Entrepreneurship and Small Business Management

This assignment explores the different types of entrepreneurial ventures, similarities and differences between entrepreneurs, and the impact of micro and small enterprises on the economy. It also discusses the importance of small business and startups to the growth of the social economy.

ENTREPRENEURSHIP
AND SMALL BUSINESS
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Examine different types of entrepreneurial ventures and explain how they relate to the
typology of entrepreneurship.......................................................................................................1
P2: Similarities and differences between entrepreneurs..............................................................2
TASK 2............................................................................................................................................4
P3: Interpretation and assessment of relevant data to illustrate how the impact of micro and
small enterprises on the economy................................................................................................4
P4: Importance of small business and business start-ups to the growth of the social economy..6
TASK 3............................................................................................................................................8
Covered in PPT............................................................................................................................8
TASK 4............................................................................................................................................8
P7: Examination using relevant examples the role of background and experience in hindering
or fostering entrepreneurship.......................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
.......................................................................................................................................................10

INTRODUCTION
Entrepreneurship refers to creation of a business using creativity and innovation with an
aim of generating profits (De Bruin and Mataira, 2018). It often involves bringing a new product
or a service according to needs and requirements of consumers in the market. It is highly
rewarding in terms of growth of profit,capital and economy. An entrepreneur is a person who
takes the initiative of starting a new venture with a new idea by taking risk. Being persistent in
efforts despite failure is the quality that makes an entrepreneur different from others. In this
assignment, analysis will be made on types of enterprises,impact small enterprises create on
economy. Additionally, determination of aspects of mindset of an entrepreneur and examination
of role of environmental factors in supporting or hindering entrepreneurship have been covered.
TASK 1
P1: Examine different types of entrepreneurial ventures and explain how they relate to the
typology of entrepreneurship.
Entrepreneurial ventures are organisations started by the entrepreneurs which facilitate
innovation and creativity in providing products and services to consumers (Welter and et.al.,
2017). An Entrepreneur can be referred as a person who starts a business by taking the benefit of
an available opportunity which can be either in form of a product or a service.
Entrepreneurship is a process of planning and running a business which is mostly small-
scale in nature with an aim of generating profits.
Types of entrepreneurial ventures-
Small business entrepreneurship- In it, the enterprise started out by entrepreneurs is
small-scale in nature. The resources available are very limited and operations need to be
managed with them. Optimum usage of funds in a small company results in sustainable profits.
For e.g. - A small-scale textile manufacturing unit can be considered as an example of small
business entrepreneurship.
Scalable startup entrepreneurship- This is a unique type of entrepreneurship where
entrepreneurs start out with a vision and innovation to bring a change in existing pattern of
society. They are quick in finding out new demands of consumers and grasp the opportunity to
take action. For e.g.- Amazon, which is an online shopping website can be an example of
scalable startup entrepreneurship.
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Large company entrepreneurship- These enterprises are set to work on a large-scale
and take the advantage of economies of scale in order to maximise their profits (Audretsch and
Caiazza, 2016). As they earn a large amount of profit they can invest in research & development,
innovation as compared to smaller enterprises. For e.g.- Microsoft is an example of large
company entrepreneurship as it is a global company.
Social entrepreneurship- In this type of entrepreneurship the aim is not to earn profits
but to fulfil social responsibility. Social welfare is the first priority in these type of organisations
as they seek to help the underprivileged people in society. Better World Books is an example of
it which aims to increase literacy rate in the world by reusing and recycling books.
Typology of entrepreneurship-
Serial entrepreneur- A serial entrepreneur is a person who starts many small businesses
within a very short period of time (Devece, Peris-Ortiz and Rueda-Armengot, 2016). They bring
changes continuously in an order-wise basis. A serial entrepreneur uses scalable startup
entrepreneurship model as it helps in implementing dynamic changes.
