Importance of Small Businesses and Start-ups in the Social Economy

This document discusses the different types of entrepreneurial ventures and their typology, the similarities and differences between entrepreneurial ventures, the impact of micro and small businesses on the economy, and the importance of small businesses and start-ups to the growth of the social economy. It also evaluates the differences between small, medium, and large businesses in terms of capital and employment.

Entrepreneurship &
Small Business
Management

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Different types of entrepreneurial ventures and typology of entrepreneurship......................3
P2: Explore the similarities and differences between entrepreneurial ventures..........................3
M1: Investigate a diverse range of entrepreneurial ventures to demonstrate an understanding of
entrepreneurship in both the public and corporate sector............................................................3
TASK 2............................................................................................................................................4
P3: Interpret and assess relevant data and statistics to illustrate how micro and small
businesses impact on the economy..............................................................................................4
P4: Explain the importance of small businesses and business start-ups to the growth of the
social economy.............................................................................................................................4
M2: Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics.............................................................................................4
TASK 3............................................................................................................................................4
P5: Determine the characteristic traits and skills of successful entrepreneurs that differentiate
them from other business managers.............................................................................................4
P6: Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation
and mindset..................................................................................................................................4
M3: Explore and examine different lines of argument relating to entrepreneurial
characteristics...............................................................................................................................4
TASK 4............................................................................................................................................5
P7: Examine, using relevant examples, how background and experience can hinder or foster
entrepreneurship...........................................................................................................................5
M4: Analyse the link between entrepreneurial characteristics and the influence of personal
background and experience to specific successful entrepreneurs................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Entrepreneurs are the persons who with the use of their creativity and innovation invent
or generate new idea. They try their level best to convert that idea into idea into reality for
satisfying the needs and wants of the society along with a motive to earn money. They are said as
the backbone for the economy as they helps into the growth of economy by generating more
employment, raising the standards for people through innovations, bringing technology
development and much more. The scale of such business is generally small and medium but they
still prove to be a great help for the economy. The report discuss about various types of ventures
and the typologies of these entrepreneurial ventures. The report also includes the similarities and
difference between various types of entrepreneurial ventures (Acs and et. al., 2012).
Interpretation of statistics is also included into the report which shows the impact of micro and
small business on the nation’s economy. Furthermore, this report also discusses the importance
of these small businesses and business start-ups for the growth of economy. The characteristics,
traits and skills of a entrepreneur is also been included into the report. At last the report covers
how an entrepreneur background, behavior, attitude and all contributes in becoming a person
who they are today.
TASK 1
P1 Different types of entrepreneurial ventures and typology of entrepreneurship.
Entrepreneurs are the people who are liable for framing new business firms for providing their
items and administrations to the clients consequently of cash. Entrepreneurial ventures are
the organisations which are set up by the entrepreneurs so they can procure cash and benefit
for carrying on with their life serenely. These endeavours have their own motivation for
which they are shaped by business visionaries. There are different kind of innovative
endeavours which are divided based on their administrations, size, degree and reason.
Entrepreneurial Activity
Entrepreneurial activity alludes to the procedure of organisations wherein the organisations
produce their incentive by making monetary exercises. These exercises are related with
investigation of new and exceptional thoughts which can upgrade the development and
improvement of the endeavour. These novel thoughts are changed over to reality so as to give the
items and services to the clients through their business (Acs, Autio and Szerb, 2014). These
thoughts for upgrading the work open doors for neighbourhood individuals of the nation in
which the business is working.
Types of ventures

