Entrepreneurship and Small Business Management: A Comprehensive Analysis

This report delves into the multifaceted world of entrepreneurship and small business management, exploring the diverse range of venture types, their impact on the economy, and the key aspects of an entrepreneurial mindset. It examines the role of small businesses in the UK economy, analyzing their contribution to industrial growth, employment, and social development. The report also investigates the characteristics of successful entrepreneurs, highlighting the influence of personal background and experience on their decision-making and business outcomes. Through a critical analysis of relevant data and statistics, this report provides a comprehensive understanding of the dynamics of entrepreneurship and its significance in the modern business landscape.

Entrepreneurship and small business management
1 | P a g e

Contents
Introduction................................................................................................................................4
LO1 Explore and illustrate the range of venture types that might be considered
entrepreneurial............................................................................................................................5
P1 Examine different types of entrepreneurial ventures and explain how they relate to the
typology of entrepreneurship.................................................................................................5
P2 Explore the similarities and differences between entrepreneurial ventures......................6
M1 Investigate a diverse range of entrepreneurial ventures to demonstrate an
understanding of entrepreneurship in both public and corporate sector................................7
D1: Critically examine the scope, development and growth of entrepreneurial ventures.....8
LO2 Assess the impact of small business on the economy........................................................9
P3 Interpret and assess relevant data and statistics to illustrate how micro and small
business impact on the economy............................................................................................9
P4 Explain the importance the importance that small businesses and business start-ups
have on the growth of social economy.................................................................................11
M2: Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics.....................................................................................12
D2: Critically examine how small businesses have an impact on different levels of the
economy (local, regional and national) and an international context..................................13
LO3 Determine and assess the key aspects of an entrepreneurial mind-set............................14
P5). Determine the characteristic traits and skills of successful entrepreneurs that
differentiate them from other business managers................................................................14
P6). Assess how aspects of the entrepreneurial aspects personality reflect entrepreneurial
motivation and mindset........................................................................................................16
M3: Explore and examine different lines of argument relating to entrepreneurial
characteristics.......................................................................................................................17
D3). Analyze the characteristic traits, skills and motivational drivers of successful
entrepreneurs, supported by specific examples....................................................................18
LO4 Apply Human Resource Management practices in a work-related context.....................19
2 | P a g e

P7 Examine, using relevant examples, how background and experience can hinder or foster
entrepreneurship...................................................................................................................19
M4: Analyse the link between entrepreneurial characteristics and the influence of personal
background and experience to specific successful entrepreneurs........................................21
D4: Critically evaluate how background and experience influence entrepreneurs, both
positively and negatively, by comparing and contrasting examples....................................22
Conclusion................................................................................................................................23
References................................................................................................................................24
3 | P a g e

Introduction
The business management can be defined as the study of various businesses that are operating
in the industry in order to sustain and earn long-term profits. In the context of management,
there are small as well as large businesses that are currently operating in the industry of UK.
It has been identified that the contribution of small businesses in the UK industry is essential
and of utmost significance. The aim of this management report is to critically define and
analyse the value that is being added by various companies in the business environment
keeping in mind the industry of UK. The emphasis of this assignment would be implied on
the various styles of entrepreneurship and what is the impact of the same in the development
of the companies. Apart from this, the report is also inclusive of the various statistics and
relevant data such that the reader might get essential insights on the start-ups and the role that
is being played by them in the growth of the social economy.
4 | P a g e