Social entrepreneur- This type of entrepreneur focuses on fulfilment of social
responsibilities and adding value for society with work rather than earning profits. A social
entrepreneur uses social entrepreneurship model as by using it social objectives can be fulfilled.
Female entrepreneur- Women who take the initiative of bringing a product or service in
market by taking a certain level of risk are female entrepreneurs. A female entrepreneur makes
use of the small business entrepreneurship model as it helps them in easily managing operations
of the enterprise.
P2: Similarities and differences between entrepreneurs
Differences-
Basis Lifestyle
entrepreneur
Serial entrepreneur
Goal To alter their
personal lifestyle
and pursue their
passion. They aim
to focus on what
To facilitate continuous change in market
by innovation. They bring out changes in a
chronological order.
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works for them.
Characteristics Resilient and
Committed
towards their
objective. They
are persistent in
meeting their
objectives and are
not deterred by
failures they
encounter while
pursuing them.
Ability to set goals and targets to bring
new products and services continuously.
Regular use of creativity and innovation in
enterprise.
Enterprise They use scalable
stratup
entrepreneurship
model.
They use large company entrepreneurship
model.
Similarities-
 Both these entrepreneurs take risk in starting their enterprise as they focus on bringing a
change in the existing pattern of society (Edoho, 2016).
 Both are committed towards their goals and are persistent in following them. They make
efforts with their hard work, dedication and commitment to achieve these goals.
Differences-
Basis Female entrepreneurs Male entrepreneurs
Goal To motivate women to take up
entrepreneurship as a
profession. To facilitate
empowerment of women by
providing them employment in
enterprise.
To earn maximum profits from
the enterprise by producing
goods and services. To sustain
the enterprise in intense
competition and getting ahead
of the competitors.
Characteristics Use of small business Use of creativity and
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entrepreneurship model,
providing encouragement to
women to take up
entrepreneurship.
innovation in enterprise, taking
high-level risk by starting out
venture.
Similarities-
 Both these entrepreneurs have an aim to earn sustainable level of profits in the long-run
by satisfying consumers with their products and services.
 These entrepreneurs include creativity and innovation in their business model and aim to
bring a product or service which is new in market by scanning environment for needs and
demands of consumers (Doern, 2017).
 Both of them aim to earn a sustainable level of profit which can help them survive in the
market in the long-run.
TASK 2
P3: Interpretation and assessment of relevant data to illustrate how the impact of micro and small
enterprises on the economy
Small and medium enterprises are entities having turnover less than £25m and has fewer
than 250 employees (Terjesen, Hessels and Li, 2016). The classification of micro, small and
medium enterprises is as follows-
Micro enterprises- Enterprises having less than 10 employees and a turnover under 2
million pounds are micro enterprises.
Small enterprises- Enterprises having less than 50 employees and a turnover under 10
million pounds are small enterprises.
Medium enterprises- Enterprises having less than 250 employees and a turnover under 50
million pounds are medium enterprises.
Impact of SMEs on U.K. economy-
 Wealth creation- SMEs drive the wealth creation in U.K. economy as a large number of
businesses in the country are small businesses. They do so by earning a sustainable level
of profits and contributing to the growth of economy. They focus on productivity in their
operations which helps them to enhance their overall earnings.
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 Employment generation- SMEs provide employment to many talented people waiting for
opportunities (Kantur, 2016). They hire skilled and talented workers which can take their
business forward and help it grow substantially in the future. Thus, in doing so they hep
to eradicate the problem of unemployment in country. Also, skilled workers are more
efficient and effective in their work which helps these enterprises.
 Contribution to GDP- SMEs have a substantial contribution to make towards GDP of
U.K. as they act as the engine of growth in the country. They increase the national
income of the nation. They account for different segments of businesses in the country
be it manufacturing, service etc. Their contributions are vital for economic health of the
country.
