Entrepreneurship and Small Business Management

This report discusses the types of business ventures considered entrepreneurial, the impact of small businesses on the economy, the traits and skills of successful entrepreneurs, and the contribution of SMEs to the social economy.

ENTREPRENEURSHIP AND
SMALL BUSINESS
MANAGEMENT
1 | P a g e

Table of Content
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
Covered in PPT.......................................................................................................................3
LO 2.................................................................................................................................................3
P3 Present and interpret data and statistics in order to illustrate impact micro and small
business on economy..............................................................................................................3
P4 Importance that small businesses and business start-ups on the growth of the social
economy.................................................................................................................................6
M2 Evaluation of SMEs and large businesses contribution to the economy.........................7
D2 impact that small businesses have on different levels of economy..................................7
LO 3.................................................................................................................................................7
P5 Characteristic traits and skills of successful entrepreneurs that differentiate them from
other business managers.........................................................................................................7
P6 Assessing aspects of the entrepreneurial aspects personality reflect entrepreneurial
motivation and mind-set.........................................................................................................9
LO 4...............................................................................................................................................10
P7 How background and experience can hinder or foster entrepreneurship........................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
2 | P a g e

INTRODUCTION
Discovering the need in the market as well as launching the new business in order to achieve
such needs by an individual is known as entrepreneur. Entrepreneurship is an activity to set up a
business. Thus, with the hope for profits entrepreneur tends to take financial risks. Every
business heart is its entrepreneurship. Entrepreneur tends to lead the organization which was
once a small business. In established organization too there is a demand for entrepreneurial
skills, thus for survival entrepreneurial skills are necessary. For step by step building of skills of
entrepreneurial, entrepreneurship sequence is been designed. In order to start a business or in
order to achieve employment in the growth oriented small business by an individual,
entrepreneurship and small business management is studied. All the operators of the business
such as owner-manager, franchiser, and owner of family firms are considered to be the
entrepreneur. A business is said to be small if it is consists of low value of assets, low sales
volumes as well as fewer number of employees are present in the business. For example a nearby
Toyota showroom could not be said as small business but a nearby bakery or restaurant could be
a small business. In this report it has been discussed the types of business venture which could be
considered entrepreneurial, followed by impacts of small business on the economy of the
country. In this report it has also been discussed the determination of various key aspects present
in the entrepreneurial mind-set. Moreover, this report gives the evidence of various environments
which could hinder or foster the entrepreneurship.
LO 1
Covered in PPT
LO 2
P3 Present and interpret data and statistics in order to illustrate impact micro and small business
on economy
SME’s contribution on Hertfordshire of a country is quite high as compared to other kind
of town. It has also been observed that number of small and micro sized businesses are
continuously increasing in all the sectors (Stankovska, Josimovski and Edwards, 2016). Not only
is this, in fact products or services provided by SME business organizations quite high as
compared to other kinds of organizations. Overall economy of Hertfordshire is majorly impacted
because of micro and small businesses. According to a research below table has been explained
3 | P a g e

which will help in demonstrating following things such as: number of SME, number of
employees business, employment provided, and annual turnover of all kinds of businesses.
Figure 1 table illustrating business, employment and turnover of small, micro and medium and
large organizations
From the above table it can be clearly explained that number of small and micro sized
business more in number as compared to medium and large businesses. As per the table it can be
said that number of SME start-ups are more than 99% and rapt 1% are medium and large
businesses. Micro businesses are those that have mot more than 0 to 9 employees and maximum
percentage of business according to the above graph are micro businesses whereas 4% of
businesses are small business that employees not more than 50 employees.
According to another research that was conducted by (Ingirige and Wedawatta, 2018)
following graph also helps in explaining businesses, employment and turnover of SME’s in
Hertfordshire.
4 | P a g e

Figure 1 Graph illustrating SME business in UK
From the above graph it can be clearly explained that small businesses plays a vital role in
impacting the overall economy of Hertfordshire. According to the graph maximum employment
is provided by small businesses i.e. approximately 48%. However turnover of large organizations
is quite high as compared to small businesses as small businesses only have 37% turnover. As
per this research data there are maximum number of small business organizations present in
Hertfordshire i.e. more than 99.3% rest of the business comes under .7%.
Below table explains number of businesses that are register under VAT and PAYE. All the
statistics within the table has been explained according to the type of businesses and according to
the graph it is clear that maximum number of businesses that are registered under VAT and
PAYE are micro and small business and rest of the others are medium and large business
organizations. This table also helps in explaining that maximum number of small and micro
business register under Vat and PAYE are Hertfordshire as compared to other region.
5 | P a g e

