Importance of Small Businesses and Start-ups in Social Economy

This article discusses the different types of entrepreneurial ventures and their relation to the typology of entrepreneurship. It also explores the similarities and differences between these ventures. Additionally, it examines the impact of micro and small businesses on the economy and highlights the importance of small businesses and start-ups in the growth of the social economy.

Entrepreneurship and
Small Business
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Different type of entrepreneurial venture and explain how they related to the typology of
entrepreneurship .........................................................................................................................3
similarities and differences between entrepreneurial ventures...................................................5
Interpret and assess relevant data and statistics to illustrate how micro and small business
impact on the economy...............................................................................................................7
Importance of small businesses and business start-ups to growth of social economy. ............10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Entrepreneurship is related to the way of setting up business unit by analysing as well as
evaluating risks which are related to start-up a new venture like financial and other managerial
risk. In simple words, entrepreneurial ventures are started by entrepreneur who are having
abilities to take risk for setting up their own business (Dees, 2017). This report will going to
explain different type of entrepreneurial venture and typology related to their entrepreneurship.
Along with this, similarities and differences within entrepreneurial ventures will going to
elaborate within this. Furthermore, statistics and data will going to illustrate in respective report
for identifying impact of micro and small business on economy. In the end, importance of small
businesses and start-ups will discuss in relation to growth of social economy.
PART A
Different type of entrepreneurial venture and explain how they related to the typology of
entrepreneurship
Entrepreneur is individual person who create new business, bearing risk as well as
enjoying most of the rewards. Moreover, entrepreneur is generally seen as an innovator, source
of new ideas, goods, services and procedures. Apart from this, entrepreneurship related to
procedure of creating new enterprise as well as bearing any of its risk with motive of generating
profit. In simple term, entrepreneurship reflect capabilities as well as willingness of particular
person for handling possible risk. Aim behind all these is to make profit by serving society and
people involved within this (Demil and et.al., 2015). Within every business environment there
are several entrepreneurial ventures who have their own aims and objectives. At wide level
entrepreneurial venture are divided within two categories i.e., public and corporate sector
explanation of these are as follows:-
 Public sector – Within this sector companies are generally hold as well as control through
government and other legal authority of country. Main motive of public sector
organisations is to provide basic services as well as facilities to society of nation such as
health facilities, police, public transportation and many more (Satar and John,2019).
 Corporate sector – This sector is generally known as business sector as well it involve all
such business firm which are managed as well as owned through private individuals with
aim of generating revenue.

Public as well as corporate sector are two major categories which has been seen within
business environment. In addition to this, entrepreneurial venture is further divided within
several type of organisation or enterprises explanation of these are as follows :-
 Large company Entrepreneurship – They are the companies who have large life cycle
as well as operate at high level with huge resources and staff members. Main motive of
large company entrepreneurship is to expand their business for maximizing the amount of
profit earned.
 Scalable Start-up Entrepreneurship – These companies are important part of economy
as they are innovative cluster which have capability to change world in effective manner.
Moreover, scalable start-up entrepreneurship are managed as well as financed through
creative and innovative entrepreneurs (Drucker, 2014). Along with this, there aim is to
develop or create new things which are better as well as more innovative in comparison
of existing. Thus, for scalable entrepreneurship there is requirement of proper finances as
well as knowledge.
 Small Business Entrepreneurship – These corporations are working at small level and
reached up to limited geographical areas. Along with this, small business
entrepreneurship create better job opportunities for local population to that particular
area. There is no much requirement of finance for developing small business and also no
need of huge workforce or assets. Thus, it provide better options of work for financial
weaker section of entire society. Social Entrepreneurship – They are the enterprise which work for welfare of society
and their aim is to create equality at society by fulfilling basic requirement of deprived,
vulnerable and minority section of society. Social entrepreneurship is not running with
motive of generating revenue while they are taking major steps for creating better as well
as healthy atmosphere.
Various type of typology of entrepreneurship
A group of people who have common characteristics as well as features which make
them distinct from other is known as typology of entrepreneurship. There are several type of
entrepreneurship typologies which are based on their characteristics and nature. Some of them
are discussed below :-

 Male entrepreneurship – They are the one who handle as well as manage by male
entrepreneurs. Main characteristics of male entrepreneur is that they have capabilities of
taking high risk as well as able to take big decisions in more easy manner which result in
growth and expansion of business in better manner (DAILY, KIEFF and WILMARTH
JR, 2014). Main focus of male entrepreneur is to focus on maintaining economies of cost
for profit maximisation. Such entrepreneur generally like to run business such as
manufacturing, construction, IT and so on.
 Female entrepreneurship – This entrepreneurship venture are managed and run through
woman entrepreneur who are generally conservative in nature and like to avoid high risk.
Business activities of female entrepreneurship are good in making healthy relation with
their stakeholders, customers, collogues, staff members and so on. Business run by
female entrepreneur are mainly small retailers store and some other service oriented
businesses.
similarities and differences between entrepreneurial ventures
There are several similarities within different entrepreneurial venture i.e., small, large,
scalable and social entrepreneurial venture. Explanation of these are as follows :-
 All these entrepreneurial ventures are making efforts for achievement of their timely
goals as well as objectives within most effective and efficient manner.
 There is proper coordination among efforts of staff members and other activities which
are maintained through entrepreneurial companies within their workplace for maintaining
healthy workplace environment.
 Main aim or motive of these organisation is to serve their customers as well as other
stakeholders by offering them best services, product, experience and many more.
Along with these similarities there is wide differences within small, large, scalable and
social entrepreneurial venture. Explanation of these are as follows :-
Difference between entrepreneurial ventures
The key difference within small business entrepreneurship as well as large company
entrepreneurship is explained below :-
Basis Small Business Entrepreneurship Large company Entrepreneurship
Operation level Small business entrepreneurship Large scale organisation operate at

