Impact of Small Business on UK Economy

Entrepreneurship and Small Business Management INTRODUCTION 1 LO11 P1 Types of entrepreneurial ventures and there relation with typology of entrepreneurship.1 Entrepreneur: Entrepreneur is a person having innovating ideas and putting those ideas into reality by identifying the need of that creation in business world(Scarborough, 2016).1 P2 Similarities and differences between entrepreneurial ventures.2 LO25 P3 Impact of small business on UK economy 5 P4 Impact of small business in social economy. 2 Entrepreneur: Entrepreneur is a person

Entrepreneurship and Small Business
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1 .................................................................................................................................................1
P1 Types of entrepreneurial ventures and there relation with typology of entrepreneurship.....1
Entrepreneur: Entrepreneur is a person having innovating ideas and putting those ideas into
reality by identifying the need of that creation in business world(Scarborough, 2016).............1
P2 Similarities and differences between entrepreneurial ventures.............................................2
LO2..................................................................................................................................................5
P3 Impact of small business on UK economy............................................................................5
P4 Impact of small business in social economy..........................................................................6
LO3..................................................................................................................................................7
P5 Characteristics and skills of successful entrepreneurs and difference between a business
manager and a entrepreneur........................................................................................................7
P6 aspect of the entrepreneurial personality reflect on entrepreneurial motivation and mindset
.....................................................................................................................................................9
LO4................................................................................................................................................11
P7 How background and experience can hinder or foster entrepreneurship.............................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Entrepreneurship refers to a large company when started an small business led by an
entrepreneur. Every small business need an entrepreneur to start and survive in market. Small
business usually deal with established products and services for limited growth expectation,
while entrepreneur focus on innovation and offering for high growth in market and to have
returns. This study will lay about who Entrepreneurs are and what entrepreneurship means. It
also tells about types of entrepreneurial ventures and there relation with entrepreneurship. It will
include three types of Ventures:- Survival firms, high growth firm and Aggressive firm. These
ventures are further related to Different typologies of the business. Micro and small businesses
impact the economy, so this study is also been done by assessing relevant data and statistics.
Further importance of small businesses and startups in growth of social economy has been
studied(Burns, 2016).
LO1
P1 Types of entrepreneurial ventures and there relation with typology of entrepreneurship.
Entrepreneur: Entrepreneur is a person having innovating ideas and putting those ideas into
reality by identifying the need of that creation in business world(Scarborough, 2016).
Entrepreneurship: When people who are imaginative are putting these ideas into reality that is,
processing it into a design and launching it further in market to run a new business. This whole
process is known as Entrepreneurship(Burns and Dewhurst, 2016).
Entrepreneurial venture: An organisation that take innovation in hand to create opportunity
which will result to economic growth and socialism.
Enterprise: It refers to an undertaking which is particularly difficult to handle and risky in
case(Julien, 2018).
Types of Entrepreneurial Venture:-
 Survival Firms: Firms which reinvests profits, expands its business operations and
growth strategies for long term pay-offs. This may include cost cutting in business,
Focusing on profit margins and set different schemes to save cash. For example Booz and
Company's industry in UK is a survival firm(Storey, 2016).
 High growth firms: Firms which are growing in market at a good speed then its broader
economy. There is an increment in there annual revenues as compare to there average
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over a sustained period. HGF limited is an example of High growth firm in UK as it is
second in rank out of 100 trade mark filers in UK(Cole, 2018).
 Aggressive growth firms: It is an investment objective to have high capital gain
potential with help of mutual fund investment or among growth shares that are stock of
companies which company expect to grow at a faster rate in the stock market. Example of
such firm in UK is Bain and company(Cole, 2018).
Typologies of Entrepreneurship :-
 Lifestyle Firms : These are the ventures that provide a rational life to the founders of the
firm preferably not to sustain any risks that will come with the high growth of the firm.
These firms are attractive in eyes of investors, but these firms are completely dependable
on founders skills, personality and energy they put to exercise their personal
talent((Venkataraman, 2019).