Figure 1 Number of businesses registered for VAT and PAYE
P4 Importance that small businesses and business start-ups on the growth of the social economy
Social economy is mainly formed by various kinds of enterprises that shares common
features and values. There are four main pillars on the basis of which social economy can be
explained and its importance in small businesses can be understood such as: mutual, foundations,
charities and associations (Wellalage, Locke, and Samujh, 2018). On the basis of these four-
social economy of a country is explained.
Mutual: these types of organizations focus on fulfilling needs and desires of people.
Foundations: these types of organizations focus on improving standard of living of people and
also works for social purpose.
Charities: these are non-profitable organizations that work for needful or vulnerable people as
well as also focuses on raising money for them.
Associations: These are type of organizations that are formed by a group of people that works for
same of common social purpose.
SME’s and start-up businesses plays a vital role in growth of social economy. First of all
SME’s helps in enhancing employment opportunity for people of Hertfordshire. If these
organizations work together with their employees and focus on achieving their goals and
objectives then they have high chances of enhancing their business. For this government also
focuses on providing support to such organizations so that they can grow and enhance their
business through which they can further work on increasing social economy of Hertfordshire. If
6 | P a g e

these SME’s enhance their business then chances of employment within these organizations also
increases drastically (Bahari, Yunus and Jabar, 2018). Other than this SME’s also contributes in
bringing growth within local economy of Hertfordshire with increases chances of innovation. In
order to support these organizations government, provide funds to these SME organizations so
that they can focus on enhancing their growth and implement their innovative ideas this will not
only help the organization to enhance their infrastructure but it also helps in enhancing
advancement in technology and economic growth of Hertfordshire.
M2 Evaluation of SMEs and large businesses contribution to the economy
According to the graph explained above it can be said that SME and large businesses
majorly contributes in development and growth of Hertfordshire. It not only helps in bringing
growth, development and innovation but it also helps in enhancing or open gates for countries for
various kinds of business opportunities. Both SME and large organizations not only helps in
increasing employment opportunities for people in a country but it also helps in increasing
number of businesses and turnover of the organizations that further contributes in growth of
economy of Hertfordshire. Contribution of SME in providing products and services to people is
much higher than medium and large organizations however there is no doubt that products or
services provided by large organizations are high in value, quality and because of which many
people still prefer to buy their products and services due to which their contribution to the market
increases.
D2 impact that small businesses have on different levels of economy.
A different level of economy small businesses has different impact at local or national level
they have major impact as they operate at local and national level more as compared to
international level plus in order to survive in national market they need to continuously bring
upgradations within themselves so that they can gain competitive advantage and contribute at
local or national level.
LO 3
P5 Characteristic traits and skills of successful entrepreneurs that differentiate them from other
business managers
Any business involves a slight level of risk and entrepreneurs who start up knows it. Still they
have the courage to take risk. Different entrepreneurs have different set of values and beliefs. For
instance Richard Branson (Bogdanova and et.al. 2016) believes that every individual works and
7 | P a g e

