Impact of Small Businesses on the Economy

This assignment examines the crucial influence of small businesses on various economic aspects. It delves into their contributions to job creation, local economies, innovation, and overall economic growth. The analysis also considers the challenges faced by small businesses and potential strategies for their success.

ENTREPRENEURSHIP
AND SMALL-BUSINESS
MANAGEMENT

Table of Contents
INTRODUCTION ..........................................................................................................................4
TASK 1............................................................................................................................................4
P1. Various types of entrepreneurial ventures and relationship with entrepreneurship
typologies...............................................................................................................................4
P2 Difference and Similarities between different kind of entrepreneurial ventures.............6
TASK 2............................................................................................................................................8
P3 Impact of both such as small and micro business on economy........................................8
P4 Importance and significance of starts-ups and small businesses in development of social
economy...............................................................................................................................11
TASK 3..........................................................................................................................................12
P5 Skills and Traits of entrepreneurs...................................................................................12
P6. Entrepreneurial personality indicate entrepreneurial mind-set and motivation ...........13
TASK 4..........................................................................................................................................14
P7. Background and experience of entrepreneurs can hinder entrepreneurship..................14
CONCLUSION..............................................................................................................................16
REFERENCES .............................................................................................................................17
.......................................................................................................................................................18

INTRODUCTION
Entrepreneurship is identified as a willingness to create, succeed and organize a business
venture simultaneously with risk to earn large number of profits (What is Entrepreneurship?,
2018). Entrepreneurship has important role and duty in the economic development or growth of
the enlarging global marketplace. In economics terms, entrepreneurship combined with natural
resources, labour, capital and land, can produced maximum profit. An entrepreneur is an
individual person who are working as a worker, runs and founds a small business, believing all
the rewards and risks of the venture (Harris, and Patten, 2014). In the present assignment,
various kinds of entrepreneurial venture and their relations with entrepreneurship typologies are
determined. There is difference and similarities between entrepreneurial investor also described.
Along with them contribution of both business activities such as micro and small in economic
development, it determined in this project. Importance of starts-ups in the progress of social
economy which is also described in this projects. Also, main traits and characteristics of
entrepreneurs that can affect on its mindset which is also be determined in this study.
TASK 1
P1. Various types of entrepreneurial ventures and relationship with entrepreneurship typologies
Concept of Entrepreneurship: It is identified as an effective process of developing
valuable idea in innovation which assist in growth of successful venture in order to earn large
number of profits. In simple word, it is the combination of capital, natural resources, labour and
land to produce maximum benefits. It entirely relay on ability and capacity of business men to
take risk, investigate market and implement business plan with purpose to render their services
or goods to public.
Different kind of entrepreneurial ventures: In marketplace, there are different number of
enterprise are available to be operated by a single person. It mainly set up the risk taking
capability of enterpriser that which organisation they choose (Altman, Sabato and Wilson, 2010).
As each and every venture are different one and all which are needed to complete entire
necessitate to launch business activities and functions. There are four kinds of entrepreneurial
venture which are determined as below:
Large entrepreneurship: It is a kind of entrepreneurship which involves maximum
amount of funds and risks in order to establish their business operations and functions. To satisfy

various demands of needs of clients and achieve share in market, large entrepreneurship are
needed to select advanced technologies, innovations, legislation and many other. For
implementation of entire factors, such enterprise supports to create sustainability in its business
growth.
Social entrepreneurship: In this organisation, different entrepreneurial ventures take
their full efforts in providing quality services and products for the progress of community and
pleasing social requirements. Their main motive is to solve different problems and difficulties
which are present in society (Audretsch and Link, 2012). They are not functioning or performing
for the wealth creation of businesspeople and develop an effective place to live.
Scalable starts-ups entrepreneurship: They have potentials to become a most successful
organisation. Aim of this organisation is high and they believe that their through may change the
world. These type of business involve maximum amount of profit and risk. They are needed to
be funded or capitalised by crazy capitalist which are successful to proceed maximum risk to
attain more profits. Main aim and purpose of such ventures is to modify entire universe with
their new ideas. They needs a more amount of fund for rapid enlargement.
Small-business entrepreneurship: This enterprise covers different activities or functions
in which employees number are less than fifty and having annual turnover is approx 6.5 million.
They needs less amount of capital as well as risk in order to operate business operations and
functions at large. There are some small business such as consultants, plumbers, agents,
electricians and many other.
Typologies of entrepreneurship: In marketplace, there are large number of enterprisers are
available which renders their services and products in the development of society (Barringer,
2012). Their motive is to fulfil basic needs and wants of the audience and participate in
betterment of economy. Some typologies are determined as below:
Serial entrepreneur: These are the entrepreneurs which establish a venture and after it
successful running of business, they move on to next venture. It includes different enterpriser
who exist with innovative plan and operates their business functions and activities in innovative
manner. In day to day activities and functioning of business entity, such entrepreneurs take their
full efforts. Main aim of this venture is to create minimum profit.
Lifestyle venture: It is a small firm that administer autonomy, independence and control
to its owner. Focuses of this venture is to capturing large share and proper uses of resources. It

