Entrepreneurship and small Business Managament PDF

ENTREPRENEURSHIP AND SMALL BUSINESS
MANAGEMENT
EXPLORE EDUCATION INSTITUTE
Page | 1

Contents
1. QUESTION...........................................................................................................................................................3
1.1 Introduction:.......................................................................................................................................................3
1.2 What is Typology of Entrepreneurship?.........................................................................................................3
1.3 Entrepreneurial Ventures and Subsequent Relation to Typologies..............................................................3
2. QUESTION:.........................................................................................................................................................5
1.1 Similarities between Entrepreneurial Ventures:......................................................................................5
2.2 Differences between Entrepreneurial Ventures:.............................................................................................6
3. QUESTION:.........................................................................................................................................................7
3.1 Micro and Small Businesses- Definition:.........................................................................................................7
3.2 Micro & Small Businesses – Interpreting the Significance:...........................................................................7
3.3 Micro & Small Businesses – Impact on Economy:........................................................................................8
3.4 Economical Impact: Small, Medium & Large Enterprises:..........................................................................9
4. QUESTION:.......................................................................................................................................................10
4.1 Introduction:.....................................................................................................................................................11
4.2 Impact of Small Business to Social Economy:...............................................................................................11
5. QUESTION:.......................................................................................................................................................13
5.1 Characteristics of Successful Entrepreneurs:...............................................................................................13
5.2 Skill Sets Required to become a Successful Entrepreneur:.........................................................................14
5.3 Differentiation Table: Entrepreneurs vs. Managers:...................................................................................16
5.4 Conclusion:.......................................................................................................................................................17
6. QUESTION:.......................................................................................................................................................18
6.1 Introduction:.....................................................................................................................................................18
6.2 Aspects of Entrepreneurial Personality:........................................................................................................18
6.3 Entrepreneurial Motivation and Mindset:....................................................................................................21
7. QUESTION:.......................................................................................................................................................23
7.1 Introduction:.....................................................................................................................................................23
7.2 Background and Experience: Impact on Entrepreneurship:......................................................................23
8. QUESTION:.......................................................................................................................................................26
CONCLUSION:..........................................................................................................................................................28
REFERENCE LIST:..................................................................................................................................................29
Page | 2

1. QUESTION
Examine different types of entrepreneurial ventures and explain how they
relate to the typology of entrepreneurship.
1.1 Introduction:
Before venturing into the elements, dynamic and typologies pf entrepreneurship, we
need to first comprehend the term “entrepreneur”. Hayes (2020) defines entrepreneur
as an individual with the motivation and drive to start his own business, while being
the sole bearer of profits and liabilities (risks) involved in the business. Entrepreneurs
play a pivotal role in regulating cashflow in the market economy, due to their skills,
drive to succeed and creative and innovate ideas.
On the other hand, “Entrepreneurship”, as defined by Fidele (2019) is a pervasive
term used to describe all the process, procedures, working operations and policy
making that are entailed in the formation of a business venture. In order to ensure a
smooth sailing of one’s entrepreneurship journey, the entrepreneur himself must
develop a foresight for the risks and opportunities in an uncertain business
environment.
1.2 What is Typology of Entrepreneurship?
Typology of entrepreneurship refers to the distinguished types of entrepreneurial
opportunities and business ventures. Chen, Chang and Pan (2018) extends this
definition by stating that the purpose of typology is to enable entrepreneurs to identify
the type of business venture they want to commence. Some of these ventures can
either be small-business enterprises, medium-business enterprises and large-scale
enterprises. Microsoft, for instance, is Bill Gates entrepreneurial venture, and can be
deemed as a large-scale enterprise.
1.3 Entrepreneurial Ventures and Subsequent Relation to Typologies
 Small Scale Entrepreneurship:
In a small-scale entrepreneurship, it is usually operated by a small number of
employees, and the owner alone. In some cases, small scale entrepreneurship can also
Page | 3