Small Business - These sorts of ventures has gigantic measure of representatives, capital, size
and activities. These kinds of ventures are shaped for acquiring benefit consequently of items
and services which are given by the firm. The size and extent of these ventures is thin as they are
working at little scope and gives their items and services to special markets. These business are
shaped by utilizing the associations and sole ownership. The reason for improvement of these
business is to procure benefit and vocation. These organizations has under 50 representatives
with total assets of €2 million (Baum, Frese and Baron eds., 2014). A few models incorporate
Orion electrotech restricted, Clarasys and so on which are private area based firms and
Travelodge which exist in open part.
Large Company - These undertakings works at an enormous level because of which they
have no restrictions in their activities, size, scope number of representatives and so forth.
Such firms gives their items and services at immense level to the clients. These associations
additionally grow their business activities at worldwide level. These associations needs
immense measure of cash for working the business easily. These organizations continue in
the market due to having experience of working the business for quite a long while and
capacity to adjust to changes. Example- Tesco, M&S and so forth which are private firms
while organisations, like , NHS is open division firm.
Social Enterprises - These kinds of business are framed with the end goal of
improvement and welfare of society. These organizations grow new thoughts which can be
utilized by the general public for their turn of events and development. These businesses has
huge scope as they give the better chances to neighbourhood individuals with the goal that
they can improve their expectation for everyday comforts. Such organizations are not
centered around gaining benefit. These give a significant commitment to the improvement of
economy anyway these runs locally. A few examples incorporate, Save the youngsters etc.
Characteristics of Entrepreneurship
Entrepreneurial ventures involve various characteristics which are associated with the
growth and development of business to make the business relevant. Some characteristics are
as follows:
Lifestyle Enterprise - These sorts of ventures are shaped for improving the expectation for
everyday comforts of the local individuals of a spot in which the organization is working the
business (Bosma and et. al., 2012). These organizations provide openings of work to the
localities just as their items and services to the individuals of that place.
Growth Firms - These sorts of organizations are framed for acquiring the most extreme
benefit and income. The entrepreneurs of such firms attempt to enhance new ideas through

which the efficiency and productivity of the firm can improve in the market. These ideas are
created for fulfilling the necessities and prerequisites of their clients so as to get improved
outcomes from their items and services which are given to the clients. These falls under the
small and large associations.
The typologies and innovative endeavors are interconnected as they gives their most extreme
ventures for improving the way of life and expectation for everyday comforts of the
individuals. Additionally these both gives their conceivable commitment in the turn of
events and development of the economy wherein the business operations are running.
P2: Explore the similarities and differences between entrepreneurial ventures.
Differences
Basis Small Business Large Company Social
Enterpreneurship
Scale These businesses are
run on small scale and
with a small
investment.
These businesses run
on high scale so they
need huge amount of
money to work
smoothly and well.
These are run at local
levels to satisfy the
need of the localites.
Purpose To earn livelihood to
live life comfortably.
This type of business
need to earn at a huge
level so that they can
continue to work
smoothly.
Main purpose is the
upliftment of local
people.
Characteristics The need for resources
is very low and also
the government
doesn’t interruption is
very low.
These businesses
require a lot of money
and labor to run
smoothly also due high
number of operations
government
involvement is quite
high.
The money is provided
by the government in
this case as they work
for the betterment of
the people.
Similarities
Basis Small business Large company Social
Entrepreneurship
Meeting the needs Meets the needs of Meets the needs of These support the

Basis Small business Large company Social
Entrepreneurship
local customers huge clients locals and try to meet
their needs and
satisfaction
Society Upliftment These gives openings
for work to the
individuals at the
nearby level through
which the
neighbourhood
individuals can live
great life.
These gives the
openings for work to
the individuals just as
innovative products
which can fulfil their
requirements for living
appropriately and
easily.
These offers their
types of assistance to
the individuals to
improve their nature of
expectation for
everyday comforts just
as of the society.
M1: Investigate a diverse range of entrepreneurial ventures to demonstrate an understanding of
entrepreneurship in both the public and corporate sector.
A corporate sector entrepreneurship refers as a business which considers being a part of
the economy and has the motive to earn profit into the business. Corporate sectors are not
controlled or owned by the public sectors, whose basic purpose is to serve the economy not to
earn profits. There is an another types of entrepreneur which is known as intrapreneur.
Intraprenure is an employees hired by corporations who has the task to develop the innovative
and creative product and services for his organization (Bridge and O'Neill, 2012). Research and
development department is included in this as the people in this department has the task to build
new products after conducting proper research for their organization.
TASK 2
P3: Interpret and assess relevant data and statistics to illustrate how micro and small businesses
impact on the economy.
A business organisation has maximum contribution to the country’s growth so that it can
develop its infrastructure, schools etc. Micro and small business organisations impact the
economy of a country significantly. There are three types:
Small: Employing less than 50 employees and having revenue of less than
£5million,these firms have a low scale of impact on economy. They generate more revenue and
employment for the country but at low scale.

