Entrepreneurship and Small Business Management

ENTREPRENEURSHIP
AND SMALL BUSINESS
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
Different types of entrepreneurial ventures.................................................................................3
Similarities and difference between entrepreneurial ventures.....................................................4
LO2..................................................................................................................................................5
Impact of micro and small business on the economy..................................................................5
Importance of small businesses in the growth of social economy...............................................5
LO 3.................................................................................................................................................6
Characteristic traits and skills of successful entrepreneurs.........................................................6
OCEAN Model for entrepreneurial personality..........................................................................7
LO 4.................................................................................................................................................8
Impact of environment on Entrepreneurship...............................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Entrepreneurship deals in the ability to run, develop and organize a business enterprise
despite all the uncertainties in order to make large profit. This can be done by developing a new
business. The individuals who exercise entrepreneurship are given a title of Entrepreneur who is
a person who has abilities and the determination to establish a start-up despite of all the risks to
make much profit (Sohail, Balaraman and Telford, 2019). They believe in developing new ideas
and innovations rather than improving the old ones.
Small and medium sized enterprises are started by some of the individuals who have the will to
take the risks and strive hard to grow it into a bigger organization. The report will begin by
describing the range of entrepreneurial ventures along with their similarities and differences.
This was followed by examining the importance of micro and small businesses in the growth of
the economy. It will also highlight the different aspects of entrepreneurial mind set. The report
will be finalized by describing the factors of background and experiences which fosters and
hinders the entrepreneurship by taking examples of 2 well-known entrepreneurs.
LO1
Different types of entrepreneurial ventures
Entrepreneurship refers to the establishing the new business and an entrepreneur is the
person, who use its skills, talent and capabilities for the start-up of the business. Entrepreneur
venture is the place where the implementation of the new innovation and ideas takes place. It
plays an important role for the early and mid-stages company by providing the ideas and advice
to them (Frederick, 2018). This includes the implementation of the plan and strategy for the
development of the business. Basically there are four type of the entrepreneurial venture. They
are as follows:
Small business ventures: small business are the business which are run and managed by the
small entrepreneurs. Small business includes the business of travel agents, grocery shops,
hairdressers etc. In these businesses the local people and the family members are hired for
running the business. The main aim and objectives for the small business ventures are to earn
profit for meeting the needs of the family members.
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Scalable start-up ventures: the main aim and objective of the scalable start-up ventures are to
change the vision of the world. These entrepreneur thinks that their business can change the
vision of the people. The main objective of the scalable start up is to earn profit rapidly.
Large company ventures: large company ventures are the business which has started with the
higher capital. Large companies consist of many processes like innovation, offering the new
product. These companies might get affect ted due to many reasons such as, customer’s
satisfaction, customers demand, laws and regulations, new techniques and the competitors.
Social ventures: social ventures are the business which are established for the welfare of the
society. The main focus of these business are to fulfil the needs and demands of the society. It
also focuses on the new products and innovation for the betterment of the society. It also
provides various programs for the society, it is considered as the responsible business in the
market.
These ventures are related to the typologies of the entrepreneurship. It means that the
different types of the ventures are inter related to the typologies. Such as, small businesses are
the business which includes their families and the local people, their main motive is to earn profit
for the survival of the families (DeSantola, 2017). Whereas the large company ventures are
related to the capital investment. Their focus is on maximising the profit of the business. Their
objective is to get the higher return from the products and services provided to the customers.
Similarities and difference between entrepreneurial ventures
The similarities of entrepreneurial ventures are to earn and maximises the profit from their
business. The main goal of the public and private company is to be profitable and social ventures
use their profit for the welfare of the society (Katz, 2018).
The difference between the entrepreneurial ventures are:
On the basis of business structure: private limited do not have the permission to sell their shares
openly in the market, whereas public limited can. Public and private limited company focuses on
the profit making whereas social ventures focuses on the serving to the society.
On the basis of size: the aim of medium ventures is for the expansion, whereas large business do
not focuses on the ability to survive, but have control on the market share.
On the basis of ownership: public limited uses their revenue for making the public things, which
is helpful for the society as well.
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LO2
Impact of micro and small business on the economy
Small business is the backbone of the economy of the UK. Small businesses contribute for
the country in many ways, like improving the growth, starting new markets and creating the jobs.
They always bring the fresh ideas for competing in the market. Small business generates large
number of business opportunities, which decreases the number of the unemployment.
