manager in order to develop new creative idea for the business. Two
entrepreneur one is Elizabeth Gooch and other is Tom Mercer of MOMA food are chosen for
this report which are as discussed below:
Characteristic
 Self belief and hard work- The self belief help an entrepreneur to perform the work with
more effectiveness. The hard work is the continuation of efforts by which Elizabeth and
and Tom Mercer carry their work with more confidence. This also help customer to make
an effective decision to perform their business (Read, S., and et. al., 2016) .
 Passion- Entrepreneur is a person who is always passionate about its business operations.
This passion help them to complete their work responsibilities without any boredness. So
this characteristic help Elizabeth and Tom to monitor their work on regular basis. As
compare to business manager it is totally differ because a manager loose his patience with
create a barrier at time of its decision making.
Skills
 Innovative thinking- This skill help an entrepreneur to develop an creative idea for their
work. This ideas and unique thought process also help to resolve the issue in its
workplace. This innovating thinking is helpful to overcome from problems and to achieve
desired success for the business (Scarborough, 2016) .

 Leadership- This skill is most essential for them as it help the entrepreneur to lead their
teams and move their efforts towards desired goals. This skill exist in Tom and Elizabeth
through which they provided their support to employee's. As a manager teach and guide
about the work but they not motivated the performance of an employee.
Traits
Confidence and disciplined- Every entrepreneur is always more confident about its
work. As in this case Elizabeth and Tom are more motivated and more confident about its
decision. While a business manager is not sure think many times to take a decision. A leader
always work in a sequential and disciplined process. While a manager do the work with a
analytical software. This bring low confidence in its decision.
There is a vast difference between the typical business managers and successful
entrepreneurs . This is because, it is quite tough to find managers with exceptional innovative
capabilities as well as appropriate mindsets, which is seen in successful entrepreneurs. Moreover,
there is a lack of discipline as seen in typical managers in comparison to successful
entrepreneurs, which restricts their actions during complex situations.
P6 Assessment of the entrepreneurial aspects personality reflect entrepreneurial motivation
Mindset refers to the set of attitudes and belief systems which is inculcated within an
entrepreneur and which is heavy inflouencer to the work done by the individual. There are
different types of mindset within an entrepreneur, which are mentioned below:
 Business Mindset
 Social Mindset
Growth Mindset
Entrepreneur characteristic and skills also represent the entrepreneurial motivation and
mindset. Several factors are represented to show motivation and mindset of an entrepreneur as
follow:
Openness- The word openness include emotion and idea of a person (Trimi and
Berbegal-Mirabent, 2012). This aspect show the curiosity and creativity of an entrepreneur that
help to take better decision for their business. It is also helpful in learning new things that help to
face different challenges in future. This aspect is quite effective in relation to motivating an
entrepreneur in order to stay independent in their decisions and voicing them out effectively.

Conscientious- This factor refers to the continue growth of the entrepreneur through
which they complete their goals on regular basis. In this they adopt to learn new things through
which they increase more value in their products. This results that there is increase in market
share of organisation.
Extroversion- It say that an entrepreneur is always energetic and talkative to do a work.
They are always social which help them to maintain good relation with other co-workers. This
also state that an entrepreneur is always co-operative and help other employee's also to complete
their work with in a minimum time.
Agreeableness- This state that entrepreneurs sometimes behave negative towards a
random situation. This elements of the entrepreneur reduce employee's performance. As by
avoiding this element entrepreneur maintain healthy relation and create a positive working
environment in its working place.
Neuroticism- This factor is simply relates with emotional stability of an individual. It
undertakes factors such as fear, happy, stress and depression that show the emotions of
entrepreneur. It is essential for them to control this factor because it impact on their performance.
The personality has certain aspects which appropriately ensure entrepreneurial
motivation, which are as follows: Need of Risk Taking: This personality trait is quite common within successful
entrepreneur and this need drives them to take better risks which is associated with
entrepreneurial motivation. Thus, if an individual feels that risk taking is necessary and
he acts upon it, it motivates them to manage and run their business more effectivley.
 Need of Innovation: Another aspect which drives entrepreneurial motivation is need of
innovation. It is highly necessary for an individual to innovate their methods and
processes, so as to appropriately and effectively drive their company forward. Thus,
having this need motivates these individual to develop new apporaches with respect to
running their firm appropriately.
Task 4
P7 Background and experience can hinder or foster entrepreneurship
Elizabeth Gooch