generally operates at small scale.
They hardly have specialised
division or unit as well as delegation
of task is also limited (Thomas and
Thomas, 2019).
large level and have complex
organisational structure which
include several department as well
as delegation of work within several
division.
Objective Main motive of running small
venture is to earn money for their
livelihood as well as for having
better living standards.
Main focus of large scale
corporation is to expand business
foe generating more and more
revenue.
Geographical area
served
Small business Entrepreneurship
organisation mainly operate at local
level as well as in small
geographical areas. Because they
have limited funds and for running
at global level there is requirement
of huge funds.
Respective organisation conduct
their business activities at national
as well as international level. They
are also known as global
organisation because of their
worldwide working (Tornikoski and
Maalaoui, 2019). Large scale
organisation have sufficient amount
of funds and their motive is to
generate revenue so they are
working at worldwide level.
Risk In small scale enterprise risk is not
high because they are operating at
small level within some local areas.
In large scale enterprises level of
risk is medium because they may
often to manage sell huge amount of
products as well as services because
of its brand value.
Number of staff
members
In this number of staff members are
10 to 50.
In large scale company number of
staff are approx. 1000 and more
than that.
The main difference between scalable start up and social entrepreneurship is discussed
below with the assistance of table :-

Basis Scalable Start-up
Entrepreneurship
Social Entrepreneurship
Objective Main motive of entrepreneur
behind scalable start up is to
make something innovative
(Welter, Baker and Wirsching,
2019).
Social entrepreneurship main
objective is to develop equality
and rising living standards of
people within society.
Nature Scalable start ups are generally
privately owned business
enterprises whose aim is to come
up with best technology for
changing world.
These organisation don't work for
generating revenue and they are
operating for welfare of society.
Financial need For coming up with something
innovative there is requirement
of adequate amount of finance as
well as knowledge.
Social enterprise financial
requirement is totally depended on
their size, scope, objective which
met by donation as well as charity.
Interpret and assess relevant data and statistics to illustrate how micro and small business impact
on the economy
As per the provision of Micro, small & medium scale enterprises development Act, 2016
these organisations are divided within two classes explanation of these are as follows :-
 Manufacturing enterprises – Companies which are involved within manufacturing or
production of goods pertaining to any industry specified within first schedule to the
industries (Ratten, Costa and Bogers, 2019). Although, manufacturing enterprises are
defined in terms of investment within Plant & Machinery.
 Service Enterprise – It involve business firm who are engaged within providing as well as
rendering services and are defined in terms of investment within equipments.
Now a days it is in trend to open or establish micro and small level organisation. In
relation to this, government of every nation is supporting entrepreneurs who have innovative and
creative ideas because their efforts are result in development of economy as well as living

standards. Small scale businesses play essential role within growth as well as development of
country economy by offering better job opportunities and improving overall GDP and growth
rate of economy. Below mention is statistical data or information which shows importance and
impact of small as well as micro business on economy of United Kingdom.
Illustration 1: Percentage of employment, turnover and businesses in different sector of
United Kingdom, 2016
(Source 1 : Percentage of employment, turnover and businesses in different sector of UK,2016)
After going through above mention graphical presentation it can be interpreted that small
scale organisation play important or crucial role within economy of United Kingdom as 93.3% of
private sector business firm is holding through small scale companies (Runyan and Covin, 2019).
For this, Small and medium scale enterprises account for 99.9% which shows essentialness of
small as well as micro business. Apart from this, in relation of employment generation small
scale organisation are contributing approximately 48% of total employment within private sector.
In addition to this SME are accountable for 60% of total employment which is more than half of
all the jobs generate within economy of United Kingdom. Moreover, in simple term small
organisations are offering employment opportunities to approx. 15.7 millions of particular person
in United Kingdom (UK SME Data, Stats & Charts. 2017). Along with this, annual turnover
within UK in 2016 in around £1.8 trillion which is accounted for 33% of total revenue.

Illustration 2: Statistical data about businesses entrepreneurship of UK, 2018
(Source: Statistical data about businesses entrepreneurship of UK, 2018)
Above mention table is showing statistical data related to different business
entrepreneurship related to private sector which operates within United Kingdom. Thus, this
tabular format is providing information related to the number of business operating within
several locations as well as area of UK. In addition to this, allocation related to the number of
staff engaged within small, medium and large enterprises are provided (Essential Facts You
Should Know about SMEs in the UK. 2019). From above mention table it has been concluded
that small as well as micro enterprises are playing important role within growth and development
of United Kingdom economy.