 Scalable enterprise: These are enterprises which have potential to multiply there
revenue with the minimum incremental cost. Basically investors are in search of such
startups which are ascendible. This can be done by building solid foundation and with
strategic planning to focus on core strength of the business(Ribeiro-Soriano, 2017).
 Social enterprise: It is a commercial organisation which has some social objectives that
distribute its primary purpose. They maximise profits by keeping in mind that it will be a
benefit to society and our environment. Entrepreneur of such enterprise are valuing the
society and they think what they taking from society have to be returned with good
practices(Burch and et.al., 2016).
P2 Similarities and differences between entrepreneurial ventures.
Similarities between entrepreneurial ventures:-
 Strong-willed entrepreneur:- Survival firms, High Growth firms and Aggressive
growth firms are ventures where entrepreneur who are having strong will power to take
their business at that level where there growth is high in market.
 Funding from some venture capitalist or investor:- In all three types of ventures the
business is in search of such investors who are keen to invest in startups which are
ascendible because every venture is in need of funding.
 Creative idea:- Every venture irrespective of type whether it is Survival firms, High
growth firms or Aggressive firms, is in search of new ideas to create need in market for
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there products. These ideas bring opportunity for the firm so that they can survive in
market and give tough competition to market(Chell and et.al., 2016).
 Creating a Brand name:- Every venture is working to create an idea which when comes
in market become a brand in eyes of customers. When a product become brand then it
will be easy for the firm to survive in market and to be a competitor for other firms.
 Sustain against large businesses:- All types of ventures are wiling to sustain in market
as long as possible. There sustainability depend on how competitive they are in the
market and what values they will come up with in near future. All this lead to growth of
the firm in right direction.
 Constant Innovation:- If firms are working on new ideas then this constant innovation
will lead to development of there product and market growth(Amato and et.al., 2017).
 Driving forces:- There are various forces which directly and indirectly affect growth of
the organisation. In every venture there are three basic driving forces :- Management,
Opportunity, and Resources. If an organisation is having a good management, grabbing
different opportunity from market and having resources to full fill needs of customers
then it will be at a growth stage giving tough competition in market(Volery and
Mazzarol, 2015).

Difference between entrepreneurial ventures:
Survival High growth Aggressive growth
Annual
growth Rate
Annual growth rate is
nominal in survival
ventures.
In case of high
growth ventures,
annual growth rate is
about 10 to 15%.
Annual growth is above
20%.
Time Horizon Survival ventures have
day to day time
horizon.
They have one to
two years of time
horizon.
In Aggressive ventures
time horizon is between
2 to 5 years.
Managerial
focus
There managerial
focus is to sell
whatever they have.
They focus on
incremental strategic
growth.
There managerial focus
is on scalability.
Managerial They have reactive The managerial style They have Strategic and
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style managerial style. in high growth
ventures are
strategic.
proactive style of
management.
Entrepreneur
orientation
It is very low in this
case
Moderate
entrepreneurial
orientation is seen.
It is having high
entrepreneur orientation.
Managerial
skills
Making and selling is
managerial skills in
survival ventures.
Planning,
Strategizing and
delegating is the
managerial skills in
High growth
ventures.
Managerial skills are
Planning, innovation,
cash flow management
and negotiation
Technology
Investment
Don't invest in
technology
Moderately invest in
technology.
They highly invest in
technology.
Exit approach They usually shut
down the firm.
They sell, merge or
transfer the firm.
They either sell, merge
or go public.
Source of
finance
There source of
finance are they
themselves.
Self, family and
friends, bank or
private investors are
sources of finance.
They connect with
banks, private investors,
venture capital firms or
in public market.
Organisation
Structure
Little to none in
structure.
Functional and
centralized structure
It is having functional
and market based
structure.
Economic
motives
There economic
motive is to sustain
oneself and there
family.
There economic
motive is for wealth
creation.
There economic motive
is also wealth creation.
Reward Weekly income is
only reward.
There reward are
salary, performance
incentives and equity
For them reward is
Equity, Capital gain.
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they get from firm.
LO2
P3 Impact of small business on UK economy
Micro Business
Micro businesses are the type of business which operate in very small scape and does
have more than 10 employees in their firm. Micro business add value to the economy of the
country by Increasing employment, increasing purchase power, enhancing income and lowering
the cost(Wang, Jessup and Clay, 2015).
