The Role of Small Businesses and Entrepreneurship in Economy

This assignment delves into the significance of small businesses and entrepreneurship in today's economy. It examines how these entities contribute to job creation, economic growth, and innovation, as well as their role in urban development and technological advancement. The assignment also touches upon the concept of entrepreneurship as experimentation, highlighting its importance in driving business success. With a focus on the UK market, it discusses the impact of small businesses on the country's economy and the benefits they bring to local communities.

ENTREPRENEURSHIP

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different types of entrepreneurial ventures and relate to the typology of entrepreneurship. 1
P2 Similarities and differences between entrepreneurial ventures.........................................3
TASK 2............................................................................................................................................5
P3 Interpret relevant data and statistics and micro and small businesses impact on economy5
P4 Important small businesses and business start –ups will contribute to the growth of social
economy.................................................................................................................................8
TASK 3............................................................................................................................................9
P5 Characteristics, traits and skills of successful entrepreneurs............................................9
P6 Entrepreneurial personality reflect entrepreneurial motivation and mind-set.................11
TASK 4..........................................................................................................................................12
P7 Background and experience can hinder or foster entrepreneurship................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
An entrepreneurship refers to capacity and willingness to an individual to create, organize
and also manage business venture. An entrepreneurship is combined with natural resources, land,
capital and labor which can produce the profit. An entrepreneur is a person that undertakes
creation, firm, risk and ownership of business. A business person address social and personal
advantages of entrepreneurship. An entrepreneur plays an essential role in increasing an
economy of country by expanding business at global market (Autio, 2013). This report, will
discuss about various kinds of entrepreneurial ventures as they are related to typologies of
entrepreneurship. Contribution of start- ups and small businesses to growth and development of
social economy will be mentioned in given report. There will be discussion about skills,
characteristics and traits of successful entrepreneurs which are different from other business
managers.
TASK 1
P1 Different types of entrepreneurial ventures and relate to the typology of entrepreneurship
An entrepreneurship is a procedure of developing something new with value through
devoting required effort and time, assuming accompanying the physic, social, financial risks and
also receiving rewards of personal and monetary satisfaction. An entrepreneur is a person who
develops business model and acquires required human capital and physical to start new venture.
With the help of entrepreneurship, social and economic value of nation can be improved in an
effective manner.
Entrepreneurial venture refers to firm that makes innovation on priority in order to
utilizing the market opportunities in a better manner (Baum, Frese and Baron, 2014). It will be
helpful for an entrepreneur to make the social along with economic value through providing
innovative services and products.
Different entrepreneurial ventures are mention below as above:
Small business entrepreneurship: These types of firms conduct their business operations
and activities at small level. These are begin, owned and managed through a person that need to
generate income for the purpose of living in better manner. Under small businesses include
plumber, electrician, grocery store etc.
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Scalable start-up entrepreneurship: It taken innovation and creative ideas for scalable
business model that will turn in high growth. An entrepreneur makes creation and innovation in
business and develop effective ideas in context to earn more profit and business development.
Their main motive is to enhance their market share and enlarge organisation through providing
innovative services and products to people at reasonable cost.
Large entrepreneurship: Under this, firms run their business at large scale. These are
start and owned through an individual that can make better decisions for the purpose of
generating revenue (Brush and Cooper, 2012). It is necessary for large size organisation to have
the sufficient fund and manpower for conducting business operations in significant and effective
manner. They adopt new technologies which help in providing services to consumers in an easy
manner. Large companies expand their business in various places to attract more consumers by
proving them product on the basis of their demands and needs.
Lifestyle entrepreneurial venture: These ventures are run business for the purpose of
make money for maintain their living standards in better manner. These are establish through a
person for complete their passion along with conduct their business activities economically.
Survival entrepreneurial venture: It conduct its business to retain at marker place and
enhance its market share. The main goals of this venture is to survive and also met with financial
obligation of venture. With the help of using latest technology in business, it reduce its products
costs and enhance quality of products.
Typology of entrepreneurship: Entrepreneurial ventures are related with the typologies which are
mention below: Serial entrepreneur: This kind of entrepreneur think of innovative business ideas on a
continuous basis in order to incorporate the new business organisation. Serial
entrepreneurs start their venture and after earn profit they sell to other person. They
continuously come with new ideas and begin new businesses. Female entrepreneur: It refers to process where female organise all production factors,
give employment to others and undertake risks (Bruton, Ketchen Jr and Ireland, 2013).
