TABLE OF CONTENTS INTRODUCTION...........................................................................................................................1 TASK 1 (LO 1 & LO 2)..................................................................................................................1 P1. Different entrepreneurial ventures and their relation with the typology of entrepreneurship .....................................................................................................................................................1 P2. Similarities and differences between entrepreneurial ventures.............................................2 M1. Demonstrating an understanding of entrepreneurship in public and corporate sectors.......3 D1.Criticalexaminationofscope,developmentandgrowthofentrepreneurshipand entrepreneurial ventures...............................................................................................................4 P3. The way micro and small businesses impact on economy using relevant data and statistics .....................................................................................................................................................5 P4. Significance of small businesses and business start-ups to the growth of social economy. .6 M2. Differences that small, medium and large businesses make to the economy......................7 D2. Impact of small businesses on different levels of economy and in international context....7 TASK 2 (LO 3 & LO 4)..................................................................................................................8 CONCLUSION................................................................................................................................8 REFERENCES................................................................................................................................9
INTRODUCTION Entrepreneurshipisbasicallyaprocessinwhichanentrepreneuridentifiesnew opportunities prevailing in the market and convert the same in products and services in a way that will satisfy the needs of target audience to utmost level possible. Currently, small businesses areatboominwhichanentrepreneurhastofacealotofriskstoreachatsuccess (Entrepreneurship and Small Business Management, 2019). In the present report, there will be discussion on the range of venture types that might be considered entrepreneurial. Also, study willbemadeontheimpactofsmallbusinessesoneconomy.Thekeyaspectsofan entrepreneurial mind-set will be assessed as well. Along with that, there will be focus on different environments that foster or hinder entrepreneurship. TASK 1 (LO 1 & LO 2) P1. Different entrepreneurial ventures and their relation with the typology of entrepreneurship Entrepreneurship– It can be understood as a process which helps in identifying the new opportunities prevailing in market and converting the same into viable products and services. However, this process needs to go through many attempts of entrepreneur to finally gain success and growth along with profit. Difference between entrepreneurs and intrapreneurs –An entrepreneur is the one who takes the risks and responsibilities of business which start from identifying the opportunities that exist in market and then providing the products and services accordingly (Julien, 2018). On the other hand, intrapreneur is one who can be referred as a hired employee that is responsible for bringing innovation in business for which he takes specific remuneration from the firm. Different activities linked to entrepreneurship Prediction– This is one of the main activity performed by entrepreneurs i.e. to forecast the change in demand and supply of goods by identifying potential opportunities, risks and challenges in market. Acting on changes in market– Another activity performed by him is to give response to the changes taking place in market in such a way that positive results can be gained by business through same (Torrès and Thurik, 2018). Different entrepreneurial ventures undertaken by entrepreneurs 1
Growth and lifestyle firms–Growth firms refer to those entrepreneurial ventures which possess high potential to grow in the future by the ways like development in technology. For example: Microsoft and Amazon. On the contrary, lifestyle firm is one which actually does not have very high growth potential in future but makes efforts to fund the lifestyle of its entrepreneur. For example: tour guiding associations. Entrepreneurial ventures on the basis of sector–Entrepreneurial firms that operate in private sector are basically run by individuals or private organisations with an aim to earn higher profits (Marom and Lussier, 2018). Public entrepreneurship on the other hand is the combination of both private and public resources as well as capabilities that is run with an objective to do social welfare with innovation and creativity. In this, there is high involvement of