Entrepreneurship And Small Business - Assignment

ENTREPRENEURSHIP
AND SMALL BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO 1.................................................................................................................................................3
P1 Examine different Types of entrepreneurial ventures and their relation to the typology of
entrepreneurship.....................................................................................................................3
P2 Explore the similarity and difference between entrepreneurial ventures..........................4
M1 Investigate Diverse range of entrepreneurial ventures in public and corporate sector.. .6
D1 Critically analyse scope, Development and growth of entrepreneurial ventures.............6
LO 2.................................................................................................................................................7
P3 Interpret and Assess relevant data and statistics illustrating impact of micro and small
businesses on economy...........................................................................................................7
P4 Explain the Importance of small business in social growth of economy..........................8
M2 Evaluate Difference between small, medium and large business....................................9
D2 Critical examination of Impact of small business on levels of economy.........................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Entrepreneurship can be defined as per Schumpeter, as doing those thing which are not
performed in the normal or ordinary routine level. He also termed creative destruction in
context of entrepreneurship describing innovations in manufacturing field. As per Lachman, an
entrepreneur can be defined as a person who uses a unique combination of already existing
production factors in order to manufacture or produce a unique product creating a new market in
the industry. Say was another writer who stated that any agent who unites means of production
and finds value in products. Lavington stated that in modern times, an entrepreneur can adopt
different manners to operate. This report discusses different types on entrepreneurship and the
impact of small-medium entrepreneurs on UK's economy.
MAIN BODY
LO 1
P1 Examine different Types of entrepreneurial ventures and their relation to the typology of
entrepreneurship.
All the entrepreneurial ventures have one basic characteristics i.e. they bring something
innovative. However, there are different types of entrepreneurial ventures which can be classified
on the basis of risk taken by them. There are 4 major types of ventures which are :- Small
business entrepreneurs, Scalable entrepreneurs, Large business entrepreneurs and Social
entrepreneurship.
Small business entrepreneurs are those type of entrepreneurial ventures which are owned and
operated by one person and operate locally (Read and et.al., 2016). Cafes, Service providers,
Stores etc. are a few examples of small business entrepreneurs and their number is increasing
rapidly in UK's economy contributing majorly in their growth.
Scalable entrepreneurs are those ventures which begin at a very lower level but are opened with
a purpose of expansion at the maximum level. Barclay's Bank, Tesco etc. are a few examples of
this type of ventures.
Large business entrepreneurs are those revolutionary ventures whose idea was so innovative
and influential, that they were able to influence entire world with their idea and make their
product prevalent in the entire world. It is very difficult to compete with them as they are the
rulers of their own industry and are highly successful.
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Social entrepreneurial ventures are those types of ventures whose main aim is to provide
assistance to the people who need it in a unique or innovative manner (Dana, 2018). They focus
on expansion so that they can assist as many people as possible rather than keeping profit
maximisation as their aim. NHS can be considered a perfect example of Social entrepreneurial
venture operating in UK. All the types of entrepreneurial ventures are related to the different
typologies of business.
Typologies of entrepreneurial ventures :- Typology is the motive or purpose with which an
entrepreneurial venture is set up. They can be classified on this basis :-
Survival Firms :- These firms operate with a single purpose of keeping heir business open and
running. Instead of focusing on expansion and profits, their major aim is to not get shut down.
Lifestyle Firms:- Here, the entrepreneurs have the aim to generate sufficient revenue which will
help them in fulfilling the basic requirements of the lifestyle they wish to follow. Here, the
entrepreneur tries to avoid the risk by expanding or growing .
Managed Growth Firms :- Under this, the entrepreneurs plan on growing but they do so at a
managed and monitored pace rather than taking extreme measures for growth. This helps them in
achieving a steadier growth (Chell and et.al., 2016).
Aggressive Growth Firms :- Under this, an entrepreneur is entirely focused on expanding and
formulates the required strategies beforehand taking decision at extreme levels. Though they are
taken after much deliberation, there are chances of the business either becoming a failure or
getting successful.
Public Sector Entrepreneurship :- Here, the venture is set up with an am to provide services to
the people and focus is on assisting and helping them rather than keeping profit generation as
their major aim which helps them in improving their economy.
P2 Explore the similarity and difference between entrepreneurial ventures.
There are many differences and similarities between the different types of entrepreneurial
ventures. The similarity is that all of them are created on the basis of a innovative idea and they
plan on succeeding on the basis of this idea. Small scale and social entrepreneurs do not pursue
the objective of profit maximization and and scalable and large scale entrepreneurs work towards
expansion and growth (Burch and et.al., 2016.).