Their main purpose is to increase the quality of life of women, so that they can take
initiative to run business. For this purpose, they are able to deal with risk and implement
manufacturing activities for generate profit.
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 Social entrepreneur: This entrepreneur set up business in order to overcome problems of
society. Their main focus is to work for welfare of society people. They fulfil needs
community people by providing products on the basis of their needs.
 Male entrepreneur: Those firms which are set up, owned and run through a male known
as male entrepreneur (Butler, 2012). They are always ready to deal with any risks and
able to take better decision in favour of firm.
P2 Similarities and differences between entrepreneurial ventures
Large entrepreneurship, Lifestyle entrepreneurial venture, Scalable start-up
entrepreneurship etc. are different types of entrepreneurial ventures and these all are different
from the each other in context to objectives, functions and many other things. Differences and
similarities among the various entrepreneurial ventures are mention below:
Venture Similarities Difference
Large entrepreneurial venture
and Scalable start- ups
 Both entrepreneurial
ventures make
modifications also with
execute the advanced
technologies in
business in context to
provide the innovative
services and products
to consumers (Cooper
and Folta, 2017).
 Both the
entrepreneurial
ventures offers various
products as well as
services in context to
needs and demands of
people.
 Large size firm has
required resources
which are helpful in
conducting business in
a proper manner.
Organisation can easily
target the large number
of consumers by
promoting business at
large scale.
 Scalable start-ups
venture needs collect or
arrange the required
resources in order
expand business and
generate profit in an
efficient manner.
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Venture Similarities Difference
Male and female
entrepreneur
 Both female and male
entrepreneurs have
better competencies
and abilities to manage
and control business
for earn profit.
 On the other hand,
there is also a
similarity among both
is that they have
demographic and
psychological tactics
which can impact on
functioning of business
(Davidsson, 2015).
 Male entrepreneurs are
more curious towards
earn high profit and
make large investment
to generate more
revenue. Their main
focus is towards
increasing sales and
earn profit.
 While the female
entrepreneurs are more
sensitive and make the
decision in better way.
Venture Similarities Difference
Small and social
entrepreneurial venture
 Both entrepreneurial
ventures execute the
creative and innovation
ideas in their business
in context to make their
products or services
unique. It is helpful for
both to use raw
materials, workforce
and finance in a better
 The main objective of
social entrepreneur is
to create better
environment of society
and produce goods on
the basis of their needs.
It work for well being
of people of society.
 The main objective of
small entrepreneurial
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manner (Decker and et.
al., 2014).
 They both conduct
their business
operations in an
effective manner for
attaining aims and
objectives with in
given period of time.
venture is to develop as
well as maintain its
position at market and
earn more for their
livelihood.
Venture Similarities Difference
Survival and Lifestyle
entrepreneurial venture
 Survival and lifestyle
both entrepreneurial
venture both generate
profit for maintain their
lifestyle, enhance large
market share sustain at
market place for long
period of time.
 The main aim of
Survival venture is to
enhance its sales and
retain at in competitive
market for long time.
 Lifestyle venture run
their business for
maintain their lifestyle
better (Flamholtz and
Randle, 2012).
TASK 2
P3 Interpret relevant data and statistics and micro and small businesses impact on economy
In United Kingdom, small firms plays a necessary role in development of an economy. In
this country, around 99.3% of private sector businesses at start of year 2016 and 99.9% were
micro and small size. Micro, small and medium are three different kind of firms which aids
government to make economic conditions of UK better. These three are different from each other
in context to size, manpower, resources etc.
Micro business- This business start its business operations at very small level with one
owner. Under this, less than five employees working including owner.
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Small business- An individual conduct and rune business alone with the more of earn
profit for livelihood. Not more than 50 employees are working.
Medium business- Revenue of this business is less than large scale and more than small
scale. In medium business, less than 250 employee works.
Enterprises Staff members Turnover
Small Less than 50 Not more than 10 million
pound
Micro Not more than 10 Less than 2 million pound
Medium Less than 250 Not more than 43 million
pound
Impact of Small and micro enterprises on economy of UK:
Local Impact: In United Kingdom, there are many areas which have micro and small
business firm more. These are helpful in develop economic conditions and increase living
standard of people by generating employment (Glaeser, Kerr and Kerr, 2015). These kinds of
firms aids people to get various kinds of services or products for satisfying needs of people.