government. Entrepreneurial ventures on the basis of size–Based on the size of firms, there are three types of entrepreneurial ventures i.e. micro, small or medium sized organisations. All these firms have their own importance for the economy with different characteristics. Ownership of micro organisations is with sole proprietors and they start business with a verysmallamountofcapital(LaukkanenandTornikoski,2018).Thelevelof employment in small and medium sized organisations is more in comparison to micro firms as well as their ownership is shared by more than one proprietor. In terms of labour, fund and newly advanced technologies, small and medium sized organisations have better access as compared with micro firms. Social enterprise–There is one more entrepreneurial venture i.e. social enterprise, purpose of which sometimes is to maximise the profits of business with ignoring welfare of society. However, company undertakes CSR activities but, these are not sufficient enough to bring development in the society. These entrepreneurial ventures highly contribute in the economic condition of nation (Spence and et.al., 2018). P2. Similarities and differences between entrepreneurial ventures There are some similarities and differences between different entrepreneurial ventures. To understand the same, private and public sector organisations are taken into consideration which are discussed as below: SimilaritiesDifferences Both the types of organisations runInprivatefirms,motiveisjustto 2
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with an aim to earn profits. Government intervention is there in both the types of ventures. Boththetypesofentrepreneurial venturesgivedueemphasisonits human resource management to run business in a smooth way. There is increasing pace of change in boththetypesofentrepreneurial ventures to sustain in the market for longerspanoftime(5Key Differences between Organizations in the Public and Private Sectors, 2019). increaseprofitsbutinpublic entrepreneurial ventures, welfare and developmentofsocietyisalsothe concern (5 Key Differences between OrganizationsinthePublicand Private Sectors, 2019). In public sector firms, interference of government is more in comparison to private entrepreneurial ventures. Leadership in both these ventures is differentasfirmsinprivatesector operateinamoreflexible environment than that of private firms. M1. Demonstrating an understanding of entrepreneurship in public and corporate sectors Many entrepreneurial ventures are there that come under private, public and social enterprises. Some of the examples are: Private sector organisations– Apple, Virgin Atlantic and Tesla Public sector organisations– Microsoft and Amazon Social enterprise– Ashton Community Trust and The Create Foundation CIC BasisSimilaritiesDifferences ObjectivesOnthebasisofobjectives, there are growth and lifestyle firmswhichhavecommon objective i.e. to gain growth in thefuture(Castrogiovanni, 2018). However,incomparison to growth firms, lifestyle firmsdonothavevery highgrowthperspective astheirmainaimisto fundthelifestyleof owner. StructureBasedonthestructureof entrepreneurial ventures, there areprivateandpublicsector But,forpublicsector organisations,more preference is given to the 3
organisationswhichhave common aim i.e. to maximise their profits. socialdevelopmentof society rather than earning profits. SizeIn accordance with the size of businesses,therearemicro, smallandmediumsized organisations (Trehan, Higgins andJones,2018).Common similarity among all is that they allhavespecificownership withuseoflimitedfund, technology and labour. Insmallandmedium sizedorganisations, ownershipismorethan onewhichissinglein micro firms. Also, access offund,technologyand labour in SMEs is better thanthatofmicro organisations. D1. Critical examination of scope, development and growth of entrepreneurship and entrepreneurial ventures With regard to scope, development and growth, entrepreneurship of each type of organisation differs. Depending on the structure, size and objectives of businesses, their scope and growth are based and development takes place accordingly. It can be justified like scope and growth of large organisations is very high as compared with small and medium sized enterprises as they are having more advanced technologies along with large number of workforce and other resources like funds (Bruton, Zahra and Cai, 2018). Thus, development of these firms is also high in comparison to others as they earn huge profit and revenue which is then invested in the improvement of business processes to bring innovation and creativity. However, scope, development and growth of SMEs on the other hand is less due to having less number of resources. Thus, it can be critically assessed that entrepreneurship gets affected with the size, objective and structure of business as if it is a private sector enterprise, main emphasis of owner will be on bringing innovation in market place (Soundararajan, Jamali and Spence, 2018). While, on the other hand, in public sector firms, consideration is given to the welfare of society and adding to national income along with creating social change and community development. 4