gives flexibility in meeting, places and other. Their main aim is to earn money for their living
and earn livelihood by becoming an entrepreneur.
Female entrepreneur: This business mainly depends on female capability and capacity.
Under this, an enterprise which are control and managed by women only. They have 51% shares
in across the globe.
Male entrepreneur: This type of enterprise mainly depends on men's capability and
power (Baum, Frese and Baron, 2014). Such business entity which are managed and monitored
by male only. They have 49 % share in across the globe.
P2 Difference and Similarities between different kind of entrepreneurial ventures
In marketplace, there are large number of the entrepreneurial venture who play vital role
in development of economy or society. All ventures has similarities and difference which are
determined as below:
Lifestyle ventures similarities with business Serial entrepreneurs venture and similarities
with business
 These ventures provides flexibility in
places, hours, attire and places.
 This venture not have any aim and
motive to achieve more advantages and
benefits in limited time period.
 In business operations, they need
competent and knowledges persons
who can easily increase their profits
(Bosma and Levie, 2010).
 They mainly emphasis on recording
large number of market share and
proper usage of resources or initiatives
so that objectives and goals are
achieved effectively.
 These type of ventures mainly focuses
on keeping better position or goodwill
in market as well as generate maximum
amount of profits.
 This business is also established as a
type of small scale and just to perform
for the large number of person.
 Both ventures have similar objectives in
order to hire knowledges and talented
employees.
 They also focuses on capturing large
market share and accurate utilisation of
initiatives.
Difference Difference
 They not communicate all information  They transmit all information or data

or data regarding growing state of
business operations to financial
investors.
 They doest not have any kind of
strategy to prepared and established
their venture with passion (Bruton,
Ahlstrom and Li, 2010).
 They mainly start business for own
earnings and livelihood.
about internal and external condition of
firm to financial capitalist on daily
basis.
 They are having accurate place from
where such entrepreneur operates and
launch their business operations in an
effective and efficient manner.
 They do not care about earning money
for family or own living. Their attitude
is completely different from Lifestyle
venture, they start a business for selling
it to other entity so they can earn more
money and become rich.
Female entrepreneur venture and their
similarities with business
Male entrepreneur ventures and their
similarities with business
 Main aim and purpose of female
enterpriser is to capture maximum
amount of market share and increase
sales.
 They are focused on their work and
performance whether it is in their
home as well as office.
 They have more power in order to
attract customers towards business
products and services.
 Both female and male entrepreneurs
have same motive in order to increase
their market share and achieve large
benefits (Dacin, Dacin and Matear,
2010).
 They also has more power and
capability to attract large number of the
clients towards services and products
of company.
 They also emphasised when they do all
activities and functions of company.
Difference Difference
 Female entrepreneur who innovate  Motivation and confidence level of