be associated with sole proprietorship, as in some business, the owner himself will
take the role of an employee, a manager, a marketer, etc. In addition to this, the scope
of profitability in such ventures are limited to the capability of small business
framework. Secondly, while big business primarily focuses upon marketing products
and services, the goal of these small-scale ventures is to maximize the quality and
innovation while delivering products and services to consumers. Thus, we can say that
small scale entrepreneurships are entailed with a constant and incremental growth.
There are either individual owners, or partnerships within friends or family business
in a small-scale entrepreneurship (Drucker, 1985).
For instance, there are innumerable small-scale business businesses in the SSI (small
scale industries). The range of products and services are usually unique. Some of the
small-scale business trending today are candle-making, crafting memorabilia of passed
love ones or pets, stationery making and services like photoshop editing, resume
building, etc.
 Big Business Entrepreneurship:
Big business entrepreneurships have a fixed business life cycle. In fact, in a large
company setting most of the elements such as decision-making or embracing upon a
new endeavor follows a fixed set of protocols. While a set of organizational
regulations helps curb non-compliant behavior, it negatively affects the strategy-
building of the organization, due to the extensive scalar chain and decision-making
complexities. Howsoever, while large companies focus on innovating products or
services, and setting trends in the industry; most of these big businesses invest on
projects to improve or expand their marketing efforts. Moreover, the most
advantageous aspect of big business entrepreneurship is their ability to withstand
competition market, due to the size and skillsets of the organization, along with the
ability to gain credit, investors and other sources of capital to produce larger volumes
of products or services (Chepurenko and Sauka, 2018).
For instance, agrochemical companies are blooming in the agricultural industries, and
3D print and modelling companies are also gaining popularity in the techno-industry.
Page | 4

 Social Entrepreneurship:
In a social entrepreneurship, the primary goal of the organization is to provide welfare
that benefits the community. The organization does not operate on a profit motive,
rather they focus on producing products and services that are aimed in contributing to
the society in an effective manner. The motivating factor that drives these
organizations to work towards making a better world for people, is to address social
issues like child labor, injustice to transgender women, and others (Aquino, Lück and
Schänzel, 2018).
For instance, one prime example of social entrepreneurship is micro finance
institutions, which are banks that provide loans for the low-income groups of the
society. This protects them fr4om the excessive interest rates charged by loan sharks.
Another example of social entrepreneurship is SHE (Sustainable health enterprises)
which is an African firm focused on serving feminine hygiene products to the rural or
homeless women who do not have access to them (Sustainable Health Enterprises,
2021).
2. QUESTION:
Explore the similarities and differences between entrepreneurial ventures.
1.1 Similarities between Entrepreneurial Ventures:
Basis Sole Proprietorship Partnerships and LLC
Licensing Although it is not mandatory to register a
business under a sole proprietorship, in
order to carry out a certain type of because
activity, certain state or country’s laws
require licensing and registration of the
firm. If the owner decides to globalize his
business, he will also need to obtain certain
international licenses.
Licensing and registrations are required at
the very formation of the business. No
partnership or LLC activity can be deemed
lawful without the evidence of relevant
licenses and registration of business
activities. It is also important to note that
partnerships under these business activities
are registered only for conducting legal and
Page | 5