P3. The way micro and small businesses impact on economy using relevant data and statistics In the present scenario, micro and small businesses put a direct and huge impact on the economic condition of a nation. These businesses mainly have high creativity and power of innovation which bring great ideas to attract and retain customers with contributing to national economy. There are different forms of small businesses operating in the UK based on rules and regulations as well as factors like environment and the culture in which firms operate. These are mainly operating by the way of sole proprietorship (Hornsby and et.al., 2018). However, in the UK and many other nations, the most common form of micro and small businesses are non- employee sole proprietorship. In this nation, approximately 4.3 million businesses are being run in this form and around 1.3 million are those are operating as employing businesses. Figure1: Percentage of Total Businesses (Units) Based On Employees (Source:Small Businesses, 2019) Apart from that, there are almost 1.9 million businesses which are being run in the UK as trading companies while, 414000 businesses are there which are run in the form of ordinary partnership. Further, number of employing businesses are approximately 99.3% which come under the private sector of UK which are running small businesses where around 99.9% are SMEs. In United Kingdom, number of SMEs start-ups running are around 5.68 million. Along with that, number of employments provided as of 2017 is almost 16.1 million people that are working at national, regional and local level. In high income countries, SMEs provide around 5
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65% of total employment. Whereas, it is more than 70% and 95% of total employment in low and middle income nations respectively (Business population estimates for the UK and regions, 2016). Figure2: Percentage of Businesses by Employees (Source:Small Businesses, 2019) In the UK, as of 2016 and 2017, total turnover of SMEs was estimated at ÂŁ1.8 and ÂŁ1.9 trillion respectively. In accordance with the data of 2017, 2.6 million SMEs on an average were registered under VAT and PAYE. However, more than 3 million businesses i.e. 55% were un- registered along with 14% and 53% registered businesses in the form of sole proprietorships and partnerships respectively. It can be seen that from the year 2008 (period of recession) to 2017, the total growth in the economy of UK in terms of number of SMEs is 2.2 million (Business population estimates for the UK and regions 2016, 2016). P4. Significance of small businesses and business start-ups to the growth of social economy Under small businesses and business start-ups, there are main street businesses which are playing a significant role in contributing to the economy of nation by serving local customers as well as the firms operating locally as they are providing raw material to them. Small businesses playanintegralroleintheUKeconomywherethemostimportantsectorsareretail, manufacturing, construction, wholesale and motor vehicle repairing (Kuratko and Morris, 2018). However, in every industry, at least 99.5% of total population of businesses comprises of small 6
and medium sized enterprises (Business population estimates for the UK and regions,2016). Approximately 14% established businesses come under retail, wholesale and repairing industry. 12% and 10% SME enterprises are under construction and manufacturing industry respectively. In the growth of social economy, SMEs are having high significance and involvement. Here, socialeconomyreferstobasicallytypesoforganisationslikeassociations,cooperatives, foundations, etc. The economic, environmental and social issues are solved by SMEs to a high extent where those established as not-for-profit play a crucial role in making the society prosperous, sustainable as well as inclusive (Farhat and et.al., 2018). It can be said that SMEs are leading the nation to get half of the new jobs in economy which is increasing the standard of living of people. M2. Differences that small, medium and large businesses make to the economy The small, medium and large organisations make a huge difference to economy as these firms create jobs, foster entrepreneurship, helps in alleviating the poverty as well as in increasing the growth rate. Along with that, these organisations bridge the gulf of income inequity with offering a strong base to industries of nation. As of 2016, total employment created by SMEs is 15.7 million i.e. 60% of the total. Employment generated by small businesses is 12.5 million and that of large businesses is 10.5 million. Therefore, overall, it can be said that these businesses prove to be