LO1 Explore and illustrate the range of venture types that might be
considered entrepreneurial.
P1 Examine different types of entrepreneurial ventures and explain how they relate to
the typology of entrepreneurship.
It has been identified that in the economy of UK there are various kinds of business which
have been set up by the entrepreneurs keeping in mind their objectives and expectations from
the business. It should be noted that these expectations of the business managers can be
effectively identified as the typology of entrepreneurship. The small businesses that are
currently operating in the industry of UK made up to around 99% of the total firms which
explains that the contribution of such forms in the development of the economy is significant
(Kuratko, 2015). On the basis of typology, the businesses can be bifurcated as follows:
 Lifestyle firms: These are the companies that are operating at small levels and
provide a huge amount of independence to the owners. These companies generally
operate out of the household and hence it also provides flexibility. These companies
make it possible for the owners to align their hobbies such that organisational goals
can be achieved. In this kind of company, the typology that is seen is the quasi-
entrepreneur in which the individuals lack the development vision and mission in the
long term.
 Smaller profit forms: Smaller profit forms are the companies that have o vision of
growing large and the main aim of the business is to provide the owner with a decent
amount of lifestyle and generate profits such that the operations expenses of the
company are met. The typology of owners that is seen is such businesses are the
craftsmen and opportunists that have the potential to be creative and harness the
opportunities such that long-term sustainability of the business can be ensured
(Kuratko, 2015).
 High growth ventures: high growth ventures can be defined as the companies that
have the vision and mission of earning huge profits and they also aim at the long-term
sustainability of the company. The kind of typology that is seen in such firms is the
Inventors. Inventors are the entrepreneurs that have a long vision of achievement of
the goals of the company and they are also bent on building new things such that the
5 | P a g e

market can be disrupted with creativity. Examples of companies that have owners
with such typology are Apple, Pizza Hut, Tesla etc. (Parker, 2018).
P2 Explore the similarities and differences between entrepreneurial ventures.
The differences and similarities between the businesses that are operating in the industry of
UK have been stated below as follows:
Similarities Differences
Lifestyle firms Lifestyle forms are the
companies that are similar
to smaller profit firms in a
large context as in both the
companies there is a small
amount of liability with the
owner and also the amount
of independence is high.
This company is different in
various senses such as long-
term growth and vision
lacks here. Apart from this,
in such companies, the
profits made are small.
Smaller profit firms These companies can be
stated as the amalgamation
of both the companies. It
should be noted that such
companies lack long-term
growth while on the other
hand, in such companies
there is harnessing of
opportunities which is
similar to a high growth
venture.
The major difference in the
small company with a
lifestyle firm and a high
growth venture is that the
organisational structure is
small and also the small
company cannot deal in
public exchanges like a
high-profit venture (Werven
et. al., 2015).
High Growth Ventures It has been identified that
the high growth venture is
majorly different from a
small company and the only
similarity between these
companies is that; a high
growth venture can be
privately owned. A high
growth venture and a small
venture can both create
disruption in the industry
but they a small company
just lacks in the scope of
operations.
The major difference
between a high growth
ventures is that such
companies have a long-term
vision and mission and
these companies also have a
large organisational
structure and they also
enjoy a huge amount of
profits (Rawhouser et. al.,
2017).
6 | P a g e

M1 Investigate a diverse range of entrepreneurial ventures to demonstrate an
understanding of entrepreneurship in both public and corporate sector.
It should be noted that in the public sector company and in a corporate sector company the
major difference is of the ownership and the dealing of the company in exchanges. In a public
company, the dealings are done in public stock exchanges. The public company can also be a
government undertaking which is fully or partially owned by the government. The public
company has the major goal of providing accessible and inexpensive services to the citizens
for their welfare while on the other hand, a private company major focuses on their own
development and expansion in the industry. It should be noted that though the contribution of
public entities is large on the individual levels, the economy of UK is filled with the private
entities and 76% of the total contribution in the GDP of the country comes from private
ownership. It should also be noted that in the respect of a number of businesses that are
operating in the industry of UK, the small businesses thrive the most and out of all the
companies, small companies made up around 99% of total entities (Kuratko, 2016).
7 | P a g e

D1: Critically examine the scope, development and growth of entrepreneurial ventures.
The development and growth of entrepreneurial ventures in the business environment of UK
are not only promising for the entrepreneurs but also for the economy. With more and more
businesses opening in the industry, the GDP of the country is boosting on a rapid pace and it
should be noted that in this concern the development of the living standards of individuals,
eradication of unemployment and rise in the social standards of the country is also taking
place in an effective manner. This can be effectively identified form the fact that more than
80% of the individuals that are working in the country are hired by small businesses. This has
resulted in boosting the economy of UK to about 2 Trillion Euros in the year 2017 (Kuratko,
2016).
8 | P a g e

