The Importance of Entrepreneurship

This assignment delves into the importance of entrepreneurship in various aspects of society, including economic development, innovation, and job creation. It discusses how entrepreneurs contribute to the growth of economies by generating employment opportunities, earning revenue, and creating innovative products and services. The assignment also touches on the role of family support in entrepreneurial success stories, such as Mark Zuckerberg's creation of Facebook. It concludes that entrepreneurship is essential for economic flourishing and growth, making it a crucial asset for every country.

Entrepreneurship and Small
Business Management
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Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Different types of entrepreneurial ventures and the way they relate to the typology of
entrepreneurship...........................................................................................................................3
P.2. Exploring the similarities and differences between entrepreneurial ventures......................4
TASK 2............................................................................................................................................6
P.3. Illustrating the way micro and small businesses impact on economy..................................6
P.4. How small businesses and business start –ups will contribute to the growth of the social
economy after
‘Brexit'.........................................................................................................................................7
TASK 3............................................................................................................................................8
P.5. Explaining the characteristic, traits and skills of successful entrepreneur which
differentiate them business manager............................................................................................8
P.6.How entrepreneurial personality reflect entrepreneurial motivation and mindset................9
TASK 4..........................................................................................................................................10
P.7.Examine how background and experience can hinder or foster
entrepreneurship(support answer with an example)..................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
Entrepreneurship refers to designing, setting and launching up of new business which is
initially a small business. These individuals alone bare all the risks and rewards of venture. There
are four types of entrepreneurship. Some of them are small, scalable, large and social. Report
will discuss impact of small firm on economy. Furthermore, it will describe different
characteristics, traits and skills of successful entrepreneur. It will emphasis on person's
background, culture that impact on their entrepreneurship. Report will also discuss personality of
entrepreneur which shows the mindset and motivation. This is necessary because the person
who has attractive personality will become successful entrepreneur. There are certain qualities
which are required in the person. The report will more study about cultural background and
experience which can create hurdles in growth of firm. The talent and skill requirement is needed
to become successful entrepreneur. These are the basic things which has to be there.
TASK 1
P1. Different types of entrepreneurial ventures and the way they relate to the typology of
entrepreneurship
Entrepreneur refers to an individual who runs a business with limited resources and take
in account all the profits and risks associated with their venture. These people bring new ideas to
market and anticipate current and future needs of economy. Different types of entrepreneur
ventures are: Small Business Entrepreneurship: These are grocery stores, hairdressers, local and
regional supermarkets, internet cafe, electrician, etc. These individual hire family
members or local employees to operate their business. Motive of these entrepreneurs is to
feed their family through business, rather than profit maximisation. These ventures could
not atract large scale capital due to this they obtain money from there family and friends
for running their business operations. Scalable Entrepreneurship: These ventures are different from small scale business. This
type of entrepreneur starts up a company with a different vision and focus more over
quality and creative aspects in work. This is the reason they employ highly efficient and
competent workforce who share different vision. This form of venture involves higher
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amount of risk and requires a large amount of capital to support growth and expansion of
business (Baum, Frese. and Baron, 2014). Large Company Entrepreneurship: This refers to large corporations who have finite life
cycle and sustainability mainly because of persisting products and services in the market.
Many large companies grow because of sustaining innovation in their existing
products/services. But due to change in taste, preferences, choices and demands of
consumer which force large companies' to bring innovations in their products, either by
entering into new markets or through producing a complete new products to be sold in
existing market. For example; IKEA, Tesco are working as big organization. These firms
contribute well in economic development of nation. They generate high profit and
provide high quality goods and services to consumers so that they can feel satisfied
(Kirzner, 2015).
 Social Entrepreneurship: This form of venture focuses over the needs and demands of
society and fulfil them. Unlike, other entrepreneurs there focus is to produce those
products/ services which meets demands of the society. They work towards concept of
making world a better place. These kinds of entrepreneurs can be Non-profit, Hybrid or
for profit.
Relation to Typologies of Entrepreneurship: Serial Entrepreneur: It refers to those entrepreneurs who often come up with new ideas
and help in establishing new business. Unlike other entrepreneurs, serial entrepreneurship
provides new ideas and help in getting things done and then passes on the responsibility
to others with looking for other new venture and ideas. Female Entrepreneur: In these forms of ventures, women or group of females organise
or arrange all the factors of production, provide employment to individuals and undertake
all the risks of business. It is an innovative concept.