According to the given chart, the number of micro enterprises in U.K. In thousands is 5613,
small enterprises are 211 and medium-sized enterprises are 36. Thus the growth of micro
enterprises is far more than that of small and medium-sized ones. Also, of the total SMEs in the
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country micro enterprises acquire a very large share in market. Thus it can be concluded from the
chart that among MSMES micro enterprises are gaining more space in market because of ease of
setting up a micro enterprise.
Nature and characteristics of types of businesses-
Private company- A private company is an organisation headed by a group of people. It
has a separate legal entity, perpetual succession and the liability of its members is limited
(Gwena and Chinyamurindi, 2018). Also, it has paid-up share capital and minimum subscription.
In a company, profit is divided between its different members and is known as dividend.
Sole proprietorship- Sole proprietorship is a type of business where all the responsibilities
are headed by a single person (Woodfield, Woods and Shepherd, 2017). It has sole ownership,
unlimited liability and sole right on capital. The profits are not shared in sole proprietorship and
the owner keeps all the earnings.
Partnership- A business enterprise headed by two or more individuals is knowns as
partnership firm. It has unlimited liability, sharing of profits and transfer of interest. In a
partnership, profits are divided between the partners either equally, on the basis of capital or an
agreed ratio.
P4: Importance of small business and business start-ups to the growth of the social economy
Brexit refers to the withdrawal of United Kingdom from the European Union. This means
that that the U.K. remains a member of EU customs union and single market during transition
period but has ceased to be a member of political bodies of European Union (Ibidunni, Peter and
Ogbari, 2017). The opportunities and threats posed by brexit are-
Opportunities-
 Opening of markets- Businesses in U.K. can now look to go beyond the markets of E.U.
and expand themselves on the global stage. This gives them an opportunity of increasing
their level of earnings and creating an image of themselves in the foreign market.
 Increase in demand- Post brexit, there will be an increase in domestic demand of
different products and services. This is so because imports will become costlier leading to
consumers purchasing goods manufactured in the local market of U.K. This will raise the
manufacturing of local products thus offering a lot of scope in the sector for small
businesses after brexit.
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 Reduction in regulations- There will be more freedom and flexibility on offer to
businesses in U.K. which will therefore lead to reduction in regulations.
Threats-
 Supply issues- A lot of companies in U.K. relied on inputs provided by suppliers of E.U.
which will thus create supply issues for them after implementation of brexit. This will
lead to increase in costs and delays in receiving inputs.
 Workforce issues- A lot of E.U. workers used to work in organisations of U.K. and post-
brexit this will create workforce issues for many firms.
 Economic impact- There will be a lot of negative impact on the economy of country
after brexit. This will also affect the functioning of businesses as their overall business is
likely to reduce because of tougher rules.
Difference between small businesses and start-ups-
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Basis Small businesses Start-ups
Profit They have aim to earn profits
to sustain themselves in
market.
Start-ups can run in losses in
their starting years.
Finance Small businesses are either
funded by owner or by
external sources (Scott,
Penaluna and Thompson,
2016)
Start-ups are funded by
venture capitalists who provide
funds in return of a share in
equity or debt.
Innovation For small businesses
innovation is a side objective
which does not needs to be
achieved necessarily.
For start-ups innovation is a
main objective that needs to be
achieved as start-ups are based
upon providing an innovative
product or service.
TASK 3
Covered in PPT
TASK 4
P7: Examination using relevant examples the role of background and experience in hindering or
fostering entrepreneurship
Larry Ellison-
Background- Larry Ellison was born on 17th August 1944 in Bronx, New York. He
studied at University of Illinois . He started working in Ampex in 1970s.
Education- Larry Ellison studied at University of Illinois but dropped out of college and
could not complete his education.
Family- His parents are Lillian Ellison and Louis Ellison.
Experience- He founded Software Development Laboratories(SDL) which he renamed
as Relational Software Inc. and later as Oracle. He has more than 30 years of experience in
managing Oracle.