Importance of small businesses and business start-ups to growth of social economy.
Social economy is the term which refers to rich diversity which established by
organisation like foundations, cooperative, associations, social enterprises and several other
institutions. It can be in small, medium and large size which may impact directly or indirectly on
society (Pages, 2019). In addition to this, major goals and objective of social enterprise is to
serve society in appropriate manner by offering them goods and services as per requirement.
Moreover, small businesses and start-ups have positive impact on society and it is possible
through several aspects out of these some are mention below :-
 Financial Independence: Small scale enterprises help in making people financially
independent within every nation because it generate employment opportunities and also
result in raising living standard of people. These organisation are providing employment
opportunities for both male and female such practices developing equality as well as
financial independences for population. Thus, financial independences of individual or a
nation assist in increasing stability of life in appropriate manner.
 Job Opportunities - Establishment of small enterprise result in generating employment
in nation for people at local, state, national and international level (Pelz, 2019). Along
with this, it also result in raising living standards this is because job opportunities
availability in country will leads to economic growth in direct or indirect manner as it
leads to standards of living.
Above mention are some major benefits or importance that an society can get by
development or enhancement of small and micro business enterprise. This will also provide
assistance in growth of a country economy within appropriate manner, thus it result in enhancing
opportunities for society and people living within that. In simple terms, major role played by
small business within growth of an economy involve removal of unemployment, poverty and
also increase GDP as well as growth rate by contributing in productivity of nation (Randolph and
Daspit, 2019). Moreover, role of small businesses is not limited to the local level but also result
in creating advantages at national level also. Thus, by reducing imports of commodities and
enhancing exports that yield better foreign reserve. Small businesses result in improving phase of
production thus enhance gross domestic product of country.

CONCLUSION
After going through above mention report it has been summarised that, in order to
become independent as well as successful there is requirement to establish entrepreneurship unit.
Moreover, government bodies are also supporting those individuals who want to start their own
business because they are contributing in growth of economy at large level. Along with this,
while establishing an entrepreneurial unit there are several problems which entrepreneur have to
go through and these directly impact on their working. Thus, for avoiding such barriers it is
necessary to conduct evaluation as well as analysis of market which will assist in identifying
potential customers along with their, needs, requirement and demand.

REFERENCES
Books and Journal
Dees, J.G., 2017. 1 The Meaning of Social Entrepreneurship. In Case Studies in Social
Entrepreneurship and Sustainability(pp. 34-42). Routledge.
Demil, B. and et.al., 2015. Introduction to the SEJ special issue on business models: business
models within the domain of strategic entrepreneurship. Strategic Entrepreneurship
Journal. 9(1), pp.1-11.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
DAILY, J. E., KIEFF, F. S. and WILMARTH JR, A. E., 2014. Introduction. In Perspectives on
Financing Innovation (pp. 13-16). Routledge.
Thomas, B. C. and Thomas, A. M., 2019. The Business of New Process Diffusion: Management
of the Early Float Glass Start-ups. Routledge.
Tornikoski, E. and Maalaoui, A., 2019. Critical reflections–The Theory of Planned Behaviour:
An interview with Icek Ajzen with implications for entrepreneurship
research. International Small Business Journal, p.0266242619829681.
Welter, F., Baker, T. and Wirsching, K., 2019. Three waves and counting: the rising tide of
contextualization in entrepreneurship research. Small Business Economics. 52(2).
pp.319-330.
Pages, P. W. P. E., 2019. Professor Dr. Rüdiger KabstHuman Resource Management, Small and
Medium-Sized Businesses and Entrepreneurship.
Pelz, M., 2019. Can Management Accounting Be Helpful for Young and Small Companies?
Systematic Review of a Paradox. International Journal of Management Reviews. 21(2).
pp.256-274.
Randolph, R. V. D. G., Li, Z. and Daspit, J. J., 2019. Toward a Typology of Family Firm
Corporate Entrepreneurship. Journal of Small Business Management.
Ratten, V., Costa, C. and Bogers, M., 2019. Artisan, cultural and tourism
entrepreneurship. International Journal of Entrepreneurial Behavior & Research. 25(4).
pp.582-591.
Runyan, R. C. and Covin, J. G., 2019. Small Business Orientation: A Construct
Proposal. Entrepreneurship Theory and Practice. 43(3). pp.529-552.
Satar, M. S. and John, S., 2019. The critical success factors of social entrepreneurship in India:
an empirical study. International Journal of Entrepreneurship and Small
Business. 37(3). pp.309-341.
Online
UK SME Data, Stats & Charts. 2017. [Online]. Available Through:
<https://www.merchantsavvy.co.uk/uk-sme-data-stats-charts/>
Essential Facts You Should Know about SMEs in the UK. 2019. [Online]. Available Through:
<https://www.market-inspector.co.uk/blog/2017/05/facts-about-small-medium-
businesses-in-the-uk>

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