adopt and initiate business actively.
 They take maximum time in order to
make effective decision regarding
business growth and success.
 Female entrepreneur have excellent
team management and communication
quality as compared to male
entrepreneur.
male entrepreneur is more high as
compared to female.
 They take quick decision about
achievement of long term growth and
occurrence.
 Communication skill of the male
entrepreneurs are less as compared to
female entrepreneurs.
TASK 2
P3 Impact of both such as small and micro business on economy
Generally, there are mainly three kind of businesses are functioning and performing in
United Kingdom, namely Micro, large and small. All these business has more effect on economy
or society (Defourny and Nyssens, 2010). All these enterprises are assist in development and
betterment of community. In this government play vital role in order to determine best way about
overcome the impacts of Brexit in to encourage micro and small business actions in country. It
will render maximum chances of employment, removal of unemployment, effective alteration of
infrastructure, maximise cash inflow in the economy. So regarding, success and development of
small business, government of UK prepare or implement linnet strategies or policies in planned
manner.
Different business such as Micro, small and large are determined as below:
Micro: In size, it is more small, if the employees number are also less about 10 and
having sales approx £ 2 million. Activities and functions of such business entity is also small. In
marketplace, they come up with innovative idea which is beneficial for them to maximise their
turnover.
Small: Under this business number of workers are less than fifty and having sales about £
6.6 million. Functions and activities of such concern are largest as compare to micro entity. Main
motive and objectives of such organisation is to increase their sales in allotted time period
(Delgado, Porter and Stern, 2010).

Medium: In this organisation number of staff members are less than two hundred fifty
and having annual sales is less than £ 25.9 million. Functions and activities of these type of
organisation is bigger as compared to small and micro firms. Main aim of this concern is to
achieve long term growth and success in limited time period.
Characteristic of Partnership, sole proprietorship and private organisation:
Private firm: Under this enterprise, different functions and activities of company is managed and
monitored by individual and non-governmental business. UK government has no power in to
control private business activities in accurately. Main aim of such enterprise is to earn maximum
amount of profits. Characteristic of these enterprise are described as below:
 All activities of business is monitored and handled by non-governmental company as
well as individual. Main motive is to maximise sales and turnover of the company.
Sole proprietorship: Under this, different business entities are includes which are monitored and
established by an individual properly (Neck and Greene, 2011). They have more power to
control entire operations of firm and having sole obligation over whole losses and risk. Some
characteristic of these enterprise are described as below:
 Monitored and launched by an individual. Business proprietor have unlimited liability or duty.
Partnership: It is identified as a type of enterprise which includes more than two parties. They
have some ability and power to share interest and loss with one of all. Main objective of this
enterprise to achieve long term goals and objectives in given time duration. The major
characteristic are determined as below:
 Having equal loss and profit sharing ratio. Entire partners are having unlimited obligation or liability.
There are mainly four areas of the economy that the effect of SME's can be determined are as
follow:

Illustration 1: Macro and Small business employment
(Source: Effects on different location, 2015)
International and National Area: The effect of small medium enterprise on national area
is that they assist in creating economy growth by establishing large number of business functions
and thus providing various chances of jobs (Schaper and et. al., 2014). Through, maximum
amount of capital will be created in the economy development.
Regional Area: SME's effects on region area, it means different advantages and benefits
are get of company in order to make goods and services as per their choice (Impact of small-
business in UK economy, 2018). In this area, company understood about customers needs and
wants and give quality product in order to satisfy them.
Local Area: In such area small and medium size organisation having more effects. Role
and responsibility of this is to provide different opportunities to the unemployed person. So it
create large effects on the development and growth of economy.

P4 Importance and significance of starts-ups and small businesses in development of social
economy
Brexit: It is the form of British exit, this kind of decision or judgement is taken of the
government of United Kingdom to leave EU in 23 June 2016. Along with them, different adverse
and negative effects are observed by legal authority on their growth and development of
economy. It would decreased income level of United Kingdom (Storey, 2016). It would occur
maximum trade barriers which are existence after leave of United Kingdom. There are different
sources where authority yield their incomes, for example; diminution in exports from EU
countries.
Difference between Start-up's and small business
Small-business Start-up's
 These are a type of business which are
exist with an innovative plan.
 They needed maximum amount of
capital in comparison to start-up's
business but established their functions
and activities as small organisation.
 They mainly renders traditions goods to
its clients
 They are mainly developing through an
innovative idea or thought.
 It develops new idea or opinion and
having maximum market size.
 These business have innovative ideas
and therefore tries to render something
to clients.
 They having Scalable business model.
Effect of small-business on social economy of United Kingdom are as below:
Impact on poverty: This factor having more impact on the development of economy
because such factor available in the nation then their progress is much slow (Unger and et. al.,
2011). They assist in decreasing the poverty or wealth from the economic system by developing
more employment and wealth in economy.
Effect on taxes and revenue: The effects of taxes and revenue in United Kingdom is
more powerful because they are developing more opportunities of jobs. There is direct
connection between taxes and revenues as if they maximise in sales then there will be growing in
income.
Some other importance and significance of small-business and new venture are determined as
below:

Employment opportunities: Both business are plays an essential role in development of
maximum opportunity or chances for the persons. They help in the growth and development of
economy in an effective and efficient manner. In this different advantages are traced by an
individual and community like equal wealth distribution, reduction in poverty, enhancement in
living standard and many other benefits.
Enhancement in social security: Recently, government of United Kingdom has more
control on business and have sole capability to set their own rules and conditions (Welter, 2011).
This output in charge on maximum social security or safety to local areas and the in person of
community that they are acquiring effective quality of commodity.
Enhancement in United Kingdom global commercialism: Earlier Brexit the trade union
of United Kingdom entirely relay on EU. But after the Brexit impact, industrial sector and other
business is impaired. In order to overcome such impacts linnet policies and strategies are created
by legal authority which assist in creation on global commercialism. Due to maximise in figure
of new business , exports number are also maximise which enhance the country position in
international place.
TASK 3
P5 Skills and Traits of entrepreneurs
In order to opening a new business is easy task for the manager but entrepreneur is
difficult. If an individual wants and needs to get a successful business person they have to take
various characteristic and skills (Wheelen and Hunger, 2011). These features are applied to do all
activities in proper manner. These are present in an entrepreneur and manager are determined as
below:
Characteristic or skills Entrepreneur Manager
Communication skill Such skill is play an vital role
in creating a successful
business as the plan will be
transmitted to the workers in
proper manner.
Manager proceed this skill in
order to communicate all
information and data to their
employees.
Delegation The enterpriser who wants and
needs to classifies his work or
In the organisation, manager is
one of the main person who

role in entire department and
not taken the all work or
activity himself.
have some authority to divide
their all work to their juniors
(Zott, Amit and Massa, 2011).
Strategic vision It is another skill which is
important for the entrepreneur
to achieve long term goals and
objectives by providing quality
products and services to the
customers.
Manager has such type of
quality in order to provide
proper guidance and direction
to their staff members with
aim of accomplish
predetermined goals.
Critical thinking This characteristic highly
assist the entrepreneur to take
an effective decision regarding
innovation, new technologies
and many other resources. For
achievement of this, they
critical think about this
situation.
Mangers has critical thinking
ability in order to know
policies and plans that
implemented and formulated
in the marketplace.
There are some traits which re determined as below:
 The enterpriser should be analysed towards accomplishing their goals and targets.
 They should not be scared in order to proceed risks or hazards because after this, they are
capable to achieve maximum benefits (Zott, Amit and Massa, 2011).
 Entrepreneur has more power of confidence in order to face different difficult situation in
their life.
 They always ready to acquire innovative things to apply in their business operations
which turn in achievement of long term growth.
P6. Entrepreneurial personality indicate entrepreneurial mind-set and motivation
There are two successful entrepreneurs such as Bill gates and Mark Zuckerberg. Both are
have extraordinary traits and characteristic which are determined above. Significance of
entrepreneurial personality in creating successful business entity in the economy. It is necessary
and important as entire activities and functions are organised by the entrepreneurs. In order to