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Social network- He has formed social network by interaction with many people inside
and outside his company Oracle.
Gender- Male
Nationality- He is a citizen of United States of America(USA).
Background, family, experience and social network has positively fostered Larry Ellison
towards entrepreneurship. As a result, he features in most successful entrepreneurs of all time.
Michael Dell-
Background- Michael Dell was born on 23rd February in Houston, U.S.A. He studied at
University of Texas. He started his own company Dell.
Education- He studied in University of Texas but dropped out and could not complete
his education.
Family- His parents are Lorraine Charlotte Dell and Alexander Dell.
Experience- More than 30 years of experience in managing Dell.
Social network- He has formed social network by interacting with different people and
making new contacts.
Gender- Male
Nationality- He is a citizen of U.S.A.
Background, family, experience and social network has positively initiated Michael Dell
to adopt entrepreneurship as a career option. This has helped him in becoming a successful
entrepreneur.
CONCLUSION
From the above project report, it can be concluded that entrepreneurship means a process
of bringing out creativity and innovation in products and services by taking risk. An entrepreneur
is a person who acts as the owner and manager of enterprise and looks after its overall
operations. Small businesses have a big impact on the economy of the country and contribute to
the overall GDP and national income of country. Entrepreneurs have certain traits and
characteristics which makes them different from other business managers and make them
successful. Also, influence of various factors like background, experience etc. can either hinder
or foster the growth of entrepreneurship.
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REFERENCES
Books and Journals:
Audretsch, D. and Caiazza, R., 2016. Technology transfer and entrepreneurship: cross-national
analysis. The Journal of Technology Transfer. 41(6). pp.1247-1259.
De Bruin, A. and Mataira, P., 2018. Indigenous entrepreneurship. In Entrepreneurship: New
perspectives in a global age. (pp. 169-184). Routledge.
Devece, C., Peris-Ortiz, M. and Rueda-Armengot, C., 2016. Entrepreneurship during economic
crisis: Success factors and paths to failure. Journal of Business Research. 69(11).
pp.5366-5370.
Doern, R., 2017. Strategies for resilience in entrepreneurship: Building resources for small
business survival after a crisis. In Creating Resilient Economies. Edward Elgar
Publishing.
Edoho, F. M., 2016. Entrepreneurship paradigm in the new millennium. Journal of
Entrepreneurship in Emerging Economies.
Gwena, C. and Chinyamurindi, W. T., 2018. Effects of knowledge management on innovation
capabilities amongst small and medium enterprises in South Africa: The case of Buffalo
City Metropolitan Municipality. The Southern African Journal of Entrepreneurship and
Small Business Management. 10(1). pp.1-10.
Ibidunni, A. S., Peter, F. and Ogbari, M., 2017. ENTREPRENEURSHIP EDUCATOR'S
COMPETENCEON UNIVERSITY STUDENTS’COMMITMENT TO LEARNING
AND BUSINESS PLAN WRITING. Academy of Strategic Management Journal. 16(2).
pp.1-10.
Kantur, D., 2016. Strategic entrepreneurship: mediating the entrepreneurial orientation-
performance link. Management Decision.
Scott, J. M., Penaluna, A. and Thompson, J. L., 2016. A critical perspective on learning
outcomes and the effectiveness of experiential approaches in entrepreneurship
education. Education+ training.
Singh, S. K. and Gaur, S. S., 2018. Entrepreneurship and innovation management in emerging
economies. Management Decision.
Terjesen, S., Hessels, J. and Li, D., 2016. Comparative international entrepreneurship: A review
and research agenda. Journal of Management. 42(1). pp.299-344.
Welter, F. and et.al., 2017. Everyday entrepreneurship—a call for entrepreneurship research to
embrace entrepreneurial diversity.
Woodfield, P., Woods, C. and Shepherd, D., 2017. Sustainable entrepreneurship: another avenue
for family business scholarship?. Journal of Family Business Management.
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