LO2 Assess the impact of small business on the economy.
P3 Interpret and assess relevant data and statistics to illustrate how micro and small
business impact on the economy.
It has already been identified in the later segments of the export that the small businesses are
significant contributors in the economy of UK and it has also been identified that this is a
trend which is liked by many. The continuous growth of this trend is further enhanced by the
innovation and lucrative opportunities that are being offered by the market of UK. The
impact of small businesses in the UK can thus be evaluated under three heads i.e. industrial
turnover, employment and growth rate of industry which has been provided below as follows:
 Industrial growth: The industry of UK is efficient as identified through various
surveys and researches. It has been identified that not only this industry provides the
user with festive and efficient opportunities to harness the true potential of the market
but also help them to grow and prosper in the global arena.
 Turnover: The turnover of the industry of UK is attractive and the contribution of
small companies in the GDP of the country alone in the year 2017 stood around 2
Trillion Euros.
 Employment: Employment opportunities are the major advantage that is received
from the small companies in the business environment of UK as these companies
offer employment to around 85% of the working class individuals in UK. Apart from
hiring, it has been identified that around 40% of individuals have their own small
businesses (Storey, 2016).
9 | P a g e

Image 2: Average profits made by SMEs in UK by sector (in 1000 GBP)
Image source: Statistita.com (2018)
10 | P a g e

P4 Explain the importance the importance that small businesses and business start-ups
have on the growth of social economy
As various employment\ opportunities are provided by the businesses operating in the
industry of UK it should be noted that these companies not only help in improving the
financial status of the citizens but this also adds to increment in the appeal of their social
statuses. It has also been analysed that with the creation of job opportunities that
unemployment is being eradicated from the economy which helps in increment of the GDP of
country (Burns, 2016). The measures to analyse the growth of economy in social terms have
been stated below as follows:
 Education of youth: It should be noted that with the trend of start-up businesses
hitting the economy of UK, many youths in the industry are getting inclined towards
the same which not only exposes them to opportunities in the market but also helps
them to explore the industry on a global basis.
 Improves standards of living: With the downfall in unemployment and development
of the economy, it has been identified that now more and more people are earning
handsome amount which helps them to increase their standards of livings and lead a
good quality of lifestyle. This is one of the greatest and most positive social impact of
small businesses that are being levied on the economy.
 Development of infrastructure: As it has been realised that the development of
small businesses leads to development of the industry which further helps in
increasing the GDP of the country, this enhanced GDP is being effectively used in
order to undertake infrastructural development opportunities in the country. This help
in increasing the appeal of the country (Burns, 2016).
11 | P a g e

M2: Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics.
In order to analyse the impact of small, medium and large businesses in the economy of UK it
should be noted that these businesses irrespective of their size have their own significant
contribution in the economy of the country. The small, medium and large bifurcations of
these businesses have been done in accordance with the scope of operations and size of the
businesses. The impact of such companies on the economy of UK has been stated below as
follows:
 Contribution of small businesses is the most significant one as they comprise of
around 99% of the total businesses thriving in the industry.
 On the other hand, the medium-sized companies are the major contributor to the
economy and their contribution is seen taking into consideration the number of
employment opportunities provided by them.
 The large businesses have a direct impact on the infrastructural development in the
country and it has been analysed that these businesses are the major source of
facilitating technological developments in the country (Hillary, 2017).
Image 3: Small enterprises in EU and their contribution
Image source: Ec.europa.eu. (2018)
12 | P a g e

D2: Critically examine how small businesses have an impact on different levels of the
economy (local, regional and national) and an international context.
 It should be noted that in case of regional and local economy the impact of small
business is major seen on the social levels. With the enormous amount of employment
opportunities being provided by small businesses it has been identified that the
development in standards of living of people is the major positive impact of small
companies on local and regional levels
 In case of national levels, the development is generally seen in the improvement of
technology and infrastructure of the country which further enhances the appeal of the
country.
 In the international levels, the impact of small companies is varied. The first and the
most important impact is the creating a healthy competition in the business arena.
Apart from this, it also leads to a strengthening of the trade and financial relations
with other countries which effectively help the industry of UK to get access to new
and latest technologies (Crane & Matten, 2016).
13 | P a g e