lawful business operations.
Start Up
Costs
the reason why sole proprietorship is a
popular entrepreneurial venture, is because
of the business in its setup. This means
that, since entrepreneur has sole control
over his business approaches, he can easily
setup a business, without incurring
expenses, or making heavy investments.
Apart from the registration fee, partners
ought to contribute their substantial share
towards the formation of a strategic
alliance. However, the amount of
investment or capital resource is flexible,
based upon the terms and conditions
mentioned in the partnership contract.
There need not be a minimum requirement
of capital to setup a business, partners and
shareholders of LLC can contribute
according to their wishes.
Taxes &
Debts
In matters of debt, the personal assets of
proprietors are held accountable, should the
firm incur and losses. Similarly, taxes
charged for the company, are generated
under proprietor’s income tax accounts.
Here, the partners are equally indebted for
the losses and liabilities incurred by the
business. However, the personal assets of
the partners are not accounted for these
debts. In a partnership firms or LLC
organizations, the taxes are deducted under
separate profit and loss accounts created
solely for the organization.
--(Miller ,2019)
2.2 Differences between Entrepreneurial Ventures:
Basis Sole Proprietorship Partnerships and LLC
Proprietorship Since the sole proprietor is the key owner
of the company, he/she will continue tot
reign over the organization, even if its
business models change, or it develops on
a larger scale.
In the case of, partnerships and LLC
though, as the business grows; there is an
automatic change on the legal structure of
the company. This means that, when a
partnership firm is expanding the number of
partners in the firm are also increasing.
Hence, there is a gradual development
change of the organizational structure from
Page | 6

partnerships to limited liability company.
Setting Up a
Business
Since sole proprietorship and the
organization share the same legal entity,
there is no requirement under law, for a
sole proprietor concern to be registered, in
order to start a business.
Pre-registration, respiration, licensing and
permits are required during the incubation
stage of a partnership or LLC concern.
Both, the partners and the firm are separate
entities. Hence, company under partnership
needs to be registered under separate name,
bank accounts, address, etc.
Borrowing
Capacities
Financial institutions are reluctant to
provide sole proprietors with loans
exceeding a certain limit. This is because,
since both the firm and the owner share
the same entity, banks and financial
institutions lack the motivation to provide
these firms with a substantially large
amount of capital.
Partnerships and LLC organization have
better borrowing capacities form banks
another financial institution. This is
because the credit score of all the partners
together, enable the firm in securing large
loans from the banks. Also, should the firm
enter into a dissolution phase, banks can
easily seize the assets of the business.
-- (Lazzari, 2018)
3. QUESTION:
Interpret and assess how micro and small businesses impact on the economy.
Also evaluate the difference small, medium and large businesses are making to
the economy. (Use relevant data and statistics)
3.1 Micro and Small Businesses- Definition:
Micro and small business enterprises are the legal structures of organizations that play
a pivotal role in the contribution of GDP and cashflow into the nation’s market
economy. In addition to this, due to the versatility of the market, i.e., the free entry
and exit nature of firms, micro and small businesses are the popularly desired business
ventures for first time business owners in the country. (Rao, 2020)
Page | 7

3.2 Micro & Small Businesses – Interpreting the Significance:
 A sustainable market economy is an economy that has abundant employment
opportunities, good GDP growth rate and a healthy cashflow of foreign
exchange. Hence, the micro and small business organizations play a vital role in
providing employment opportunities to the youth, while fulfilling consumer
needs and demands by providing them with a plethora of products and services
in the domestic market (Mshenga and Owuor, 2010).
 Secondly, micro and small business enterprises help in the social economic
development of rural and backward areas of the country. Thus, we can say that
the primary goal of micro and small business enterprises is to promote
modernization of cities and towns to the rural and sub-urban areas of the
country (Nafukho and Helen Muyia, 2010).
 Another fundamental benefit of micro and small business enterprises is that
they help boost cash flows into the country’s economy. Case in point, when
more micro and smaller businesses are setup, more business transactions take
place, and an even larger number of publics are employed. Along with this,
exporting and importing of products and services further aides into the injection
of foreign income in the cashflow of the economy. Thus, country’s foreign
exchange rates are improved, and recession is managed (Uwonda and Okello,
2015).
 To reiterate the previously mentioned statement, apart from helping with the
foreign income of the country, the import and export factor of micro and small
business enterprises will also enhance the firm’s global investment
opportunities. There is an added advantage of liberal trade regulations, EXIM
and tariff policies (Hassan and Ahmed, 2016).
Page | 8