Illustration 1: Local impact
(Source: Local impact, 2016)
Interpretation: From the above mention data, it has been concluded that small business firms
enhance rate of employment in United Kingdom. From year 2009 to 2015, there is increment of
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job opportunities from 3,000,000 to 6,000,000. It is helpful in provide contribution to economy
of country.
National Impact: Micro and small business firms are large in number in United
Kingdom which develop positive impact on business. The United Kingdom government is able
to enhance its GDP rate by increases employment for people. With the help of this, people can
earn money and also can improve their living standard in a better manner.
(Source: The Role of Small Businesses in Today’s Economy, 2018)
Interpretation: From the above mention graph, it has been stated that small firms positively
contribute towards innovation. The small firms provide 48% employment rate where as medium
provides12% and large gives 40% job opportunities. In SMEs total employment was 15.7
million. In addition to this, among 25-27 million of small business in UK which provides job to
unemployed people.
Regional impact: Small and Micro both firms develop more affect at regional level.
These firms need to retain in competitive market and also maintain their better position at market
place. Under this, entrepreneurs produces goods and services on the basis of demands and
preferences of consumers (Kerr, Nanda and Rhodes-Kropf, 2014). In order to attract more
customers, they provides their products to them at reasonable cost.
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Illustration 2: Impact of SME's on economy of UK

P4 Important small businesses and business start –ups will contribute to the growth of social
economy
Brexit refers to a condition in which United Kingdom country was withdrawn from
European Union and also became independent nation. In referendum on 23 June, 2016, there was
majority of the British Voters which supported leaving European Union. After completion of
negation related activity, United Kingdom decide to separate from European Union. UK is due to
leave European Union on 29 March 2019 when period of negotiating withdrawal agreement will
be end unless agreed extension.
Threats of Brexit on United Kingdom: From Brexit, economic development as well as
trade of United Kingdom was impacted badly (Moroz and Hindle, 2012). It develops negative
impact on country and its exports is goes down. On the other hand, confidence of European
Union also goes down because it affects on situation of the developing nation badly. It is mainly
affect on job opportunities of people.
Difference among small and start- ups:
Basis Small Start- ups
Meaning Small firm is star, run and
managed through a person in
regards to earn profit for the
purpose of maintain their
living standard. It provides
services and products on the
basis of needs as well as
demands of consumers.
An entrepreneur set new
business firm by executing the
innovative ideas on the basis of
market situations.
Way of finance Small firms get money from
the internal sources for an
instance friends, relatives,
family etc. By taking fund
from these sources are not
risky. In small business
chances of risk involved is
In order to start a new
business, entrepreneur need to
arrange money from external
sources such as venture
capitalists, creditors, investors
etc. It will help an entrepreneur
to start or conduct business in
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less. significant manner. It can
make its consumer base strong
from beginning and also earn
profit.
Growth rate The growth rate of small firms
is low because of large number
of strong competitors at
market place. It can increase
its brand value at market place.
As comparison to small
business, growth rate of start-
up is high. Start up begin
business with new and
innovative ideas which help in
enhance chance of increase
sales and earn profit.
The small and start- ups both businesses can affect contribute towards economy growth of
country. Impact of start- ups and small mention below:
Generate employment- Start- ups and small both businesses both are helpful in generate
the better employment opportunities for local people (Morris and et. al., 2013). In United
Kingdom, there are many small firm which provide job opportunities for local people so that
they can earn more and maintain their living standard in a better manner.
Reduce poverty- In United Kingdom, Small and start-ups both are more in number
which assess to enhance the employment opportunities for local people. With the help of this,
people will earn more and they can live better. It will be helpful in reduce their poverty and they
can purchase products or services according to their needs. If poverty from UK will be reduced
then it will be helpful in economic development.
Wealth distribution- Start-ups and small firm both help government of United Kingdom
to provide money equally. Both firms help the local people to earn money through running new
business or working in an organisation. In addition to this, wealth of the nation will be
distributed in proper manner and people will have money for making their living standard better.