Background- The background of this entrepreneur has been quite effective in relation to
driving the entrepreneurial instinct effectively. Her family supported her every decision, which
led to her working at the age of 18 in the HSBC bank. One year later she started to work with a
consultancy firm. Soon Elizabeth change the mind and collect or borrow money form family and
friends and started her own company. This company provide financial services to its clients
(Bosma, N., and et. al., 2012). Later after some time company implement technical changes in
the business and then Elizabeth started to raise funds from the market to expand its business.
Thus, such motivation from family and peers regarding achieving one's own goals foster
entrepreneurship effectively.
Experience- At the time of early business, Elizabeth faced several problems such as low
funds, unsupportive friends etc. But the prior work experience help her to solve various issue and
with these it determine success of her company. The HSBC work experience help Elizabeth to
gain potential customer for her business. With sufficient funds she become an successful
entrepreneur in today era.
Tom Mercer
Background- Tom Mercer's father was quite supportive of the entrepreneur to study
effectively and enhance his knoweldge regarding several essential aspect. Tom Mercer
completed graduation degree from the University of Cambridge. Tom work as a management
consultant in the Bain and Co. which is well known company of the London. At the time of
doing several jobs Mercer always thinks that how to start a new business. So with this thoughts
and observation he found the idea to do open a food business in the market (Wright and Stigliani,
2013).
Experience- Tom has the work experience of doing a job. This aware him about the
struggle that are faced by people in search of healthy breakfast. While at the time of search Tom
was also late to go for work. So at initial time of the business Tom cut fruits at night and put
them in bottles for selling them in the early morning. This experience of customer interaction
help him in the developing stage of his business to solve various issue for the future.
Conclusion
From the above report it has concluded that entrepreneur are those people who develop
new ideas for the customer. This ideas help them to satisfy the need and demand of the customer.
There are various types of ventures are present in the market. Small firms provide more

opportunities for the job and also increase the profits and revenue of the company. With this
employment opportunity the living standard of different people is also increased. So to become
an successful entrepreneur there are various skill and characteristic that help them to grow their
business.
REFERENCES
Book and Journal
Barringer, B.R., 2015. Entrepreneurship: Successfully launching new ventures. Pearson
Education India.
Baum, J.R., Frese, M. and Baron, R.A. eds., 2014. The psychology of entrepreneurship.
Psychology Press.
Bosma, N., and et. al., 2012. Entrepreneurship and role models. Journal of Economic
Psychology. 33(2). pp.410-424.
Bridge, S. and O'Neill, K., 2012. Understanding enterprise: Entrepreneurship and small
business. Macmillan International Higher Education.
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
Kirzner, I.M., 2015. Competition and entrepreneurship. University of Chicago press.
Koellinger, P.D. and Roy Thurik, A., 2012. Entrepreneurship and the business cycle. Review of
Economics and Statistics. 94(4). pp.1143-1156.
Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Landström, H., Harirchi, G. and Åström, F., 2012. Entrepreneurship: Exploring the knowledge
base. Research Policy. 41(7). pp.1154-1181.
Naudé, W., 2014. Entrepreneurship and economic development. International Development.
Ideas, Experiences and Prospects.
Read, S., and et. al., 2016. Effectual entrepreneurship. Routledge.
Scarborough, N.M., 2016. Essentials of entrepreneurship and small business management.
Pearson.
Trimi, S. and Berbegal-Mirabent, J., 2012. Business model innovation in
entrepreneurship. International Entrepreneurship and Management Journal. 8(4).
pp.449-465.
Wright, M. and Stigliani, I., 2013. Entrepreneurship and growth. International Small Business
Journal. 31(1). pp.3-22.
Online
UK business; activity, size and location: 2018. 2019. [Online] Available Through:
<https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/
bulletins/ukbusinessactivitysizeandlocation/2018>