Medium: Employment ranging from 50 to 250 workers, such businesses have the revenue
between£5m and £22m. They impact the economic development by churning out high number of
employment requirements as well as good customer services.
Large: Having employees more than 250, and revenue of more than £22m,such firms
heavily contribute to economy by providing jobs to more people due to their demands in
operations nationallyand internationally (Burns, 2016).
Impact of SME on economy
Local impact: Micro and small business firms directly affect the local economy by
providing their products and services to the local people. A thorough local demand analysis is
required. It helps businesses to determine their purchasing power and profit estimates. These
businesses also provide job opportunities to people so that they can improving their living
standard and lifestyle which will, in turn, again, assist in the development of local economy in a
manner of feedback.
(Source: The Role of Startups and Small Businesses in Today’s Economy, 2018)
Regional impact:Like at a local level, SME impacts the regional economy too by
providing job opportunities to regional people. Higher number of employments allows these
businesses to expand their operations also. This also improves the regional per capita income
which can be used for development purpose.
Illustration 1: Role of Start-ups and Small Businesses

National impact: SME impacts the economy at national level as they perform their
business operations by using less money (Frese and Gielnik, 2014). These also focus on
innovative ideas in order to enhance the profitability and productivity of the company. Increased
profit,in turn, assists the country in enhancing GDP. SME in the UK employs more than 15.7
million people which affects their economy positively.
P4: Explain the importance of small businesses and business start-ups to the growth of the social
economy.
Small businesses and start-upstogether provide a huge number of revenue and
employment opportunities to the country. Hence, they are a crucial part of the economy. The
revenue helps the nation, whereas employment aids in improving individual lifestyles. Many
small firms are operating in the UK that are positively impacting the social economy. There is a
boom in the number of start-ups and small firms. These firms are brainchildren of entrepreneurs
to meet the ever-increasing demands of customers. Also, the UK government supports these
firms so that these small businesses can give their maximum in the development of country.
These firms are very important for the growth of economy for reasons discussed below:
Job generation: Both the small businesses as well as start-ups play major role in
generating employment opportunities which assists the company and the qualified work-force
alike.Jobs provided by these firms help the local people to improve their existing skills and
capabilities. Through these improved skills, individuals can learn and hope to venture into
businesses of their own (Fayolle, 2018). These are important for eliminating the unemployment
in country which will improve the economic condition.
Improved living standard of people: These entrepreneurs bring innovative products and
services into the market which advances the living of people. Because through innovative
products or services the work of a person gets easier and there living standards gets increases
automatically.
M2: Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics.
Basis Small scale Medium scale Large business
Capital The capital they
employee in the
economy is
comparatively very
small.
The capital very
employee is more
than the capital of
small scale businesses
but less than large
scale business.
The capital they
employee is very
huge.