Basis Small Scale Scalable Large Scale Social
Entrepreneurs
Intrapreneu
r
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Structure of
Organisation
There is a lack
of any
definitive
organizational
structure or a
predetermined
format
according to
which a the
firm should
operate.
However, most
of the times
sole
proprietorship
is used as there
is a single
person
operating the
store.
Under this, the
entrepreneursh
ip are
formulated
using complex
structures and
formats but
usually there is
either a public
limited or a
private limited
structure that
they adopt for
their
organisation.
These are those
enterprises
having a large
customer base
and hence they
adopt different
structural
designs suiting
the operations
and activities
of their
company. It is
commonly
done through
private limited
or public
limited.
In this kind
entrepreneurshi
p; instead of
focusing on the
structure,
emphasis is on
reaching out to
maximum
number of
people and for
this they adopt
that structure
which assists
them at
maximum level
like NGOs,
trusts or
charitable
organizations
(Piperopoulos,
2016).
Intrapreneurs
being highly
motivated
individuals
working as
managers in
those
companies
whose
operations are
highly
innovative.
Risk and
Competition
level
Here, risk level
is lower as they
operate in the
form of local
stores but the
competition
that they face is
fierce even
though the
nature of it is
Here, the risk
levels that they
face are
extremely high
as the entire
activities is
based on one
basic idea.
The
competition
Under this, the
risk level lies
form moderate
level to high
level as the risk
is associated
with the failure
or success at
the time of
expansion.
Although the
risk level is
comparatively
lower since
their aim is to
provide
services rather
than to generate
profits, but the
competition
They
personally
don't have
any risk but
they bear the
liability of
making their
business
successful.
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domestic.
There are many
competing
stores
providing same
services and
hence the
competition is
tougher.
levels is also
comparatively
higher at the
initial level as
there are many
competitors
who might
outshine them
but once they
are established
they have no
fear of facing
competition.
Also, the
competition
level is high
during the
entire duration
of existence as
the company
has to regularly
modify its
policies and
practices as per
the
competitor's
actions (Julien,
2018.).
level is high as
there are many
similar
organisation
working with
same objective.
M1 Investigate diverse range of entrepreneurial ventures in public and corporate sector.
There are intrapreneurs, managerial business owner and Schumpeterian entrepreneur.
Intrapreneurs are highly motivated and action oriented persons and managerial business owner
refers to those who operate by managing the people and the work force. Schumpeterian
entrepreneur are those who link innovation and creative destruction and is considered a
cornerstone of capitalism.
The public sector organisations are managed & controlled by government directly or
indirectly. The government makes huge amount of investments on these kinds of organisations,
various private companies also provide strategic help to these types of organisations. These types
of corporations have establishment in various sectors and aims for providing high quality
products & services to the customers. On the other hand, in private or corporate sector the
organisations are governed and run by private bodies which can be owned by public or
individuals. These companies create effective marketing strategies for attracting customers and
increasing business profitability as well as sustainability of the organisation. Many large
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organisations and scalable entrepreneurship ventures are linked with corporate sectors that
focuses on sustainable development by developing competitive strategies to obtain growth.
D1 Critically analyse scope, Development and growth of entrepreneurial ventures.
There has been a rising trend of investment in new business and people are increasing their focus
on success of these businesses supporting it (Dana, 2018). There are various kinds of
classifications of entrepreneurs and the innovation level is rising thus leading to rise of new
ventures every time like prospector, defender, analyser and follower etc. also, the majority of
growth in this field can be attributed to small and medium sized entrepreneurs. Each
entrepreneurial venture is different according to their mission, vision and objectives as it affects
the scope and development of the business. Despite of the size of an organisation there are
various factors that influence its scope, growth and development for example, it is necessary for
every business or organisation to produce or provide those products and services which can fulfil
the needs of the customers. Along with growth and development each and every business venture
also needs to face a lot of challenges such as higher competition, increases risks and over
utilisation of resource.
LO 2
P3 Interpret and Assess relevant data and statistics illustrating impact of micro and small
businesses on economy.
In United Kingdom, micro and small businesses have contributed in a significant manner
towards the growth of its economy. The following table shows their contribution from year 2010
to 2017 :-
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It is clear form the above data that in all the three fields i.e. count, employment and turnover;
both micro and small industries have flourished. There are approximately 5.5 million employed
in micro business and the turnover has increased in multi-folds from 5 billion in 2010 to almost 8
billion in 2017 (UK SME Data, Stats & Charts, 2018). Similarly, the small business have also
grown from around 5 billion in 2010 to 6 billion in 2017.