LO3 Determine and assess the key aspects of an entrepreneurial mind-set.
P5). Determine the characteristic traits and skills of successful entrepreneurs that
differentiate them from other business managers.
An entrepreneur is an individual who comes up with an innovative or creative idea for the
establishing new and unique business in the market. These ideas require innovative and
creative thinking, artistic skills, etc. so that a successful business can be introduced. There are
some similarities between the manager and the entrepreneur like based on the ideas of the
entrepreneur new business is introduced whereas such business is managed and controlled by
the managers (Antoncic et. al., 2015).
There are various similarities between the traits and skills of entrepreneur and manager,
however, there are some differences between them which are as follows:
Self Confidence: This is the basic and most essential trait required by the entrepreneur to be
successful. Self-confidence is required for taking over the opportunities and facing the risk so
that resources are utilised properly. It is also important for the entrepreneur to represent
himself as a confident individual. This can also be used to motivate and encourage the
employees for working efficiently. This can be understood with the help of an example as
while presenting the idea in front of investors, it is essential that the entrepreneur possess
confidence as this will attract the investors to invest on the idea.
Passion and Action Orientation: It is well known that for achieving a goal passion and
consistency is essential and for establishing the business based on an idea requires a lot of
passion and consistency. This also provides the skills to deal with any uncertain issues that
may come during the set-up of new business. The management makes strategies discussing it
with the entrepreneur as such individual have better knowledge about the idea on which the
new venture is based (Antoncic et. al., 2015).
These strategies and goals of the organisation are communicated with the staff of the
organisation so that the workforce remain focused on achieving the goals and this will
increase their skills and productivity.
Motivation: It is essential that such individual is motivated and encouraged by the goals and
objectives that are to be achieved. Moreover, it is required to motivate the employees so that
14 | P a g e

their productivity can be improved and the resources are utilised properly. This will reduce
the wastage of finance and will help the company to reduce the cost of productions.
Risk Taker: This is a significant quality required by the entrepreneur to be successful. This
means that such individual must have knowledge about the market conditions and must know
how to calculate or determine risk. Taking risks doesn’t mean taking unnecessary risk, this
means taking the calculated risk so that strategies and plans for reducing the impact of such
risk (Baum et. al., 2014).
15 | P a g e

P6). Assess how aspects of the entrepreneurial aspects personality reflect
entrepreneurial motivation and mindset.
The motivation and mindset of the entrepreneur are affected by the mindset of the
entrepreneur. Both motivation and mindset is required for achieving the individual as well as
organisational goals. The mindset of the person is essential as the strategies and tactics are
made accordingly otherwise the not goals and objectives can be achieved. Motivation is
essential for the keeping the employees as well as the management on target. There are
various techniques which are used by to keep the employees and the staff encouraged (Zhao,
2016).
Entrepreneurial Motivation: It is essential for the accomplishment of the objective to assist
the employees and help them remain motivated. The level of encouragement creates an
impact on the performance of the employees. If the employees are not encouraged, their
productivity and skills will be reduced and they will fail to achieve the organisational and
individual goals. Techniques like a reward system, recognition, etc. are used to keep the
employees motivated.
Entrepreneurial Mindset: It is necessary that the mind of the entrepreneur remains on the
target so that it may not waste the funds and resources as well as have an impact on the
performance of the organisation and the personnel related to it. While making the strategies
for the performance of the operations and reaching goals, the mindset of the entrepreneur is
essential as they provide an overview of the aims of their idea. Moreover, they must have a
steady mindset, their knowledge and awareness of the business and market conditions are
required to deal with the issues that may come in way of the working of the company (Zhao,
2016).
16 | P a g e

M3: Explore and examine different lines of argument relating to entrepreneurial
characteristics.
Entrepreneur holds a vital place in the establishment of new ventures or business as it is the
idea of such individual on which such business is based. However, there are various
arguments relating to the characteristics of the entrepreneur which are as follows:
 Their main focus is on the products and the services which are to be provided by the
business to the customer and the development of the business. They don’t focus on
the enhancement of the skills of the workforce.
 They are more engaged to generate more profits and revenues which are made
possible by the efficient working of the workforce.
 The employees are motivated by the managers, however, sometime entrepreneur also
motivates the employee so that they can make optimum utilisation of the resources
and this may reduce the cost of productions (Davidsson, 2015).
17 | P a g e