crates his own luck according to their potential and the risk they take to start up a business and
manage it so that they can achieve success.
Traits of entrepreneurs and differentiation from Business Managers-
Richard Branson is a successful entrepreneur and that inspires and motivates people.
According to him no one gets success in their work at the first attempt one learn from his
mistakes and in the process one must does not lose hope as they will get other chances to win
and achieve success. Entrepreneurs such as Richard Branson believes that before making a move
strategy needs to be formulated so that they can predict the outcome and possibilities in a better
way. They believe that managing a business is like playing the game of chess and any mistake or
error they make can be rectified in the next move. If they stuck at the failed move and fear to
take another step then they won't be able to make progress and achieve success. On the other
hand people such as business managers helps people to motivate the company internally.
Whatever they do stay inside the walls of the company it states that their work does not influence
other people or inspire others who are not part of the company.
Skills of entrepreneurs and differentiation from Business Managers-
Entrepreneurs possess skills which helps them to achieve their purpose and objectives.
Vision of the entrepreneurs are solely focused on achieving the goals and target they have set.
Entrepreneur is the one who is able to (Wang and Liu, 2016) generate ideas for the company and
business managers of the company are the ones who follows it as instructed by them. Many of
the entrepreneurs generate their innovative ideas on their own personal issues that they have
faced earlier in life. For instance J.K. Rowling began the story of Harry Potter when she got late
for catching up a train from London. She worked on it for 6 years and then published the first
part of the novel and the reason behind her success was that she never stopped considering
anything new as an idea she took it as a plan of action and tries to implement in her story.
There are some drivers for motivation such as they have clear goals for where they have
to reach according to their mission. Entrepreneurs must know what the demands of the market
are and what the people are expected from them so that they can work accordingly which will
satisfy the needs of people. Entrepreneurs such as J.K. Rowling had goals with clear vision
which helped them to finish the end of the story which met with the expectations of people.
8 | P a g e

P6 Assessing aspects of the entrepreneurial aspects personality reflect entrepreneurial motivation
and mind-set
Mindset and motivation of entrepreneur can be explained with the help of big 5 trait model
Openness-
This aspect highlights the skills and qualities that the entrepreneur possess such as power
of imagination, level of prediction and insight. (DeTienne and Wennberg, 2016) Entrepreneurs
who possess these skills or qualities are meant to be successful. They have the curiosity and they
are always keen to know more about things so that they can possess more knowledge about
things and be updated which will help them to keep up with others and formulate new and
innovative ideas. For instance idea of writing Harry Potter was formulated by J.K. Rowling after
she missed her train in London. The knowledge they possess helps in bringing change in trends
or in lifestyle of people. They learn new things and then work on simplifying the process.
Entrepreneurs are more creative as believe in trying new things and if they don't then they will
face difficulties in playing their role.
Conscientiousness-
Entrepreneurs who have good control above the factors which affects their working or the
decision they take can easily achieve the goals they have set as a target. Richard Branson started
his company Virgin group never stopped imagining things. Branson always put his mind into
working so that he can think about the next strategy or work on solving the cause. Entrepreneurs
such as these are worried or stressed about their work so that they complete the work before the
deadline.
Extraversion-
This aspect is also known as extroversion. Entrepreneurs who possess skills such as
talkative, philanthropist etc. trait is termed as an extraversion. For instance J.K. Rowling had a
lot of wealth and she was a billionaire and she lost that tag after becoming a millionaire as she
donated a lot of her incomes into charity. Apart from that in an interview she also opened up
about her real life experiences and issues such as her divorce from her husband and issues related
to monetary aspects.
Agreeableness-
Entrepreneurs who agrees to someone's point of view easily are those who possess this
trait. While writing her novel J.K. Rowling always listened to her advisors or subordinates who
9 | P a g e

were working as a team with her and their advice helped her to form the last part of the novel
which was appreciated by everyone. Apart from this Richard Branson was very young when he
started working but he met a lot of other experienced entrepreneurs who helped him at that time
by teaching him the right way.
Neuroticism-
This trait tells about the mood swings of an entrepreneur or how he or she gets sad which
is all related to instability of emotions. People who has a high level of this trait will face these
issues frequently and a lot whereas people (Gielnik, Zacher and Schmitt, 2017) who are low on
this trait don't have to work up or be concerned about these problems. For instance J.K. Rowling
faced many issues such as problem related to money or her husband leaving her which states that
she was low on this trait.
LO 4
P7 How background and experience can hinder or foster entrepreneurship.
Richard Branson-
Background-
Richard Branson is a British born entrepreneur who is an author, philanthropist and
investor. He founded his company in 1970 as Virgin Group and with the help from that he has
taken shares in over 400 companies which deals in different sector. He started his business after
dropping out of school at age 16. At the beginning he started the business of mail order record
business and after that he expanded his business by opening record stores by the name Virgin
stores which he changed it to Virgin mega stores. After that he started the business of airlines in
1980 by Virgin Atlantic airlines. Then in 2004 he opened up his new venture by the name Virgin
Galactic which he opened up with very few and less resources such as space ship and space port.
Personal Experience-
Branson has learned from many experienced professionals at a young age who guided
him the right path which has helped him to tackle his competitors. Branson has achieved success
by keeping the business of its companies successful such as Virgin Mobiles, Virgin Airways and
many other businesses under his name. Buckingham Palace awarded him the honour of knight
for the work he did in 2016. Also Forbes listed him as a Billionaire.
J.K. Rowling-
Background-
10 | P a g e