 Social Entrepreneur: This kind of entrepreneur develops funds and help companies or
small businesses with finding solutions to cater environmental, social and cultural
problems (Drucker, 2014).
P.2. Exploring the similarities and differences between entrepreneurial ventures
Similarities between Social and Scalable Entrepreneurship are:
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 These ventures support a vision of making world a better place through their collective
efforts of providing a unique vision and by fulfilling needs of people.
 Both ventures run for a profit motive.
 It requires a large amount of capital venture to support their business.
Differences between them:
Basis Scalable Entrepreneurship Social Entrepreneurship
Location They are increasing number and
require specific location for expansion
and growth of their venture.
These are limited in number.
Exit Strategies. They have limited strategies as they are
new in market.
It has ample of exit strategies
and can exit whenever they
need.
Donation They do not provide any form of
donation.
Social entrepreneur provides
donation for social causes.
Investment These types of entrepreneur attract
investment from venture capitalists.
The investment is gained from
individual contribution.
Risk There is high amount of risk as they
attract all types of risky capital (Kuratko,
2016).
There is less amount of risk as
they do not make profits by
benefiting products.
Purpose The main purpose of scalable
entrepreneurship is to earn profits by
providing quality products and services.
The main purpose of social
entrepreneurship is to provide
services to society for non-
profit basis.
Motive Main motive is to earn profits quite
effectually.
Main motive is to serve society
and provide goods without
gaining any profit (Santos,
2012).
Similarities between Small scale and Large Corporations Entrepreneurship are:
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In both ventures' entrepreneur employs there family members.
Entrepreneur has exit strategies in context of their specific business.
Differences between them:
Basis Small Scale
Entrepreneurship
Large Corporations
Entrepreneurship
Organisational Structure These forms of venture do not
have any specific structure.
It has a proper organisational
structure so that all activities
of company are performed
properly.
Working hour They have specific working
hours.
In large companies, employees
have to work for an extra hour
when required.
Profit Motive Small scale entrepreneur
works to feed their families.
Main aim of these
entrepreneurs is to have profit
maximisation.
Structure This entrepreneurship operates
on small basis as they are
travel agents, store fonts which
do not have organised
structure (Schaper and et.al.,
2014).
On the other hand, these
corporations have defined line
of authority and tasks are
allocated to every individuals
to avoid duplication of work
quite effectively.
Funds They generally garner funds
from friends and family or
loans.
On the other hand, large
corporations have enough
sources of raising funds such
as from debt, equity and
related sources.
Operations They are operated on small
basis and as such, profits are
less.
While, large corporations'
entrepreneurship has
diversified operations which is
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used to achieve tasks in
effective manner. Hence,
revenue earned is more as
well.
TASK 2
P.3. Illustrating the way micro and small businesses impact on economy
Small business ventures are the backbone of UK economy. Most people are well aware of
the impact they are creating in country. Being the base of innovation and new ideas, they
generate possibility in growth and expansion of economy. UK has shown a massive record of
start-up in the past few years and this trend is going on.
The impact of micro and small business on economy is: Employment: Small scale venture helps in reducing unemployment in economy and
provides high contribution in job creation in the UK. Depending upon the size of
ventures, they employ in different proportions. The total employment in SME was 15.7
million that constitutes around 60% of total population. Whereas, small business has
employed 12.5 million people (Devi and Goswami, 2014). Turnover: It is an important aspect to calculate the economic growth and contribution by
any sector in society. Micro business has provided impressive figure and given combined
contribution of £1.8 trillion in the beginning of 2016 which constitute of 47% of total
contribution of private sector. Growth: These businesses show an excellent growth in the past few years. Innovation is
the key success for growth of such ventures. SME keeps the market fresh and generates
opportunities for unproductive and stagnant firm. These ventures reported an immense
growth of 50% in from beginning of 2016. It plays a key role in lifting economy of UK
from global recession of 2008 (Vesperi, Reina and Gentile, 2015).
 Impact on Industry: UK comprises of two main types of industries which are,
manufacturing and retail. SME dose a maximum contribution towards these industries.
Almost very three business out of ten small ventures fall into this category. This makes
micro and small business as an important part of economy of UK.
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 They have shown a great impact on the UK economy and thus, they are a vital part of
industry and needs to be supported with proper funding.
P.4. How small businesses and business start –ups will contribute to the growth of the social
economy after
‘Brexit'.
Brexit is a termed used in relation to withdrawal of UK from European Union on June 23,
2016. This withdrawal has changed scenario of UK economy. It has brought several amounts of
changes in working of various sectors of economy. The impact of Brexit on small and medium
size business has shown positive effect. The Small scale industry like engineering and service
sector has shown a growth with increasing number of client from other parts of Europe.