Small businesses are owned and functioned in the field of process. The size of the business
can be measured through different criteria, such as the number of the employees. This is
accounted for 99.3% of all isolated sector of business and 99.9% were small or medium sized.
The total turnover was £1.8 trillion, from which 47% was of the isolated sector income. Total
employee rate is 15.7 million from which 60% from the private sector. In micro business, they
only have the 0-9 employee and approx. 5.3% million micro industries in UK, this only takes
96% of all the industry. Approx. 300 employees have selected in medium sized industry in their
respective fields, whereas there are 10 employees besides the micro economics, that shows the
limited opportunities of a job (Morris, 2018). In UK the number of industries are increasing day
by day, which becomes the opportunity for the youth and it also helps in the employing the youth
of the country. The impact of small sized business are more than the medium sized business.
According to the research, the small business gives the 99% of the business.
Importance of small businesses in the growth of social economy
Employment opportunities: Small businesses and SMEs provide employment to the local
people by inducing innovation and growth to the community where the business is established.
SMEs tend to stimulate the opportunities and working environment of the community by
employing people may not employable by larger organisations. Small businesses focus on
innovation apat from skills and talent, so they give an increased importance in employing people
with new ideas and solutions. Many large corporations depend upon small businesses by through
outsourcing functions within the same community (Meyer and de Jongh, 2018).
Tax contribution: Every time consumers prefer to patronize a local business; money is being
given back to the society. A successful small business when generates higher revenue, will
essentially pay higher taxes which may include business tax and local property tax. This tax is
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used for the development of the local community like police departments, community schools or
fire departments. A thriving SME could enhance property value across the community and
generate more property tax for local government. The small businesses generally charge taxes on
the basis of location and can help in the growth of social economy. Through sales tax collections,
they can be the foundation of taxation districts for projects like lightning, sidewalk etc.
Adapting to changes: Many small business and SMEs have the capacity to respond, operate and
adapt promptly according to the changes in economic climates. This is because the businesses
are primarily customer- oriented and function according to the needs of the society. Many
consumers remain loyal to the local business and prefer supporting them in an economic crisis. If
the SMEs manage to stay afloat during such times, they can further strengthen the local
economy.
Expansion and growth: The growth of small businesses into bigger corporations can help the
community development. Large businesses like Nike started off as a small business and achieved
growth to become a major player in the national and international market. The community
benefits a lot from a successful small business becoming a leader in the market as the corporation
gives back to the community in many forms. It establishes infrastructure and foundations for its
society and might even be headquartered there and stimulate the local economy (Shepelev and
Khokhlova, 2016).
LO 3
Characteristic traits and skills of successful entrepreneurs
Successful entrepreneurs have certain skills and characteristic traits that differentiate them from
other business manager. Some examples of entrepreneurs are Peter jones. J.K. Rowling and
Simon Cowell.
Peter jones who is a businessman and a reality TV personality had been a visionary since
childhood and kept creating ideas about running a multimillion-dollar business and was keen on
learning. He always believed inn his passion and working hard towards it. J.K. Rowling, the
author of Harry Potter series has always been hard working and determined to achieve her goals
in spite of having a tough personal life who was also rejected by 12 book publishers. She was
had a dream and perseverance to achieve it. Simon Cowell, an entrepreneur, TV personality and
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record executive is a risk taker who dropped out of Dover college to pursue his musical career.
He is goal oriented and creative (Ramadin, 2019).
The major skills that all these entrepreneurs have are Curiosity, Efficiency, Focus, Networking
capabilities, Strategic thinking, Time management, Research and Learning and communicational
skills.
Characteristic Traits of Entrepreneurs:
1. Creative: Entrepreneurship begins with an idea. To become successful, entrepreneurs
always need to think of new ideas and innovative ways of doing things. They always
think of new ways and out of the box solutions which differentiates them from other
business leaders.
2. Passionate: It is the most important characteristic of successful entrepreneurs as without
passion, there will be no drive or reason for working exceptionally towards a project, goal
or business. They are proactive with what, how and when they do things.
3. Motivated: Due to passion for ideas, entrepreneurs are dedicated to put long hours and
sweat to establish and operate a successful new business. Entrepreneurs are their own
motivators and are independent.