TASK 3
P5 Characteristics, traits and skills of successful entrepreneurs
An entrepreneurship refers to concept of managing as well as developing business
venture in context to gain profit through taking many risks in business (Nambisan and Baron,
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2013). An Entrepreneur is an individual that begin new venture for new venture for executing
creative as well as innovative ideas to earn profit. Person have better skills and core
competencies for perform business activities and operations. It is essential that an entrepreneur
have attributes for coordinate and guide the employees at workplace in a positive manner. Bill
gates and Jeff Bezos both are entrepreneurs and thier traits or skills are mention below:
Innovator- It is an necessary that an entrepreneur should have capability to think
innovative ideas in order to make thier business unique. In order to amke changes in products
and srevices, they make innovation in its business as well as products. Bill gates and Jeff Bezos
both motivate thier employees for think innovative ideas.
Passionate- It is necessary that an entrepreneur should be passionate towards their work
and attaining aims of company with in given period of time. Passionate leads to attaining the
objectives and goals in an effective manner. Jeff Bezos and Bill Gates are two entrepreneurs and
they both follow their passion (Priem, Li and Carr, 2012). It is helpful in give them strengths to
deal with all challenges and act like a motivational factor.
Hard working and dedicated: It is an important attribute that aids an entrepreneur to
conduct business activities and operations in an significant manner. Their main focus is to
achieve goals with in set period of time. Jeff Bezos and Bill Gates both are hard working and
they are curious towards their work. They both do innovation in their business for making their
services more attractive or better.
Skills of an entrepreneur
Decision making- It is necessary that an entrepreneur should have skill to to take better
decisions. Jeff Bezos and Bill Gates are good in making decision in favour of firm and
employees.
Communication- This skill is helpful in interacting with people in a significant manner.
Bill Gates and Jeff Bezos both communicate with their stakeholders in positive manner. It helps
in enhance their motivation.
These are all traits of an entrepreneur that aids to conduct business in a successful
manner. Difference among an entrepreneur and business manager:
Basis Entrepreneur Business manager
Definition An entrepreneur is an
individual that have innovative
Business manager is a person
individual who drives work of
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and creative ideas to set up or
start a new business. There are
different factors such as land,
capital and labour used
through them to earn income
for maintain their living
standard.
the other in context to run
business in an effective
manner to make large profit.
Business manager guide and
motivate staff members to
work in proper direction by
following all rules and
regulations in a significant
manner. Beside from this,
business manager monitor and
control activities which bare
performed through
subordinates.
Status Entrepreneur is owner of
company that incorporate
business venture for earn
profit. This person can make
their own decisions (Sánchez,
2013).
Top management provided
authority to Business manager
for manage work and team.
Managers have no right to take
decisions without permission
of top management.
Risk taking It is necessary for an
Entrepreneur to deal with high
risk in an effective manner.
As comparison to an
entrepreneur, manager bear
less risk and its main aim is to
attain set objectives of firm in
proper time period.
P6 Entrepreneurial personality reflect entrepreneurial motivation and mind-set
An entrepreneur is an individual which have capability and abilities to think innovative
ideas and implement them in business to enhance performance. The motivation and mind set of a
person is based on entrepreneurial personality that impact on decision making in business. If an
entrepreneur will be motivated then it will direct the team as well as coordinate all staff members
in a significant manner. Bill gates and Jeff Bezos are two successful entrepreneurs which
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conduct their business in proper manner by providing attractive services. They both are able to
increase their entrepreneurial personalities from their learning as well as experience. It reflect
their mindset and motivation. Five personality traits of OCEAN are mention below:
Openness to experience- Individuals which like to learn the new things as well as enjoy
new experiences are high in openness. Its main features are insight, imagination, curiosity
towards work, emotion etc. Jeff Bezos and Bill gates both entrepreneurs like to enjoy the new
experience and learn new things. They both are creative, adventurous and tackle the new
challenges.
Conscientiousness-The people with high conscientiousness degree are prompt as well as
reliable. High conscientious is related to focused and stubborn whereas low conscientious is
concerned with spontaneity and flexibility (Williams and Shaw, 2013). Jeff Bezos and Bill Gates
both entrepreneurs are more focused towards their work and it helps in motivate their
entrepreneurial personality.