Small Business
Small businesses are private businesses which are owned and operated independently.
The size of small business varies by county and sector. In United Kingdom the employees in
small business are less the 50 and their turnover is less than 10 million pounds((Schaper, 2016).
The impact of small and micro businesses on the economy.
Small and micro businesses are really the backbone of the United kingdom's economy
because they are around 99.3% of all private sector businesses. SMEs are around 99.5% in
industrial sector. United kingdom has the highest number of SMEs in Europe. United kingdom
has around 70 SMEs in around per 1000 persons, which means UK is among the leading
countries in SMEs population density in the world. The total number of business per person is
higher in southern England comparing to the whole United Kingdom. Small and micro
businesses plays a major role in growth, development of the economy, moreover SMEs bring
innovation to the businesses in the market. They also have the highest growth rate compare to
other businesses in any sector. There are around 5.7 million SMEs in United kingdom in which
1.4 million are employing business at the start of 2018. 45% around 2.6 million of SMEs were
registered for PAYE or VAT, which is highest in Europe, and one of the leading worldwide.
They offer around 16.3 million employment which is nearly 60% employment of all private
sector in the United Kingdom. According to UK's government research at the start of 2018.
SMEs contribute nearly 2 trillion pounds which are approx 52% of annual turnover of private
sectors in united kingdom. According to study the business population of small and micro
businesses fell by 0.5% which is around 27000 businesses but in a period the employment in
private sectors increase dramatically increased by 2% in private sector, which sums to around
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304,000. There were 14,424,400 people in United Kingdom were hired last year by SMEs. But
according to campaign group the SMEs drop by around 25000-27000 every year due to high
competition from MNCs, this will surely affect the economy. Since the SMEs are playing such a
major role in growth and development of economy the United kingdom government is planning
to introduce new budget and schemes to support the Small and micro businesses(Durst and Roth,
2018).
P4 Impact of small business in social economy.
Social Economy : Social economy exhibit the relationship between the social behaviour
and economy. It examines how the behaviour of the consumer is influenced by human
philosophies , moral , ethics and how it relates to economic. The social economy formation
includes organisation and enterprises like mutual, association, foundation, cooperatives, and
social enterprises. Social economy is proposed in all economic sectors just like banking,
agriculture, retailing, production etc(Dennis, 2017).
Importance of the small business start-up to the growth of the social economy.
1. Employment creation: Small communities in UK, there are trends of buying and selling
of goods with neighbours and friends. This makes economic benefits for localised people
by shopping locally. That is creating the employment in small villages, towns. The
backbone of the UK economy is a small business. It is very necessary to support the
small businesses that is increases the opportunity for those persons who is unemployed. If
one of the person start up the business that creates the earning for others. For starting up
business there is not compulsion to required the higher degree of studies, it may include
agricultural production, agro-based services, food processing that is helps for sustaining
green revolution as well(Venkataraman, 2019).
2. Innovation: The innovation plays vital role in establishment of start ups of new
businesses. The innovative ideas create new products, new trends and also implement
these ideas into productive solution which is very useful for bring up the small business.
Start with the small businesses is not always remain it small. Amazon and Microsoft is
the best example that how can change the ideology of business. Many start-ups able to
respond quickly as per the changes in the economic environment.
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3. Improvement in life styles: Everyone in the country UK wish to acquire knowledge,
wants good living standard, best job opportunities. This can be happen by establishing the
small business start-up in local community. So many factors are affecting in living
standard like income, employment, housing affordability. The people of the UK leading
to promote to set up small scale business for welfare of their country(Ribeiro-Soriano,
2017).
4. Leading the Diversification: UK population is more diverse ethnically. There is so
variety of people living in the England that may be outsiders of the country in that case
more diversity found in terms of culture, language, religion ,genders, ages and so on. It is
helps in stimulates the business plans and encourage the work culture and providing
employment opportunities. This diversified culture approaches to development of starting
up the small business(Burch and et.al., 2016).