Employment They give
employment
opportunities to 1-50
employees
They give
employment to around
some 100 employees
They are the major
employer for the
economy as they hire
around thousands of
employees.
Taxes The taxes given by the
small scale industries
are very low.
The tax given by
medium scale
industries are greater
than small industries
but lesser than large
scale industries.
The tax given by these
industries are very
huge as they earns
profits in huge
amounts.
TASK 3
P5: Determine the characteristic traits and skills of successful entrepreneurs that differentiate
them from other business managers.
To differentiate successful business from others just focus on their traits,
characteristics and skill sets. To generate new creative innovative ideas these skills sets, traits
and characteristics plays very important role in entrepreneur’s life which can assist the
organization in improving the profitability and quality. Two entrepreneurs are selected for this
report which are Elizabeth Gooch of EG Solutions PLC and Tom Mercer of MOMA Foods
whose characteristic, skills and traits are discussed below:
Characteristic
Passion: It is essential characteristics to achieve your biggest goal in life. A zeal to work hard for
days month’s year to accomplish your aim. Passion comes with determination and it is the
energy with helps you in your low days. Both Elizabeth Gooch and Tom mercer should have this
energy of passion to succeed in there innovative ideas (Drucker, 2014). Passion helps person to
remain cool and calm in their decision making while others business manager take wrong
decisions in there low energy and wrong mindsets. Self-belief and hard work: Without self believe no one can take single step in their life to
follow your dreams one should believe in their dreams. Confidence comes with self believe and
to work effective one should believe in their hard work and ideas. This characteristics will assist
both entrepreneurs Elizabeth gooch and tom mercer on their self believe to take effective
decisions for their firms and progress there each decision towards growth of their organization.
One can easily differentiate self believe of managers on their quick decisions in pressurize
situation. If someone takes time he is lacking in his decisions does not have much self believe.
Skills

Innovative thinking: Every dimensions of entrepreneurships needs innvotive ideas to grow fast
in this world. Markets demands new ways to create demand and this is important skill of every
entrepreneurs to put their ideas. Both Elizabeth and tom mercer have to show their creative
thinking in every aspect like in success or failure (Kerr, Nanda and Rhodes-Kropf, 2014). Firms
can be stuck in any situation entrepreneurs should have varieties of ideas to put and accomplish
their task Leadership: Leadership is an action not position. A leader should gain trust of everyone
in their firms. Should know strength and weakness of his team and first one to motivate everyone
in every situation to bring best out of them. Leader always takes failure on his shoulders and
success he gives to his team mates never take credits. Both Elizabeth and tom mercer should
have initiative skills to be a leader. They both should have positive approach in every situation
and always have others plan when one gets cancels. A leadership skill differentiate leaders from
other people by bringing best from his employee with minimum hard work.
Traits
Confident: It’s the most basic and important skill for every entrepreneurs. Confidence comes
with self believe. One should have confidence in his skills and innovative ideas and to full fill his
aim he should have confidence in his decision making. Both Elizabeth and tom mercer should
show some confidence by their work and decisions (Kirzner, 2015). This trait will differentiate
them as manager by their decision and team handling skill which come with confidence
 Disciplined: Every person becomes discipline in life when he start perusing his dreams.
To achieve anything in this world self-discipline is key to get that. Determination comes when
we follow disciplined life on daily basis. This trait also exist in Elizabeth Gooch and Tom
Mercer due to which they stay focused on their goals without getting distracted from other
things.
P6: Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation and
mindset.
Entrepreneurs have many characteristic, trait and skills which differentiate them from the
other people or managers. These factors also represent the entrepreneurial motivation and
mindset as well. These factors directly impact the motivation and mindset of entrepreneurs due
to which they could not become successful. OCEAN model can be used for reflecting the
entrepreneurial motivation and mind set. This model has 5 aspects as discussed below:
Openness: This is connected with emotions, adventures and ideas. Openness simply
means open to everyone in form of personal and professional talks. Optimistic means adjusting
in every atmosphere which simply means openness in life to deal with problems with a smile on
face. This aspect reflect that the curiosity and creativity is helpful for entrepreneurs in taking the

