Role of Small Businesses in Economic Growth

This assignment delves into the crucial role played by small businesses in fostering economic growth. It examines various aspects, including job creation, innovation, and community development, highlighting the impact of small business policies and initiatives on overall economic prosperity. Students are required to analyze relevant research and data to support their arguments.

Entrepreneurship
and small business
management

Table of Contents
INTRODUCTION..............................................................................................................1
PART 1.............................................................................................................................1
P1 Types of entrepreneur ventures and its relation with types of entrepreneurship....1
P2: Role, characteristics of different ventures..............................................................3
P3 Impact of micro and small business on economy...................................................5
P4 Importance of small business and business start-ups in economy development. . .7
PART 2.............................................................................................................................9
P5 Characteristics and traits of successful entrepreneur.............................................9
P6 How personality of entrepreneur act as a motivational tool..................................10
P7 Background and experiences which can hinder or foster entrepreneurship.........11
CONCLUSION............................................................................................................... 11
REFERENCES...............................................................................................................11

INTRODUCTION
Small business companies are those associations which is owned by private
companies, sole merchant and organizations having least workers with less income. In
fact enterprise and private company administration assumes an exceptionally famous
part in uplifting the economy of a nation by presenting creative items. Business
visionary is a man who handle or manage an expansive and little undertakings whose
fundamental intention is to satisfy the request of different purchasers. This report is
grouped into two sections for clarifying distinctive sorts of association by demonstrating
its parts and obligation towards advancement of entire society. In additional, it also
going to highlight the great qualities and attributes of different effective business
visionaries (Bridge and O'Neill, 2012). Thus, talented and experienced proprietor
assumes an exceptionally famous part in accomplishing the objectives and targets of an
organization by executing impressive schemes. Finally, this report is about
administration of independent ventures which are expands step by step due to
emergence of advanced technology for acquiring maximum profit.
PART 1
P1 Types of entrepreneur ventures and its relation with types of entrepreneurship
Entrepreneurship: Entrepreneur is a person who sorted out and deals with any
business, especially a private company generally with impressive strides and hazard. It
study both as how new business are made and in addition the real procedure of starting
(Burns, 2010). The fundamental destinations of business visionary is to make greatest
benefit from his business operation by taking appropriate measures.
Entrepreneurial endeavours attempt to concentrated on render consultative
administrations to beginning and mid phase of the organization. It is only usage of
accessible assets and planning everything by considering risk and prizes of his and her
organization for example public, private and social. It is about era of new thoughts and
development instead of a current plan of action. Part of endeavours are changes from
various phases of the organization.
Ventures of entrepreneur:
1

Lifestyle venture They are the individuals who aid given income and ceaseless
to its proprietors on the premise of preservation methods for exchange administration.
Lifestyle entrepreneur invest their money to make market more competitive.
Managed growth venture: They have stable development which are having
constant venture for its speculators and endeavoured to get direct development.
Through presenting fresh goods in market at standard premise (Carland and Carland,
2015).
Survival Ventures: They are fundamentally new in the market and just added to
the individuals who are living as proprietor of the organizations.
Aggressive growth venture: such sort of endeavours depend on recent
innovation and have capacity for advancement and development in future.
Scope of entrepreneurship :
Independent company give sound degree to the development and advancement
of exercises (Dennis Jr, 2011). They have great probability and wide extension of
advertising administrations instead of manufacturing a product that is the main reason
behind maximum profitability, substantial effectiveness and less work turnover of small
business enterprise. It is grouped into following areas :
Industrial sectors: Small scale businesses are assumed an imperative position
in industrial sectors as they contribute over 40% in net modern areas.
Agriculture sectors: As wide extension for entrepreneurial exercises in rural
areas. Rural business visionary are awesome open doors in ranges of cultivating,
agribusiness and promoting (Down, 2010).
Service sectors:- because of quick extension benefit areas are increasing
gigantic significance. It give immense measure of offices like inn, voyagers
administrations and so on.
Typology are:
1. Private venture Entrepreneurship: In the present time different number of
business visionary and their start-up in UK are said to be still independent ventures. It
has been seen that 5.7 million little operations in different parts of United Kingdom. It
has been watched that 99.7% of organizations and their workers are half of individuals
2