4. Future-oriented: As entrepreneurs focus upon on moving forward, they always tend to
look at the future. Entrepreneurs are highly goal-oriented and have a thorough
understanding of their needs. They plan everything on the basis of analysis and
evaluation for long term sustainability of the business (Cohen and Wirtz, 2018).
5. Decisive: Entrepreneurs refrain from procrastination and do a thorough research before
decision-making. They don’t take a lot of time to decide things and quickly analyse the
situation and make appropriate choices. They never believe in missing any opportunities
and intend to seize the day and get the work done.
OCEAN Model for entrepreneurial personality
The five personality traits are important for entrepreneurs to possess are:
1. Openness to Experience: This refers to the depth and complexity of a person’s intellect,
imagination and experiences. It describes an individual’s willingness to try to new things,
and ability to be vulnerable. Certain traits related to this are Insightfulness, Originality,
Cleverness, creativity and curiosity. It is an important trait for entrepreneurs as they have
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to learn, be creative, be a risk taker and do networking in their day to day business
operations.
2. Conscientiousness: It is a trait that refers to the tendency to control impulses and
behaviour should facilitate goal-direction. Conscientious individuals excel ability to plan,
organise and work within the rules. The traits included in this are persistence, self-
discipline, reliability, being resourceful, estimation capacity, panning and ambition.
Entrepreneurs need to score high on this personality as it describes leadership capabilities
and strategic planning for businesses. The ones who are weak in this tend to procrastinate
work.
3. Extroversion: There are two major spectrums in which basic personality types are
divided, namely extroversion and introversion. It describes how people talk and
communicate with others or if they prefer being alone. Extroverts draw energy from
interaction with others while introverts get tired from conversations and replenish this by
solitude. Entrepreneurs should majorly score in extroversion as they have to do
networking for the business through social communication and interaction.
4. Agreeableness: It refers to how a person interacts with others and their orientation
towards them. It includes traits like empathy, humbleness, gratitude, trust, altruism,
politeness, and sensitivity. Entrepreneurs should be highly agreeable to be well respected
and polite in their attitude which helps them in making few enemies and more relations.
If they are low on this trait, they would have ill temper and act rudely which is not right
for their image.
5. Neuroticism: This trait encompasses an individual’s emotional stability and general
temper. The traits include moodiness, pessimism, fear, anxiety, nervousness, lack of self
confidence and oversensitivity. The entrepreneurs have to score lowly in this personality
as they need to be self-confident, have no self-doubts or take emotions too seriously and
be sensitive to business situations (Singh-Manoux and et.al., 2020).
LO 4
Impact of environment on Entrepreneurship
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Entrepreneurs are not god instead they are the individuals who make the best use of the
available resources and implement them productively to gain profitability and success in life.
They undergo many dangers and problems but takes decision which will give a rapid kick to the
path of extraordinary results. Entrepreneurship is greatly affected by the background the past
experiences of the person’s life. Some of its factors hinders the entrepreneurship while the other
fosters. Every entrepreneur has different life experiences which made them reach the position of
success. This can be explained well by considering two well-known entrepreneurs - J.K. Rowling
and Peter Jones and their story of entrepreneurship.
JK Rowling
The childhood of JK Rowling was surrounded by books and because of this she wrote
her first book named ‘Rabbit’ at the age of just 6. She always wrote stories and shared them with
her sister, Dianne. When she was nine years old, she moved near the Forest of Dean and was
spending her childhood there (Smith, Hamilton and Fabian, 2019). She has done her schooling
and was under the government assistance. She was desperate about writing but her parents didn’t
take it seriously because they too never went to college. They thought that her wish to write will
cost them a lot and they were not much financially stable. Her teenage life was full of
difficulties.
Anyhow, she joined a college and got graduated successfully. She later did research work in
Amnesty International but the work didn’t suit her because she was always busy thinking about
the stories and the names of its characters. Suddenly, when she was travelling from Manchester
to London, a thought came to her mind about the “Harry Potter”. She spent her 5 years in
plotting the 7 books in that series. She was also working for an adult novel but unfortunately
unable to complete. And the most traumatizing day came into her life in 1991 when she was 25
years old, her mother died (Adisa and et.al., 2019). Then, her upcoming life was full of sadness
as not a single day went when she didn’t think of her mother.
She was fed up with the secretary work and finally moved to Portugal to teach English to
students. There she met with a television journalist Jorge Arantes and married him.