have an effective personality, different characteristic, traits and skills must be exist in the
enterpriser. These traits develop a strong personality which assist in executing entire activities in
systematic manner (Bruton, Ahlstrom and Li, 2010). It also identified that the large number of
person who are performing or functioning with the business person is having more impact with
the attribute as well.
In order to analyses the traits or attributes, the Big Five framework are applied which is
determined as below:
Openness to experience: It is a first part of Big Five Force model that reflect the level of
innovation, creativity and rational thinking an individual is having. This will also define the
degree to which an individual is thought to be helpless and imaginative. So, in simple word, it
define that the enterpriser should be successful and non-aligned so that they can acquire
something innovative always.
Conscientiousness: It is an another part of trait that tells the business person should be
effective in their functions and also intended regarding accomplishing their long term goal and
objective. This assist them in attaining their purpose on time to time.
Extraversion: It is another factor which interpret that the enterpriser is physical at
function and it is also very social in nature (Bruton, Ahlstrom and Li, 2010). They take entire
qualities and characteristic in order to accomplish their predetermined goals.
Agreeableness: This factor show that the enterpriser or manager should be better,
trustworthy and cooperative also so the employees who is performing with him.
Emotional stability: It is last trait that depict that the business person should be
emphasised and clam in order to finished their all work and activity on time.
TASK 4
P7. Background and experience of entrepreneurs can hinder entrepreneurship
There are different drawbacks and rewards of entrepreneurs which are determined as
below:
Rewards Drawbacks
Control: It is identified as an effective process
in which enterpriser gets the functions and like
to do.
Administration or management: Taking entire
decision and judgements, it can be good but
sometime it take burden on employees.

Excitement: Each and every enterpriser
peaceful with their work or activity which is
essential for them to complete their all
functions in a proper manner.
Competition or Rivalry: As an owner of small
business, staying in rivalry is less challenging.
There will be requirement to distinguish our
enterprise from others.
Flexibility: In this all entrepreneurs set flexible
working hours as per their needs and wants.
Work schedule: It is unpredictable, therefore is
is more essential for the enterpriser to handle
their activity so that they finished business
operations and functions on time (Defourny
and Nyssens, 2010).
Freedom: Entrepreneurs are having
independence capability to do their all work
and functions in a proper time period.
No regular wages or salary: In the organisation,
salary of employees is not fix. So in this they
are unhappy to do their work in an appropriate
manner.
There are different aspects such as background and experience that effects on the
entrepreneurship. Entrepreneurs is an individual who run their business operations and activities
in an effective and efficient manner .
Family background: Bill Gates is a successful entrepreneur in their industry. Family background
of this person is different from entrepreneurship which rise risk and many other difficulties. It is
highly hinder on its motivation and personality.
Family background of the Mark Zuckerberg is also different from entrepreneurship. In
opening new business they face different risk and uncertainty. In during the day sales and
revenue is also low which highly effects on entrepreneurs mindset and motivation also.
Nationality: This factor also impacts on entrepreneurs motivation as well as mindset in
direct way. It is main factor that assist in analysing country culture in systematic manner..
Nationality of Mark Zuckerberg is New-York which extremely hinder its dreams level.
In cause of Bill Gates, he is a founder of Microsoft corporation, nationality of this person
is also different from his entrepreneurship which highly effects on its mindset as well as
motivation level also.

Social Network: It is very important factor that highly impacts on entire scale of
economy to communicate with customers directly and indirectly. Mark Zuckerberg start their
business so in this the need to advertise their process, products and services in marketplace. In
this they use different social sites such as such as Facebook, Twitter and so on.
Bill Gates it s founder of Microsoft corporation, in the business they use different
technology in order to expand their business operations at international and different level.
Chances in the technology and production process that impacted on entrepreneur mindset and
motivation.
Education: It is identify as an another foremost factor that impacts on entrepreneurs
motivation and mindset. Education background of Mark Zuckerberg is not same from the process
of entrepreneurship which highly effects its mindset for opening new venture in systematic
manner.
Bill Gates, he was a National Merit scholar student. Education background of this
entrepreneur is also not match with entrepreneurship but they decide to launch a new venture
which help them to success in market.
CONCLUSION
From the above mentioned report, it can be determined that entrepreneurship is an
effective process. It assist the unemployed person in order to provide best opportunities to them
in a systematic way. There are different types of entrepreneurial venture which are mainly
related with the typologies of entrepreneurship. These have more impact on individual and
society. Impact of small and micro business on economy in different ways such as employment,
technologies and many other. Start-up's and small business both are essential for the unemployed
person because it gives various opportunities to the people of society. Skills and traits of
entrepreneurs as well as personalty effects on its mind-set and motivation. In order to identified
traits, each and every organisation applied Big five model.

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