are include as non-political somebody. The primary piece of this kind of wander are they
are generally worked by claim speculators that would include in change the business.
2.Scalable start-up:- Just like little scale organizations they are those individuals
or business visionaries those begin an organization from beginning day on that vision of
organization is changes with their inventive thoughts (George, and Bock, 2011). Their
fundamental point is to pull in financial specialists to put resources into their business to
wind up noticeably more proper and effective to contend with other organization.
3. Large company Entrepreneur:-They have a place with huge organizations
whose life cycle is limited. They are become through maintaining development, by
presenting assortment in their items. Changes in client taste, innovation and so on this
kind of wander depend on expanding their business and also benefit in contrast with
different organizations.
4. Social business enterprise:- This sort of wander are trend-setters since they
know for making item and administration that would serve society and their issues
(Gorgievski, Ascalon and Stephan, 2011). The fundamental target of this sort of wander
business person is to make the world a decent place as non-benefit and benefit and so
forth.
P2: Role, characteristics of different ventures
Basis Small Business Social enterprises
Definition
Role
Characteristic
s
According to this they are
represented as a medium size
organization which is managed and
regulated by small scale.
First and foremost role is to
generate maximum revenue with
the use of available resources (Hall,
Daneke and Lenox, 2010).
Minimum resources with less
It is fully based on society by
introducing innovative and
creative products for satisfying
the needs or desires of overall
society.
Their main and leading role is to
create awareness about product
and security measures for
protecting society from any
exploitation.
3

Objectives
control of governing bodies.
Main objective is live their livelihood
more comfortably by maximizing
their profit and trying to develop
their enterprise more and more.
Controlled and managed by
advisory bodies and provide
necessary resources for uplifting
the society.
Their main motive is satisfy or
fulfil the needs of weaker
sections of society by
conducting various social
welfare programmes (Leitch,
Hill and Neergaard, 2010).
Differences between Scalable start-up and large company.
Basis Scalable start-up. Large company.
Definition Organizations comes under this
category is only believe in
attaining their vision by proper
planning process.
Large enterprises are having
finite cycle. It means they offer
different goods due to changes in
customer taste.
Role Identifying repeatable and
scalable model.
Their main role is to offer
appropriate facilities in their
products by adding unique
features.
Characteristics Paying full attention on making
maximum ventures by expanding
their business (Ligthelm, 2010).
It is consider as a continuous
process which reforms according
to customer taste and
preferences.
Objectives Major objectives is to seek the
attention of various investors on
the basis of their investments.
Their main focus is to
manufacture goods and services
according to consumer taste with
the use of advanced technology
4

in their business operations.
5

Comparison :
Small enterprises Medium enterprises Large enterprises
1. Small business
organization requires
minimum number of
workers for example 50 or
less than 50.
2. It required minimum fund
for establishing their
business.
3. Absence of methods of
performing job role of
business which are related
to SHG (self help group)
Business comes under this
category consist of
employees more than 50
but less than 249
employees for businesses
because there is limit in
medium (Nga and
Shamuganathan, 2010).
For starting this business
entrepreneur requires
average amount of fund.
Governing bodies fully
support to run their
business as well as family
members also to expand
their business in more than
one sectors.
Employees available in
large enterprises are more
250.
Large amount of fund is
essential to establish their
business.
Specialised and
experienced persons are
available to run large
business.
Profit is maximum.
Risk is also maximum.
P3 Impact of micro and small business on economy
There are several number of small business organizations are rises at universal
level which greatly affect an economy of a country because of its vital role played in
upliftment of economy. In fact private company act as a backbone for UK economy
because it helps in creating an employment opportunity. Being proprietor of small
organisation is extremely challenging since they need to confront different troublesome
conditions and circumstance. In this way business person of private company
undertakings are endeavouring to present imaginative thoughts for catching the brains
of various clients.
6

Alongside this, there are number of routes in which undertakings contributed in
monetary advancement in various way which is specified underneath :-
Turnover :- First and foremost impact on economy is yearly turnover of an
association which influence general improvement of a country. It implies that extreme
turnover of an organization demonstrates that there is increment in an efficiency and
demand of a different merchandise and enterprises.
Business :- Emergence of greatest number of endeavours creates maximum
employment opportunity for entire society to raise their standard of living. It implies that
private venture plays a very prominent role in making work for jobless people (Preuss,
2011).
Development :- Innovation is a noteworthy piece of development and
improvement since economy of a country is uplift by introducing unique and creative
goods for seeking the attention of consumers. In extra, development is an after effect of
actualizing diverse thoughts by raising standard of entire society.
Industry :- Emergence of innovative equipments and technology encouarge
people for setting up numerous of ventures by creating diverse thoughts and
assessments which impact economy of a country in each way. Aside from this,
foundation of different businesses and associations is extremely valuable and profitable
for developing general economy country.
Competitiveness:- According to this factor, it has been demonstrated that
because of rise of most extreme number of an association makes an aggressive nature
at a commercial centre by motivating competition between contenders (Sampaio,
Thomas and Font, 2012).
Aside from this it has been comprehended that administration of independent
venture greatly affect an advancement of economy because of its essential part in
development by considering interior and outside variables. Indeed these business
contributed in development process in different way which is expressed as follows:-
1.)Fulfilled the necessities and requests of different purchasers.
2.)Present imaginative thoughts.
3.)Manufacturing of products by considering client taste and inclinations.
4.)Enhance or raise way of life of different people.
7