D3). Analyze the characteristic traits, skills and motivational drivers of successful
entrepreneurs, supported by specific examples
The main and most essential traits and quality required by the entrepreneur is innovative and
creative mind. It is the innovative and unique idea of the entrepreneur which introduces new
products and services in the market by setting up a business.
For improving and enhancing the working or the performance of the employees, they are
provided rewards and incentives which motivates and encourage them to work efficiently.
Moreover, the new ideas of the employees are also invited by the entrepreneur so that it can
be considered while coming up with a new line of product.
These individuals have expert knowledge about the scenario of the market and they develop a
plan with the management to deals with any issues that the business may face in the future
times (Cardon & Kirk, 2015).
18 | P a g e

LO4 Apply Human Resource Management practices in a work-related
context
P7 Examine, using relevant examples, how background and experience can hinder or
foster entrepreneurship.
The personal and past experiences of an individual play an important role in determining their
attitude and their perspective in dealing with different situations that may arise. It should be
noted that the major impacts of the past experiences of the individual also have a significant
role in the entrepreneurship which has been analysed below as follows:
 Educational levels: the educational levels of the entrepreneurs directly impact the
attitude of the entrepreneur towards their businesses. if the entrepreneur has a good
expertise in their area of skill they tend to make a good businessman and analyse the
opportunities in an effective manner.
 Culture of the nation: It should also be noted that the industrial culture and trends to
play a major role in impacting the entrepreneurial characteristics of an individual. It
should be noted that in the social and the national culture of UK there is a trend
growth of start-up businesses which have inclined the interests of entrepreneurs
towards such practices of business. This has also helped in inclusion of an innovation
in the industry (Dunne, 2017).
 The economic circumstances of the country and of the individual also play a major
role in the development of entrepreneurial characteristics. This is evident from the
fact that of the person has a good financial background, they are less likely to face
hurdles in an economic manner and the business will also not face any financial
implications. This is the case in the context of the industry too. If the industry in
which business is being operated is financially sound, the business tends to grow at a
rapid pace. For example Tesla.
 Characteristics of the individual: It has been said that one is not made entrepreneur
but born like one. As far as the statement is true it should be noted that the major
entrepreneurs in the industry of UK took no lessons from institutes but on the other
hand they have learnt from their experiences. If the person have traits of a leader, their
chances of being successful increases rapidly while on the other hand, if they do not
19 | P a g e

possess such characteristics, the chances of success are likely to get low. For example
development of Facebook by Mark Zuckerberg (Byrne et. al., 2016).
20 | P a g e

M4: Analyse the link between entrepreneurial characteristics and the influence of
personal background and experience to specific successful entrepreneurs
The link between the characteristics of the entrepreneur and the impact of their personal
background in the same is a critical element to consider as the success and failure of the
business is directly dependent on this constraint. It has been analysed that in order for a
business to be successful it is required by the owner of the company to take an essential
decision in order to develop the business and harness the potential opportunities. In such
cases, the decision making of an individual is directly affected by the past experiences. It
should be noted that the empirical knowledge that an individual possesses is directly
dependent on the past experiences and the knowledge that the individual has gained in the
industry. Apart from the experience in the industry, the personal background also plays an
important role in determining the attitude of the individual towards the business. If the
individual has faced many atrocities in personal life their attitude towards lie becomes
negative which is also reflected in their decisions. This may hamper the development of the
company in the industry. The development and failure of business in the industry can be seen
by taking the example of Tesla. The company that produces electric cars at first was unable to
analyse and harness the opportunities and was beaten in competition by major manufacturers
like Toyota. But after penetrating the market with effective opportunities for growth the
company is not leading manufacturer in electronic motors segment (Fayolle & Gail5y, 2015).
21 | P a g e