Unfortunately, in 1992 she faced a miscarriage and later in 1993 she had a daughter named
Jessica. But the same year, the couple separated because of some reasons. But, she didn’t lose
hope and started writing stories of Harry Potter. She felt helpless as she was a single homeless
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mother and was under government welfare. But then also she didn’t become demotivated and
became the president of a Gingerbread, a well-known organization.
But, she gradually became so much depressed and upset, she even thought of committing
suicide. But took many therapy sessions to overcome it. In 1995, she wrote the first book of
Harry Potter but rejected by many publishers. But, fortunately, one publisher accepted her
writings and asked for 500 copies of the book. In 1999, its 300,000 copies were sold.
The book was becoming famous, she continued writing and published 3 more books. Along with
this, she was preparing for its movie versions also. She wrote many other books along with Harry
Potter. Then she got remarried to a Scottish Doctor (Gielnik, Zacher and Wang, 2018). She
earned a lot of name and fame which made her a billionaire in 2004. She donated large amount
of money to charity also. In 2007, all the books of Harry Potter released and in 2011 all the
movie versions. She kept writing many other books which earned her a lot of money. Her
writings also made her to win many fantastic awards.
Despite all the difficulties, she didn’t give up and continue to follow her dream. It was really
worth shocking that a poor girl can become a billionaire one day. This gave the biggest lessons to
all the people that Entrepreneurs never let the difficulties to become the barriers in the success
but learn from them and move on towards converting their dreams into goals and strive hard to
achieve them with sheer dedication and determination.
Peter Jones
He also belonged to a poor family. He was having a dream from his childhood to become
a great businessman by following his father footprints who ran a small business in England. He
did his schooling from a good school and completed his graduation from a college. He then
joined English classes and learnt Tennis in his spare time. He started teaching Tennis gradually
which made him learnt how to run a business. He became a good coach by clearing many
examinations.
He then started selling the computers but was not successful due to lack of customers. He then
ran a restaurant but sold it after sometime as he faced a loss of £200,000. His whole wealth was
drained off along with his car and home. His financial instability forced him to work for a
company which dealt in providing mobile phone services. Later, he started his own enterprise
along with starring in a TV show. The enterprise earned him a turnover of £44 million in just 2
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years. It was becoming famous day by day and made him earn a lot of money. After having the
net worth of £475 million (Mawson and Kasem, 2018), he started a charitable organization. He
also strived hard to help the business students to achieve their dreams in life.
The background and experiences of Peter Jones was worth shocking as he became a famous
entrepreneur despite all the difficulties in his life. With his firm dedication and sheer
determination, he strived to achieve his dreams and goals which helped him to earn the title ‘One
of the best Entrepreneurs in UK’.
CONCLUSION
The report above illustrated the types of ventures that are entrepreneurial along with
evaluating the similarities and differences in those ventures. It also described the impact of the
small and micro businesses on the economy by using various statistics and data. The research of
the report also examines the entrepreneurial mind set’s aspects. The characteristics and skills of
some entrepreneurs of UK were also highlighted along with presenting their personality. The
report finalized by critically evaluating the impacts of background and experiences on the
journey of life of entrepreneurs along with the factors hindering and fostering the
entrepreneurship. The two examples taken shown that there are many factors which creates
hurdles but the individual must be determined to achieve its goal to success.
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REFERENCES
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DeSantola, A. and Gulati, R., 2017. Scaling: Organizing and growth in entrepreneurial
ventures. Academy of Management Annals. 11(2). pp.640-668.
Frederick, H., O'Connor, A. and Kuratko, D.F., 2018. Entrepreneurship. Cengage AU.
Gielnik, M.M., Zacher, H. and Wang, M., 2018. Age in the entrepreneurial process: The role of
future time perspective and prior entrepreneurial experience. Journal of Applied
Psychology. 103(10). p.1067.
Katz, J.A. and Green, R.P., 2018. Entrepreneurial small business. McGraw-Hill Education,.
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Morris and et.al., 2018. Distinguishing types of entrepreneurial ventures: An identity‐based
perspective. Journal of Small Business Management. 56(3). pp.453-474.
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Shepelev, D. and Khokhlova, E., 2016. Role of small business in the development of the national
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Singh-Manoux, A., and et.al., 2020. Association of big-5 personality traits with cognitive
impairment and dementia: a longitudinal study. J Epidemiol Community Health.
Smith, S., Hamilton, M. and Fabian, K., 2019. Entrepreneurial drivers, barriers and enablers of
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