5.)Make work opportunity.
6.)Accessibility of close substitutes.
(Source:- Impact of Small business on UK economy,2017)
Influence of small business enterprises on local, national, and global economy
Small business greatly affect different level of economy because of its vital role in
world economy is expressed as takes after :-
Local:- Helpful in circulating items in particular locale by satisfying interest of
clients.
National :- Increase in total national output because of introducing inventive
products.
International:- Maximum exchange crosswise over national limits increments
foreign direct investment.
8
Illustration 1: Impact of Small business on UK economy

P4 Importance of small business and business start-ups in economy development
As a senior member from alliance of private company it has been demonstrated
that new businesses and independent company act as a key component for
advancement of any economy (Schaper, and et.al., 2014). Financial development is a
procedure which implies monetary, social and political prosperity of individuals.
Independent ventures fulfils social needs. In UK large portion of the organizations are
of little nature and managed by one individual that implies it contributes a high level of
GDP in economy. Few points are available which depict significance of independent
ventures:-
Creating individual connections: It is simple for independent ventures and new
companies to create understanding and great relations with clients, providers and
representatives since they generally realize that who are they managing. They can
make individual to individual connections those can be demonstrated exceptionally
valuable for economy.
Reacting adaptably to issues and difficulties: Small organizations are more
adaptable in contrast with enormous ventures. Huge elements has set methods for
operations and there can be no change effortlessly. In any case, in independent
ventures if there is any issue or changes then they can react it rapidly ( Storey and
Greene, 2010).
Imaginativeness and advancements: If it is about new thoughts and changes
in any choices or items than it is simpler for little enterprises to take risk since
proprietors of such organizations needn't bother with more endorsements. It is their own
particular choice to make any developments.
Low overheads: In these ventures costs are not all that high because of little
size of operations. Lightning costs, material overheads are lower than different
undertakings. They need to pay restricted lease due to littler start and don't have to pay
much measure of pay in light of less number of representatives.
Future development: These new companies are not generally little. They turn
into an expansive and of incredible significance in economy in national and also global
market and increment reputation of industry. Microsoft can be taken for instance for
development of a small organization to an extraordinary business that has summon
9

everywhere throughout the world. These associations give work to various people and
help in the economy development by expanding business rate of a nation.
Flexibility to evolving condition: According to these organizations they are
prepared and arranged for receiving different changes which may be happened in outer
and interior condition.
Rather than this, private company enterprise and additionally new business start-
ups plays a very vital role in uplifting the economy of country by thinking of various and
interesting thoughts. There are number of reasons which indicates significance of
independent venture and new companies which are said underneath :-
1.)Increment in a total national output because increases in foreign direct investment.
2.)Propelling of inventive items with best administrations.
3.)Satisfying the essential needs of entire society.
4.)Production of work opportunity.
5.)Upgrade of general item to capture the consideration of local and also remote
customers crosswise over national outskirts.
PART 2
P5 Characteristics and traits of successful entrepreneur
Entrepreneurship is a term which characterized as a procedure of outlining,
producing creative items and also in charge of dealing with a vast and private company.
An individual who will oversee specific venture are known as business visionary.
Fundamentally they have a quality and probability of setting up an association and
skills of minimizing business problems by identifying it at a commercial centre (The Role
of Small Business in Economic Development, 2017). Two effective business people
have an exceptional quality with great attributes are named as Mark Zuckerberg and
Henry Ford. Both of them have ability and fighting spirit which encourage number of
people and workers to establish new business by introducing new thoughts. Henry ford
is owner of ford motors company by having numerous of qualities and characteristic
which differentiate him from others. Therefore traits and qualities are mentioned below :-
Qualities of Henry Ford
10

There are numerous of characteristics of Henry Ford which are followed by him
through-out the life which supports them to become world successful business leader in
recent time. Disciplined : Their main focus is to make effective decision by planning
everything in an appropriate and disciplinary manner as well as trying to avoid
hindrances or distractions from their goals and objective. Confidence: Henry Ford are very confident towards their decision making
process. Determination : For attaining their set objectives they need to dedicated towards
their task and activities.
 Open minded : They are very open minded which helps them in decision making
process
Characteristic traits of Henry Ford : Ability to take risk: One of major traits of Henry Ford is that they have quality of
hedging business risk and ability to control it. Craves learning: According to Henry ford learning is a continuous process so he
is always ready to acquired more and more knowledge . Therefore whenever
they feel free from workload then he try to increase his learnings
 Passionate : He is very passionate and determined towards their job role and
trying to expand their business across national borders.
P6 How personality of entrepreneur act as a motivational tool
Business visionaries inspired number of individuals with their life. Any of the
business people can't work without inspiration. Small scale identities are significantly
more appealing because of its one of a kind thoughts of watching business which may
pull in numerous business visionaries to apply different thoughts and advancements in
their business. Despite the fact that, the primary destinations of business people is to
fulfilled their client require by giving wanted result on request of individuals and as
indicated by their taste and decision they can give them offices (What is
Entrepreneurship?, 2017).
Motivational methods are differed from each other. Ability of hedging risk may
influence the organization to make such huge numbers of chances for the people as
11