5. Local Development: For economic development of any country it is required to reducing
the unemployment and establishment of small and medium scale enterprises are helps in
increasing manufacturing industries and infrastructure. Improvement in local areas is
such necessary thing for decreasing the issue like poverty, pollutions, slum and other
factor. It helps to improve the growth of urban and rural development. Presence of this
small scale business leading to development of community. As per the improvement of
local areas so many co-operative banks and insurance policy services has been improved
and also banking and financial sector.(Chell and et.al., 2016).
LO3
P5 Characteristics and skills of successful entrepreneurs and difference between a business
manager and a entrepreneur.
Richard Branson- Branson is the one of the most successful entrepreneurs and the
founder the Virgin Records.
Skills:-
 Finance management:- Branson have good finance management skills and it helps to
crate various business without taking help of the other financial company and create the
group of company's.
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 Passion about work:- Branson has passion to create something new and then it helps to
found Student magazine and virgin record(Amato and et.al., 2017).
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 Time management skill: It is essential skill that makes the person a good entrepreneur, a
business owner must be able to manage the time well so that entire activities can be
completed on time. Richard Branson had this skill which has made him unique and he has
become to windup all task on time.
 Interpersonal skill: This is another skill in the entrepreneur, individual must be able to
develop healthy relationship with others. If individual is unable to do the same then
individual will not be able to retain investors and other stakeholders in business for
longer duration.
Characteristic:-
 Self motivated :-Branson are self motivated person and take risk even after the failure
which is the main characteristic of an entrepreneur and help for set the business at the big
level.
 Understand what you Delivered :- As the entrepreneur it always understands what are
delivered by him in the market which make him a successful entrepreneur of the all time.
These skills and characteristic make him a good businessman and a great entrepreneur and set
the example for the new entrepreneur's.
Philip Green- Philip is a great entrepreneur and the chairman of the Arcadia group which is an
outfit retailer company.
Skills:-
 Communication:-Philips are good in communication this skill help him to grow
the business in various city's of the many country's and make good connection
with this skill.
 Self motivated:- Philip are self motivate person and starting of the business even
after the failure Philip always ready to take risk in business which is the main skill
of a successful entrepreneur(Volery and Mazzarol, 2015).
 Problem solving skill: This is the skill which is in the entrepreneur, individual is
able to resolve problem quickly. Whenever sudden situations take place
individual find effective solution which supports them to reach to desired goal.
 Resilience: Individual is able to handle stress and slow progress of other
employees and stakeholders. This makes them able to raise their confidence and
making them positive towards the firm.
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Characteristic:-
 Flexible about change:-Philip always flexible to adopt the new changes in the outfit
market which help him to maintain the market value of the company in the retail industry.
 Passion about work:-Philips are passionate about his work so it helps him to make a
group of the outfit companies. Which make him a good businessman and a successful
entrepreneur of the all time(Wang, Jessup and Clay, 2015).
These skills and characteristic make him a good businessman and a great entrepreneur.
Entrepreneur is person who start a new business with the help of the unique idea and the
owner of the company in other hand manager is the person who work in the Company's
Management department and manage the employee of the company. Entrepreneur is the owner
of the company and take the all kind of financial risk and the other hand manger is the employee
of the company who works for the salary and does not take any kind of risk and try to avoid the
risk factors. Entrepreneur always try to start a new business and expand the business idea in the
other hand manger will focus on the daily soothing functioning of the business. Entrepreneur
are motivated from his achievement and the manger's motivation comes from his power and
authenticity which is given by the company. The rewords for the entrepreneur is the profit of the
company and reword for the manger is the salary which is given by the company. It is not
necessary that all entrepreneur are well educated many entrepreneur are school and college
dropouts they only need and a good idea and capability and motivation to start the company or a
business and other hand manger need to be trained and educated according to the profile. Many
time entrepreneur not know about the aspect about the company so manger will manager will
manger these thighs through the experience(Schaper, 2016).
P6 aspect of the entrepreneurial personality reflect on entrepreneurial motivation and mindset
These are the five main entrepreneurial personality aspect which are reflected on entrepreneurial
motivation and mindset.