Contribution of Small Business and Start-up are as follows: Gross Domestic Product: The large part of UK GDP is build up by small scale
Industries. These ventures are lifeblood of the economy of UK with increase in sales of
products/service provided by them it has boosted the GDP of country to 0.5%. This graph
has shown a good growth after post Brexit. E-business: The Brexit has provided opportunity to small business and ventures who can
expand there business to other areas of Europe. The small scale industries has helped in
flourishing E-business of UK as due to financial crisis the large scale industry cannot
operate properly (Woodward, Wojnicka and Pander, 2012). Better products/service: After Brexit many customers prefer to spend money over better
quality products/services. The small and micro industries has served the concept by
providing quality rather than quantity of product. Help in being Self-sustain: The growth in small scale industry in UK help in being self-
sustain in producing essential goods for economy. They have promoted local economies
by creating more stable structure. Small scale business has helped in forming multiple
small industries and reduces dependence on fewer large companies. Provides Sustainability and Stability: It has offer sustainability in working of economy
by providing stability in workplace for base line employees. Further, it helped in
achieving concept of “buy-local” which promotes employment and generate revenue to
economy(Hangarki and Hangarki, 2012).
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 Opportunities for New Venture: Small scale business has helped many employers to
enter into new ventures to expand it business and increase it profits. After Brexit, a new
venture i.e. electronic cigarette industry was developed which shows a rapid expansion. It
was possible due to small scale industries of UK. Similarly, new shops are opened daily
which sell there products both on street of UK and over online platforms.
TASK 3.
P.5. Explaining the characteristic, traits and skills of successful entrepreneur which differentiate
them business manager.
Entrepreneur is the person who is made his own company with innovative ideas but
manager is person which is working for the firm. One is working for its own and another which
is working under firm and can't work for himself (Bytyçi, 2015). He is governed by superior
person. In this Bill Gates has started his entrepreneur in computers and Anita Rod dick in retail.
Some characteristics which make clear their roles are :
Skills Innovation – in entrepreneur creativity is more important in product and services. Person
who is starting new business has to work on the this. It makes the product different from
others. Similarities are more than something new. But in case of manager this skill is not
much needed in doing work. Requirement is modifying the working manner. It is very
much required because they get bore while doing the same work again. The main work is
applicability of management principles in various situation.
 Risk - Manager as well entrepreneur has risk in their profession. Bill Gates is known
name but if he has not taken risk about starting a venture then his hidden talent cannot
came out in front of people. Sometime failure is also there in taking decisions but it can
be a learning experience. He has look to after overall activities of firm. In business
manager his decisions regarding his profession can be different. Mostly he has to manage
the regular activities which are prevailing (Catalina, 2013).
Characteristics and traits Planning - entrepreneur has make decisions looking for future. Before launching any
product Bill Gates has done market research and according to that what are the future
requirements are known to him. This is resultant of future planning. Sometime situation
are there in which organisation present decisions are affecting future as well. Manager
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need not to plan things. Every situation is new and applicability of principle are different.
He has to face the present circumstances and there is no use of making future planning.
 Advantage of competitor – entrepreneur on continuous basis doing improvement in the
product from which he is ahead of its contenders. Understanding of market made his
move. In case of manager foresightedness is not needed. All the work are done looking
towards the present condition (Cantaragiu, 2012).
P.6.How entrepreneurial personality reflect entrepreneurial motivation and mindset.
Entrepreneur poses various traits and skills like risk taking, innovation, developing new
ideas. These skills of entrepreneur make them a successful business person. These aspects
contributed by entrepreneur shows that there is great correlation between the motivation and
mindset of entrepreneur with there personality. The term entrepreneurial mindset refers to have
specific set of mind which orientates human towards those activities which are required to be
conducted by an entrepreneur. It means an individual should have a mindset which draws
innovative ideas and opportunities. Anita Roddick a co founder of Body shop a famous cosmetic
company that deals in natural beauty products. The charismatic personality and clear vision has
helped her to stand alone and be an entrepreneur. This help her to make difference between other
business manager and herself. Roddick has faced hardships in her early days when she opened
her initial store in 1976, this shows her quality of being independent and freedom oriented
person. Anita was innovative person as she opened a shop with a vision of providing quality
products in market. Entrepreneur motivation which drives her to make a voluntary contribution
towards society. She became human right activist and started campaigning on social issues.