they to can turned into the proprietor of their own business. Identities like Mark
Zuckerberg, being proprietor of a site as a standout amongst the most celebrated
business visionaries in teaming up individuals of various nations. Mechanical effect has
change the general situation of nations thinking power. His inventiveness in sites help
other individuals to cooperate and associate with each different must be made
conceivable. These all happen as a result of motivational considering and energy to do
innovational exercises.
P7 Background and experiences which can hinder or foster entrepreneurship
From the past information exhibit in history of making such a sort of identities, to
the point that build up a picture of self-foundation and experience they pick up from its
past eras. It help to the business entrepreneurs because it encourage them towards
foundation of new enterprise.
A significant number of the variables that must be considers by numerous of
business people which are connected with background of them. The level of training
was not done at their initial time. As they are national solidness that would offer help to
them to deal with their business.
Characteristics traits of individuals help to increase distinctive learning that may
connected in our business. In a large portion of the circumstance it has be seen that
hazard and rewards are include in beginning another endeavours.
CONCLUSION
From the above report it has been summarized that entrepreneurs are the person
who is responsible for establishing a new business for attaining maximum benefit. In
fact it covers every types of business available in corporate world for fulfilling the needs
and wants of whole society. Main motive of this assignment is to promote the small
business enterprises because they plays a very eminent role in developing the economy
of a nation. Apart from this, it throw some lights on influence of small organization on
local, regional and international by considering micro and macro factors.
12

REFERENCES
Books and Journals
Bridge, S. and O'Neill, K., 2012. Understanding enterprise: entrepreneurship and small
business. Palgrave Macmillan.
Burns, P., 2010. Entrepreneurship and Small Business: Start-up. Growth and Maturity.
Palgrave Macmillan.
Carland, J.W. and Carland, J.C., 2015. A model of potential entrepreneurship: Profiles
and educational implications. Journal of Small Business Strategy. 8(1). pp.1-14.
Dennis Jr, W.J., 2011. Entrepreneurship, small business and public policy levers.
Journal of Small Business Management, 49(1), pp.92-106.
Down, S., 2010. Enterprise, entrepreneurship and small business. Sage.
George, G. and Bock, A.J., 2011. The business model in practice and its implications for
entrepreneurship research. Entrepreneurship theory and practice. 35(1). pp.83-
111.
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.
Hall, J.K., Daneke, G.A. and Lenox, M.J., 2010. Sustainable development and
entrepreneurship: Past contributions and future directions. Journal of Business
Venturing. 25(5). pp.439-448.
Leitch, C., Hill, F. and Neergaard, H., 2010. Entrepreneurial and business growth and
the quest for a “comprehensive theory”: tilting at windmills?. Entrepreneurship
Theory and Practice. 34(2). pp.249-260.
Ligthelm, A.A., 2010. Entrepreneurship and small business sustainability. Southern
African Business Review. 14(3).
Nga, J.K.H. and Shamuganathan, G., 2010. The influence of personality traits and
demographic factors on social entrepreneurship start up intentions. Journal of
business ethics. 95(2). pp.259-282.
Preuss, L., 2011. On the contribution of public procurement to entrepreneurship and
small business policy. Entrepreneurship & Regional Development. 23(9-10).
pp.787-814.
Sampaio, A.R., Thomas, R. and Font, X., 2012. Small business management and
environmental engagement. Journal of Sustainable Tourism. 20(2). pp.179-193.
Schaper, M.T., and et.al., 2014. Entrepreneurship and small business.
Storey, D.J. and Greene, F.J., 2010. Small business and entrepreneurship. Financial
Times/Prentice Hall.
Online
The Role of Small Business in Economic Development. 2017. [Online]. Available
Through: <http://isbdc.org/small-business-in-economic-development/>.
[Accessed on 29th August 2017].
What is Entrepreneurship?. 2017. [Online]. Available
through:<http://www.businessnewsdaily.com/2642-entrepreneurship.html>.
[Accessed on 29th August 2017].
13