highly important to form an economy healthy, strong and balanced with gaining sustainability (Julien, 2018). However, it is not so for all countries as where some nations experience better growth, others might face an obstacle to develop the start-ups. For the same, cultural differences is the main factor which influences these firms in a country. Apart from that, there are some other factors too like advanced techniques, bringing innovation and creativity, government support at both local and national level as well as access to fund, labour and technology (Torrès and Thurik, 2018). These factors play a crucial role in developing small, medium and large organisations and so, nations which are flexible enough gain higher growth from these enterprises. D2. Impact of small businesses on different levels of economy and in international context Small businesses put direct impact on the growth of national, regional and local economy and so as at an international level. As per the data of 2016, 4.8 million small businesses that operate under private sector are in England. In Scotland, there are around 325, 000 small 7
businesses and in Wales and Northern Ireland, these are approximately 222, 000 and 124, 000 respectively. Further, 1 million are there in London and in South East of England, there are 900, 000 private sector businesses. Apart from that, North East of England is having 147, 000 businesses that also operate in the private sector of UK (Business population estimates for the UK and regions 2016, 2016). Therefore, it can be said that at different levels of economy, small businesses put a huge impact as they generate high rate of employment, profit as well as revenue that ultimately lead to the growth of country by generating employment. As maximum SMEs are globalised and having their operations in one nation, so benefits of same are gained by other countries too which justifies that small businesses impact at the international level also (Marom and Lussier, 2018). TASK 2 (LO 3 & LO 4) Covered in PowerPoint Presentation (PPT) CONCLUSION From the above report, it can be concluded that entrepreneurship is a systematic process by which significant opportunities in market are identified and grabbed to offer the most viable products and services. It has been assessed that there are different types of entrepreneurial organisations based on their size, structure, number of employees, total turnover and capital invested which all make high contribution in the economy of UK, especially the micro, small and medium sized businesses. 8
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REFERENCES Books and Journals Bruton, G. D., Zahra, S. A. and Cai, L., 2018.Examining entrepreneurship through indigenous lenses. Castrogiovanni,G.J.,2018.Guesteditor’sintroduction:sowhatisentrepreneurship research?.International Entrepreneurship and Management Journal. pp.1-3. Farhat, J. and et.al., 2018. New directions in entrepreneurship research with the Kauffman Firm Survey.Small Business Economics.50(3). pp.521-532. Hornsby,J.S.andet.al.,2018.Entrepreneurshipeverywhere:Acrosscampus,across communities, and across Borders.Journal of Small Business Management.56(1). pp.4- 10. Julien, P. A., 2018.The state of the art in small business and entrepreneurship. Routledge. Kuratko,D.F.andMorris,M.H.,2018.Examiningthefuturetrajectoryof entrepreneurship.Journal of Small Business Management.56(1). pp.11-23. Laukkanen, M. and Tornikoski, E. T., 2018. Causal mapping small business advisors’ belief systems:acaseofentrepreneurshippolicyresearch.InternationalJournalof Entrepreneurial Behavior & Research.24(2). pp.499-520. Marom, S. and Lussier, R. N., 2018. Developing a Small Business Management Concentration within a Business Degree.Small Business Institute Journal.13(2). pp.15-30. Soundararajan, V., Jamali, D. and Spence, L. J., 2018. Small business social responsibility: A criticalmultilevelreview,synthesisandresearchagenda.InternationalJournalof Management Reviews.20(4). pp.934-956. Spence, L. J. and et.al., 2018.Research handbook on small business social responsibility: global perspectives.Edward Elgar Publishing. Torrès, O. and Thurik, R., 2018. Small business owners and health.Small Business Economics. pp.1-11. Trehan, K., Higgins, D. and Jones, O., 2018. Engaged scholarship: Questioning relevance and impactincontemporaryentrepreneurship/smallandmedium-sizedenterprise research.International Small Business Journal.36(4). pp.363-367. Online 5 Key Differences between Organizations in the Public and Private Sectors. 2019. [Online]. Availablethrough:<https://onlinempadegree.usfca.edu/news-resources/news/5-key- differences-between-organizations-in-the-public-and-private-sectors/>. Business population estimates for the UK and regions 2016. 2016. [PDF]. Available through: <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/559219/ bpe_2016_statistical_release.pdf>. 9
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