Bill Gates who is the owner and founder of Microsoft Corporations. William Henry Gates
was born and brought up in an environment of freedom and creativity this made him pursue his
dreams and become an owner of leading personal computer software company. Gates has a risk
taking quality which made him different from others, he took a risk of dropping his career and
opt for starting his own software company. This trait of Bill Gates made him today the world
richest man. Gates after leaving Microsoft decided to become a philanthropist, author, investor
and humanitarian this shows the skill of being a visionary and creative. During his career in
Microsoft, Gate has held many position like, chairman, CEO and chief software architect this
shows how persuasive he was. Bill Gates has an excellent management style which help him to
understand there fellow mentors and collogues he used to make a regular visits to check on the
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strategies and there risk to the business these skills contributed towards overall mindsets and
entrepreneurial motivation.
TASK 4.
P.7.Examine how background and experience can hinder or foster
entrepreneurship(support answer with an example).
Experience and background of an individual plays a great role in formation of person as
an entrepreneur. The traits, characteristics and skills poses by each entrepreneur is different.
They have different approaches when it comes to decision making or business. Traits like self-
management, motivation and confidence, etc. are derived from education and life experiences.
These factors foster or hinder the growth of entrepreneur and help individual to overcome all
challenges and obstacles that arises in there journey. To show how they affect an
entrepreneurship here is an example of a great entrepreneur known as Mark Zuckerberg.
Zuckerberg co-founded a social networking website which is popularly known as
Facebook from his college dorm room. He was passionate towards his interest in computers and
he developed his interest in it at very early stage. The software developed by him was used by
his father in his dental shop. This encourages him to pursue his career into this field. Being,
having a strong family support has encouraged him to be strongly committed towards it dreams.
Assessing a positive attitude towards life and clear business vision is formed through educational
and life experience he received. Entrepreneur has an ability of taking risk and this made him
different from others, Mark Zuckerberg has taken huge risk of dropping his educational career
and developing a software program. This step taken by him shows that he has capability of
taking risk and creating different from others. The reason behind his huge step is because of
having a strong family support who believes in his idea. Zuckerberg has a innovative mind he
developed a website which allows people to create their own profile and get connect to there
friends and other people around them. This innovative vision of Mark has made Facebook one of
the largest operating website with more than 6 billion users from around the world.
CONCLUSION
Entrepreneur is important assets to economy of every country, they encourages
innovation and new ideas in market. The entrepreneur help economy to flourish and grow as they
generate employment for large number of people. Further, they help in earning huge amount of
revenue and contribute large job creations.
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REFERENCES
Books and Journals
Baum, J. R., Frese, M. and Baron, R .A. eds., 2014. The psychology of entrepreneurship.
Psychology Press.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
Kirzner, I. M., 2015. Competition and entrepreneurship. University of Chicago press.
Kuratko, D. F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Santos, F. M., 2012. A positive theory of social entrepreneurship. Journal of business
ethics. 111(3). pp.335-351.
Schaper, M. T. and et.al., 2014. Entrepreneurship and small business.
Devi, A. and Goswami, G., 2014. Women enterpreneurship development in Assam with special
reference to Kamurp district, India. The Clarion. 3(1). pp.149-156.
Vesperi, W., Reina, R. and Gentile, T., 2015, September. Academic Knowledge Vs
Enterpreneurship: The Spin off way. In European Conference on Knowledge
Management (p. 828). Academic Conferences International Limited.
Woodward, R., Wojnicka, E. and Pander, W., 2012. Innovation Systes and Knowledge-Intensive
Enterpreneurship: a Country Case Study of Poland (No. 0446). CASE-Center for Social
and Economic Research.
Catalina, I. C., 2013. SOCIAL ENTREPRISE-THE ENGINE OF SOCIAL
ENTERPRENEURSHIP. Managerial Challenges of the Contemporary Society.
Proceedings. 5. p.77.
Cantaragiu, R., 2012. Towards A Conceptual Definition Of Academic Enterpreneurship. In 5th
Annual EuroMed Conference of the EuroMed Academy of Business, Glion-Montreux,
Switzerland.
Bytyçi, I., 2015. Enterpreneurship and Inovative SME’S as a key of Economic Development–
Kosovo case. European Journal of Business Economics and Acountancy, 2015 (14-21).
Hangarki, S. B. and Hangarki, K. B., 2012. Development of women enterpreneurship in
India. International Journal of Marketing and Management Research. 3(1). pp.26-37.
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