better and proper decisions for their business. This helps in learning new things and handling the
challenges.
Conscientiousness: Its mean flexibility and reliability (Koellinger and Roy Thurik,
2012). It focus on a person should invest his time in productive ideas, learning new things rather
than wrong and unproductive activities. Their hard work should help organization in productive
growth.
Extroversion: This means that the entrepreneurs should be energetic, assertive, talkative
and social in order to influence the employees and other persons. By this one can make good
relation with team mates and workers and help organization in good productive atmosphere to
bring best of each one.
Agreeableness: This means a person should be cooperated and trust worthy with other
members of company to generate good outcome to company with good relations. Through this,
they can maintain the trust among the employees which leads to better relations. Through this,
the entrepreneurs can take the suggestions and ideas from workers regarding the working and
improvements.
Neuroticism: This is associated with anxiety, fear, worry, frustration, jealousy and envy
etc. in which entrepreneurs react negatively to random situation. The entrepreneurs should avoid
such elements in order to treat their workers equal (Kuratko, 2016). Through avoiding these
elements, entrepreneurs can maintain good and healthy working environment at the workplace.
M3: Explore and examine different lines of argument relating to entrepreneurial characteristics.
It is not always necessary that the entrepreneur has to have an extrovert personality.
There are many entrepreneurs who have the personality which is introvert but they have that
innovative and creative mind to build the things and satisfy the needs to people. Therefore, it is
not always that entrepreneur personality has to be extrovert so that he can influence more and
more people towards his goals. An introvert person can also influence the people by showing his
work and talent before audience. Another characteristics can be of background from which the
person or entrepreneur belongs. It is important to note that the background of an entrepreneur
does not affects his will to become a entrepreneur. It is his hard work and determination which
decides so.

TASK 4
P7: Examine, using relevant examples, how background and experience can hinder or foster
entrepreneurship.
An entrepreneur background and experience do help in shaping for future for hindering
the future of an entrepreneur. An entrepreneur past experiences, his education, his family, friends
or peer group does play an important role in these. Some of these role also helps the Elizabeth
Gooch and Tom Mercer in become the person who they are today.
Elizabeth Gooch
Background: She started her career by working in a bank name, HSBC when she was 18. After
a year, she resigns from that place and started working with a firm which has a business of
consultancy. Soon after she left that too and grabs some money from that job. She than took loan
from his friends and relatives and collected around 1000 Euro to start his own company. From
that company, she provided consultancy work along with training services to the other
companies regarding their operational management (Landström, Harirchi and Åström, 2012).
But for carrying out that work she lacks that skills and required knowledge. So she decided to
change the business and got into software services. She made Rodney Baker- bates his CEO for
the company for raising the investments and in which she gets successful too.
Experience : When she started her business, she faced numerous problem and issues from all
sides and aspects. She was lack of money, confidence, resources and etc. But somehow she
managed to handle all these and tries to get over it. Later, his CEO provided her with many ideas
from which he can raised money and did get successful in it. Though the company did faced loss
in year 2007 and 2008 but somehow she also managed to bring the company back on the track.
Tom Mercer
Background and experience : He has did his graduate from Cambridge University. Tom had
gained experience by working at several places. He first worked as a management consultant in
Bain and co. , London. In his work he always used to find out about the different ways from
which he can perform or improve his work. He later came up with idea of starting a business of
blending health drinks which also includes oats and smoothies. Slowly but steadily his business
gained growth and he also worked very hard for this. At night he himself used to cut the fruits for
shakes or juices, he himself used to serve to the people (Marlow and McAdam, 2013). He also
did many research about the flavor which is most preferred by the people or about the taste and
preferences they have and so on.
M4: Analyse the link between entrepreneurial characteristics and the influence of personal
background and experience to specific successful entrepreneurs.
If a person belong to a family in which all the members are entrepreneurs and have the
personalities of same, then there would be more chances that other member also posses the traits

to become a leader of being a entrepreneur. Because he may has that genes in him and caliber to
carry all the characteristics to carry the activities. Background also includes education. A person
education helps him in developing the knowledge and skills in his required field (Martin,
McNally and Kay, 2013). By gaining the same he acquire the ability to help other or teach others
into the field in which he can gained specialization. With the time, by acquiring the
specialization, he can build something from this knowledge which can help him in becoming a
entrepreneur.
CONCLUSION
From the report discuss above, the importance of entrepreneurs has been discusses. The
entrepreneurs helps in increasing the income for society, generates employment, develop the
technology and brings advancements into the economy and many more. The report also includes
the characteristics which an entrepreneur must have, some of these includes, risk takers,
innovative, confident, transparent, intelligent, managerial skills and the so forth. Apart from this
the report also includes the difference between small, medium and large enterprises and major
basis.

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