Collectively, out of 99.3% (5.6 million) private sector businesses that were set up in 2018, 99.9%
of them were small and medium sector business and the total employment provided by them
amounted to 16.3 million. At present, the number of business operating is more than 4.5 million I
2018. For e.g. :- An example can be taken of social economy organizations who collectively
account for 6.5% of the total employment in EU as per the report published by International
Labour Organization. These provide personal and social services to those in need related to
housing, mental health, healthcare etc.
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Illustration 1: Concentration of Small businesses in UK
Source :- UK SME Data, Stats & Charts, 2018
P4 Explain the Importance of small business in social growth of economy.
There are two major aspects to be considered in an entrepreneurial venture (Chell and et.al.,
2016). First is that an entrepreneur should be well aware of the recent changes and trends that are
developing in the present market so that he can modify his business accordingly. Second, is the
entrepreneurs have the power in their hands to change the trends and push them in a healthier
direction or in a better manner. The certain points which they can keep in mind so that the
growth of society is fostered are :-
Employment creation :- Opening a new business helps in creation of jobs in that particular area
or locality thus creating better living conditions and improving their status by increase in the
income.
Innovation :- The basis on an entrepreneurship is a new idea and targeting this new market helps
in expansion of innovation leading to further increase in the new ideas thus improving the
practices of the present market scenario. (Burns and Dewhurst, 2016.)
Local Benefits :- Whenever a new business is set up, the locality is which it is set is hugely
benefited as it helps in increasing their prosperity and if the new business succeeds than there is a
huge development in that area.
Social Purpose :- It is the duty of all entrepreneurs to give back at least a part of what they are
taking away from the society and nature. CSR activities, welfare programs etc. helps in solving
many problems of the society.
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M2 Evaluate difference between small, medium and large business.
Illustration 2: Share of Businesses in UK
Source : UK SME Data, Stats & Charts, 2018
It can be seen that though the businesses are much more in small level but in matter of turnover,
large sector leaves behind the small and medium sector. There is a major difference among
small, medium and large business as illustrated in the above graph. UK economy consists 99.3%
of small businesses that provides 48% employment in the country. Whereas medium size
businesses provide 12% employment with only 15% of turnover. On the other hand, large
businesses are only 0.1% with maximum turnover of 49% and offering 40% of the total
employment in UK. It can be concluded that number of small businesses is increasing with a
huge scale and it is contributing in the level of employment of the country that leads to growth of
the economy.
D2 Critical examination of Impact of small business on levels of economy.
There is a great degree of impact at all the levels of economy as the rise in them ultimately
leads to rise in the living standards of people, helps in the growth of that area and altogether
helps in improving the economic conditions through better GDP etc. (Burch and et.al., 2016.).
The small sized businesses in UK have different impacts on the country’s economy at various
levels. In regional level, the small businesses can compete with similar type of businesses by
offering low price and quality products or services to the customers more effectively. Those
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business focus on recruiting employees with lesser salaries due to lack of financial resources. But
it also helps in reducing unemployment. At national level, the organisation can expand to several
areas of the country in order to increase its market share and revenue. On the hand, at
international level many small size businesses export their products to expand their reach and it
helps in growth and development of the global economy.
CONCLUSION
After going through the research in this report it can be concluded that the small and medium
level entrepreneurial ventures are a very important part in improving the economy of UK
assisting in their growth. This report also discussed the types and typologies of entrepreneurial
ventures.
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REFERENCES
Books and Journals
Burch, S. and et.al., 2016. Governing and accelerating transformative entrepreneurship:
exploring the potential for small business innovation on urban sustainability transitions.
Current opinion in environmental sustainability. 22. pp.26-32.
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
International Higher Education.
Chell, E. and et.al., 2016. Social entrepreneurship and business ethics: Does social equal ethical?.
Journal of business ethics.133(4).pp.619-625.
Dana, L.P., 2018. ENTREPRENEURSHIP & SMALL BUSINESS.
Julien, P.A., 2018. The state of the art in small business and entrepreneurship. Routledge.
Piperopoulos, P.G., 2016. Entrepreneurship, innovation and business clusters. Routledge.
Read, S. and et.al., 2016. Effectual entrepreneurship. Routledge.
Online
UK SME Data, Stats & Charts. 2018. [ONLINE] Available
through :<https://www.merchantsavvy.co.uk/uk-sme-data-stats-charts/>
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