Extraversion- It is characterised through sociability, high emotional expressiveness,
talkativeness etc. People which are high extraversion are tend and outgoing to gain more energy
ion the social conditions. Jeff Bezos and Bill Gates both like to interact with other people and
make better relationship with them. They both are social and keep maintain their better
relationship with their stakeholders.
Agreeableness- Under this, tendency to be cooperative and compassionate as comparison
to antagonistic and suspicious towards the others. Under this, people are compassionate, friendly
in nature and cooperative. The people with high agreeableness are more cooperative and care
about the other people. The high agreeableness is seen as submissive or naïve.
Neuroticism- These are known as emotional stability. It is concerned with emotional
stability of one as well as negative emotions degree. Its traits are characterised through emotional
instability, sadness and moodiness. People with the high neuroticism tend have worse
psychological well being.
TASK 4
P7 Background and experience can hinder or foster entrepreneurship
Entrepreneurship refers to process that start, run and manage new business in hope of
earning profit. This kind of activity aids people to earn more money through deal with risks in
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better manner. Apart from this, an entrepreneur needs to work with its employees so that they
can be motivate. Bill gates and Jeff Bezos are two successful entrepreneurs and they run thier
business in successful manner in all over th world. The experience as well as background both
can hinder and also foster entrepreneurship of an individual.
Education- It is a necessary factor and it states that an individual takes the degree from
college in specific area. People learn many things and get knowledge in particular field. Jeff
Bezos and Bill Gates both are well qualified and have better knowledge in their field. It is helpful
for them to develop better policies, strategies and business plan to conduct business effectively.
Along with this, they both are able to use all resources of company in a significant manner.
utilise resources efficiently. So, education is helpful in foster the entrepreneurship and develop
many opportunities.
Family background- Along with have good knowldeg or better qualification, it is
necessary that background of an individual shopuld be better (Zahra and Nambisan, 2012). If the
family background of a person will not be good and supportive then it will negative affect on
entrepreneurship. On the other hand if family is suopportive and guide individual then it will be
helpful in foster entrepreneurship of that person. Jeff Bezos and Bill Gates both belong to
working family. Their parents was working and they support to both of them for their passion. In
starting of business, they both have limited money as well as resources. So, it is a main hindrance
for an entrepreneur.
Experience- This factor is necessary in hinder and also foster the entrepreneurship of an
individual. If past experiencing of a person will be good then it will be motivated towards work.
Before set up their business, Jeff Bezos and Bill Gates both worked in other firms and their past
experience was better. Through this they motivated and their entrepreneurship was fostered.
CONCLUSION
It has been concluded from the above mention report that entrepreneurs plays an
important role in enhancing an economy of country. Different types of entrepreneurial ventures
and their similarities and differences among them has been studied under this report. In United
Kingdom, there are large number of small and start- up firms which contribute towards provide
employment, reduce poverty etc. Under this report studied about the skills, characteristics and
traits of an entrepreneur which are necessary to run a business in successful manner. Experience
and background can foster and hinder the entrepreneur has been also discussed in this.
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REFERENCES
Books & Journals
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Bruton, G. D., Ketchen Jr, D. J. and Ireland, R. D., 2013. Entrepreneurship as a solution to
poverty. Journal of Business Venturing. 28(6). pp.683-689.
Butler, J. S., 2012. Entrepreneurship and self-help among black Americans: A reconsideration
of race and economics. SUNY Press.
Cooper, A. and Folta, T., 2017. Entrepreneurship and high‐technology clusters. The Blackwell
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Davidsson, P., 2015. Entrepreneurial opportunities and the entrepreneurship nexus: A re-
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Moroz, P. W. and Hindle, K., 2012. Entrepreneurship as a process: Toward harmonizing
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Nambisan, S. and Baron, R. A., 2013. Entrepreneurship in innovation ecosystems:
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Sánchez, J. C., 2013. The impact of an entrepreneurship education program on entrepreneurial
competencies and intention. Journal of Small Business Management. 51(3). pp.447-465.
Williams, A. M. and Shaw, G., 2013. From lifestyle consumption to lifestyle production:
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The Role of Small Businesses in Today’s Economy. 2018. [Online]. Available through:
<https://www.market-inspector.co.uk/blog/2017/05/facts-about-small-medium-
businesses-in-the-uk>.
What is entrepreneurship? 2018. [Online]. Available through:
<https://entrepreneurhandbook.co.uk/entrepreneurship/>.
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