D4: Critically evaluate how background and experience influence entrepreneurs, both
positively and negatively, by comparing and contrasting examples.
The background as analysed in the former segments of the report plays a major role in
determining the success of the business. Effective and efficient decisions not only lead to the
success of the business but also help in enhancing the entrepreneurial characteristics. In order
to analyse the impact of positive and negative decision making the example of Facebook can
be taken. At first, while the app was still in the experimental phase it was rejected by major
IT companies and according to them, the app would not be successful. This could have been a
negative experience for Mark but instead he took this as a positive motivation he developed
the app himself and launched it with help of its friends on a worldwide platform. The result as
clear it is; Facebook is now the leading social media website which is earning profits in
Trillions on an annual level (Fayolle & Gail5y, 2015).
22 | P a g e

Conclusion
The management report provided above thus concludes that in the impact of small businesses
in the economy of a country is significant., the report has been prepared to keep in mind the
industry of UK and it has been analysed that the positive impacts of development are not only
seen on economic levels but also on the social levels. The development of the businesses is
directly dependent upon the mindset and the attitude of the entrepreneur which makes it
essential to keep a close check on the entrepreneurship fostering. The decisions that are made
by the owner of the company determine the success of the business and it has also been found
that these decisions of the entrepreneurs are directly impacted by the past experiences.
23 | P a g e

References
 Antoncic, B., Bratkovic Kregar, T., Singh, G. and DeNoble, A.F., 2015. The big five
personality–entrepreneurship relationship: Evidence from Slovenia. Journal of Small
Business Management, 53(3), pp.819-841.
 Baum, J.R., Frese, M. and Baron, R.A., 2014. Born to be an entrepreneur? Revisiting
the personality approach to entrepreneurship. In The psychology of
entrepreneurship (pp. 73-98). Psychology Press.
 Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
 Byrne, J., Delmar, F., Fayolle, A. and Lamine, W., 2016. Training corporate
entrepreneurs: an action learning approach. Small Business Economics, 47(2), pp.479-
506.
 Cardon, M.S. and Kirk, C.P., 2015. Entrepreneurial passion as mediator of the self‐
efficacy to persistence relationship. Entrepreneurship Theory and Practice, 39(5),
pp.1027-1050.
 Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
 Davidsson, P., 2015. Entrepreneurial opportunities and the entrepreneurship nexus: A
re-conceptualization. Journal of Business Venturing, 30(5), pp.674-695.
 Dunne, C., 2017. Can Intercultural Experiences Foster Creativity? The Relevance,
Theory and Evidence. Journal of Intercultural Studies, 38(2), pp.189-212.
 Ec.europa.eu. 2018. File:Number of enterprises, persons employed and gross value
added (GVA) and the share of SMEs, 2012.png - Statistics Explained. [online]
Available at:
http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Number_of_enterpris
es,_persons_employed_and_gross_value_added_(GVA)_and_the_share_of_SMEs,_2
012.png [Accessed 25 Mar. 2018].
 Fayolle, A. and Gailly, B., 2015. The impact of entrepreneurship education on
entrepreneurial attitudes and intention: Hysteresis and persistence. Journal of Small
Business Management, 53(1), pp.75-93.
 Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment:
business imperatives. Routledge.
24 | P a g e

 Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage
Learning.
 Kuratko, D.F., Morris, M.H. and Schindehutte, M., 2015. Understanding the
dynamics of entrepreneurship through framework approaches. Small Business
Economics, 45(1), pp.1-13.
 Parker, S.C., 2018. The economics of entrepreneurship. Cambridge University Press.
 Rawhouser, H., Cummings, M. and Newbert, S.L., 2017. Social impact measurement:
Current approaches and future directions for social entrepreneurship
research. Entrepreneurship Theory and Practice, p.1042258717727718.
 Statistita.com. 2018. Average profit of SMEs by sector 2014-2017 | UK Survey.
[online] Statista. Available at: https://www.statista.com/statistics/291409/small-and-
medium-enterprises-sme-median-average-profit-in-the-uk-by-sector/ [Accessed 25
Mar. 2018].
 Storey, D.J., 2016. Understanding the small business sector. Routledge.
 van Werven, R., Bouwmeester, O. and Cornelissen, J.P., 2015. The power of
arguments: How entrepreneurs convince stakeholders of the legitimate distinctiveness
of their ventures. Journal of Business Venturing, 30(4), pp.616-631.
 Zhao, Y., 2016. ENTREPRENEURIAL MINDSET. Education for Sustainable
Happiness and Well-Being, p.66.
25 | P a g e