 Openness to experience – people who are open to take experience, open to emotion and
twilling to try new thing they are more creative, focused and aware for their feeling.
Richard Branson is a creative person and always open to experience which help him to
learn the new things about the business and learn from his previous mistakes. Philip
green creative about his business and aware for the market which help him to maintain
the company's growth and value in the retail market.
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 Conscientiousness- Conscientious is knows as the self discipline, aware about the own
duties and focus on the achievement. Richard Branson is a self motivated person and
always focus on his goals which help him to start the business and set good example for
the new entrepreneurs. Philip green set the goal to start the retail company and always
focus on the goals and aware about his own duties which help him to achieve the goal
and set the good example for the other entrepreneur.
 Extraversion- Extraversion is known as the interaction with new people and connection
building with employee. Richard Branson is an Extraversion person which help him to
build connection with the people and from this nature company's employee were retained
and connection were build with other company which help him to grow the business.
Philip green also good in the connection building which help him to start the new stores
in all big city's of UK.
 Agreeableness- Agreeableness is a personality traits and individual behaviour and
define the personality structure of a person. It shows the leadership skills of the person.
Richard Branson has the Agreeableness personality which help him to express the things
to the other and make new connection in the business. Philips green's agreeableness
personalty help to express the things to other which help him to connect to new people
and grow the business.
 Neuroticism- it is the tendency to experience negative emotion like anger, depression
and it is also called emotional instability. All entrepreneur faced this situation in the
starting of career and how to faced this situation makes him a good and successful
entrepreneur. In the starting of Richard Branson's career his failure it start from the
failure but Branson handle this situation with responsibility and start the business that
makes him a good businessman and entrepreneur. Philip green's faced too many failures
in the business but it handles the all situation with the responsibility and that quality of
facing the failure makes him a good businessman and entrepreneur(Durst and Roth,
2018).
LO4
P7 How background and experience can hinder or foster entrepreneurship.
Richard Branson:- He was born in the year 1950, in Surrey, England. He usually
struggled in his school days and when he was at an age of 16 he dropped out and decided to do
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his own business and started with creation of Virgin records. In 1980 he come up with Virgin
Atlantic airline and series of Virgin megastores. Now he has a control on more than 400
companies. His background helped him to become a young entrepreneur at an age 16. From a
young age his dream was cleared and he worked very hard for it. He started innovating things at
a young age because of that his ability to think differently become his strength and created value
to his organisation. His positive behaviour lead to organisation's positive work culture and
environment. His willingness to learn and think differently took him to reach this level of
success. His decision making skills are very different from other entrepreneurs as he thinks in all
directions and then make decisions. This all has come up in his behaviour due to his experience.
Philip Green:- He was born in the year 1952 in England and is chairman of Arcadia
group a retail company. When he was 12, his father died due to a heart attack. After his fathers
sudden death he inherited his business. He left his boarding school at an age of 15 and started
working for a shoe importer before travelling to US and Europe. On his return at an age 21 he set
up his own business, importing jeans from Far east to sell on to London retailers. In 1979 he
bought up entire stock of ten designer-label clothes retailers then had dry cleaned, put on hangers
and wrapped them so that they look new and finally bought shop to sell them. In 1988 with his
good business practices and innovative skills he became chairman and chief executive of Amber
day, a discount retailer. He is passionate towards his work and has good strategic decision
making. He is a good leader and has ability to lead a team and always ready to inspire the
business to improve. His experience and background has taken him to this level of success and
positive mindset(Dennis, 2017).
CONCLUSION
After going through above report it has been summarised that there are different types of
entrepreneurial ventures which are having key relation with typology of entrepreneurship.
Further it has been concluded that there are various similarities and differences between
entrepreneurial ventures which help in knowing which venture is having what typology. It also
has been summarised in the report that micro and small businesses have a great impact on the
economy and for social economy business startups plays an important role. Further the report has
concluded that traits of business entrepreneurs differs them from business mangers in many ways
and there are various aspects on which personality of an entrepreneur depends on. At last it has
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been concluded in the report that background of entrepreneur and their experience hinder and
foster them in many ways to get success as an entrepreneur.
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