She is a multi-talented entrepreneur as she is a philanthropist, author, screen writer and
producer for shows. Till date she (Landstrom and et.al. 2016) is known for her series of Harry
Potter. She has also gotten various awards for that as the series sold more than 500 million copies
which helped it to gain the title of bestselling book in the history. She has produced films on the
basis of novel.
Personal Experience-
J.K. Rowling was the first person who become a billionaire as an author but she lost that
title as she donated hefty amount into charity. Even after that her current net worth is 600 million
Euros which makes her 197th richest (Kuratko, 2016) in the country. She has donated 1 million
Euros for the labour party. Currently she is the president of a charitable organization named
Gingerbread. She also has some position in the politics of the country.
CONCLUSION
This report can be concluded as, discovering the need in the market as well as launching the
new business in order to achieve such needs by an individual is known as entrepreneur.
Entrepreneurship is an activity to set up a business. Thus, with the hope for profits entrepreneur
tends to take financial risks. Every business heart is its entrepreneurship. Entrepreneur tends to
lead the organization which was once a small business. In established organization too there is a
demand for entrepreneurial skills, thus for survival entrepreneurial skills are necessary. For step
by step building of skills of entrepreneurial, entrepreneurship sequence is been designed. In order
to start a business or in order to achieve employment in the growth oriented small business by an
individual, entrepreneurship and small business management is studied. All the operators of the
business such as owner-manager, franchiser, and owner of family firms are considered to be the
entrepreneur. A business is said to be small if it is consists of low value of assets, low sales
volumes as well as fewer number of employees are present in the business. Thus, in this report it
had been discussed the different types of business venture which could be considered
entrepreneurial, followed by impacts of small business on the economy of the country. In this
report it had also been discussed the determination of various key aspects present in the
entrepreneurial mind-set. Moreover, this report gave the evidence of various environments which
could hinder or foster the entrepreneurship.
11 | P a g e

REFERENCES
Books and Journal
Bahari, N., Yunus, A.R. and Jabar, J., 2018. Entrepreneurs’ Personal Characteristics, Market
Orientation and SME’s Firm Performance: Moderating Effect of Secondary and Tertiary
Education Level. Advanced Science Letters. 24(4). pp.2789-2792.
Bogdanova, S.V and et.al.,2016. Management of small innovational enterprise under the
conditions of global competition: possibilities and threats. European Research
Studies.19(2). p.268.
DeTienne, D. and Wennberg, K., 2016. Studying exit from entrepreneurship: New directions and
insights. International Small Business Journal.34(2). pp.151-156.
Gielnik, M.M., Zacher, H. and Schmitt, A., 2017. How small business managers’ age and focus
on opportunities affect business growth: a mediated moderation growth model. Journal of
Small Business Management.55(3). pp.460-483.
Ingirige, B. and Wedawatta, G., 2018. An SME-driven approach to adopting measures of flood
resilience: a UK-based perspective. In The Sociotechnical Constitution of Resilience (pp.
245-264). Palgrave Macmillan, Singapore.
Kuratko, D.F., 2016. Corporate entrepreneurship: a research journey. In The Routledge
Companion to the Makers of Modern Entrepreneurship (pp. 166-178). Routledge.
Landstrom, H and et.al.,2016. Challenging entrepreneurship research. Routledge.
Stankovska, I., Josimovski, S. and Edwards, C., 2016. Digital channels diminish SME barriers:
the case of the UK. Economic research-Ekonomska istraživanja. 29(1). pp.217-232.
Wang, H. and Liu, Y. eds., 2016. Entrepreneurship and talent management from a global
perspective: Global returnees. Edward Elgar Publishing.
Wellalage, N.H., Locke, S. and Samujh, H., 2018. Corruption, gender and credit constraints:
evidence from South Asian SMEs. Journal of Business Ethics, pp.1-14.
12 | P a g e