Entrepreneurship and Small Business Management: Impact on Economy and Characteristics of Successful Entrepreneurs

This report discusses the impact of entrepreneurship and small businesses on the economy of UK. It also examines the characteristics, traits, skills, and motivation drivers of successful entrepreneurs. The report covers different kinds of entrepreneurial ventures, their relation to the typology of entrepreneurship, and the ways in which small businesses impact different levels of the economy.

Entrepreneurship and Small Business
Management
CONTENTS

INTRODUCTION .....................................................................................................................................4
PART– A.................................................................................................................................................4
Different kinds of entrepreneurial ventures and their relation to the typology of entrepreneurship
...........................................................................................................................................................4
Likenesses and dissimilarities amid varied kinds of entrepreneurship .............................................5
Entrepreneurial ventures for demonstrating a comprehension of entrepreneurship in both public
and corporate sector.........................................................................................................................5
Scope, development and growth of entrepreneurial ventures..........................................................6
Assessing pertinent information & statistics for illustrating the ways micro and small businesses
impact on the economy.....................................................................................................................6
Significance of small business and business start-ups to the growth of the social economy.............7
Differences made by small, medium and large businesses to the economy of UK ...........................8
Ways in which small businesses impacts different levels of the economy that is local, regional,
national and international context....................................................................................................8
PART – B................................................................................................................................................9
Examining the characteristic, trait, skills, and motivation driver of successful entrepreneur............9
Assessing how entrepreneurial personality reflects motivation and mind-set ...............................10
Analysing impact of background and experience in hindering or fostering entrepreneurship .......11
CONCLUSION ......................................................................................................................................13
REFERENCES ........................................................................................................................................14

TABLE OF FIGURES
Figure 1: Type of micro and small businesses in UK............................................................................7

INTRODUCTION
Talking in relation with entrepreneurship, it is a manner of establishing a business
through taking into account varied kinds of risks and issues concerning to management or
economical. Further, the entrepreneurial ventures might have varied ownership structures and
entrepreneurs must have certain skillset and features for evolving the business to new heights.
Understanding, knowledge, skillset and personal backdrop do have varied influence on
entrepreneurship which can helps in fostering or hindering the growth of an organization
(Storey, 2016). The present research report will be going to throw light on varied kinds of
entrepreneurial ventures, their impact on the economy. Other than this, the skills along with
the mind-set required for establishing the business will also be elaborated in this research
work. The final section of the report will analyse the manners in which experience and the
personal background can influence the start-up business.
PART– A
As a Junior Business Executive for the Department for Business, Energy and
Industrial Strategy, a UK Government Department, the main aim of this section is to produce
a report for carrying out a seminar for helping the business to innovate and grow. This
seminar has been attended by three small and medium enterprises of UK such as EG
solutions, Carwow and the Ginger Pig.
Different kinds of entrepreneurial ventures and their relation to the typology of
entrepreneurship Small business entrepreneurship – Such kind of start-up business can be conducted by
the owners and the amount of workers are not so high. Further, the profits of such
firms are not much and these firms emphasize on approaching new customers and
evolution of their merchandise and administrations (Dees, 2017). Small business
entrepreneurship are being carried out with family members, partners or with friends.
Nonetheless, these type of business offer innovative products and achieve success
effectively. Scalable start-up entrepreneurship – Talking about this kind of business, it initiate
with creative notion and emphasize on offering creative merchandise and
administrations from the very beginning. Such entrepreneurs are of the belief that
their notion can later the whole globe and they seek for investment from venture
capitalists.
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 Large company entrepreneurship – Such kind of organization’s life cycle is finite and
they pay attention on offering novel products to the clients for durability and
permanency of their business. Because of the altering demand of the clients,
regulations, competition and trends with the passage of time, large firms adopts
disruptive innovation and generate novel products for completely new-fangled market
(Bridge and O'Neill, 2015).
 Social entrepreneurship – Such kind of social entrepreneurship emphasize on solving
varied social issues through delivering their services as well as products. Such firms
pays attention on generation of an enhanced world for the human beings and can be
any type such as non-profit, profit and hybrid.
Likenesses and dissimilarities amid varied kinds of entrepreneurship
Different types of
entrepreneurship
Similarities Differences
Small business
entrepreneurship
The main aim of such kind of
business is to earn income,
augment profitability and gaining
attention of the customers
Market control is very limited
and have to gain needed funds
(Schaper and et.al, 2014). The
profit margin of such business is
also very low
Scalable
entrepreneurship
The main aim of such kind of
business is to earn income and
augment the satisfaction level of
the customers (Barba-Sánchez and
Atienza-Sahuquillo, 2015)
Such type of business takes
money from friends and family
and make investment from that
which is too risky
Large
entrepreneurship
Essential revenue gaining is the
sole motive and emphasize on
satisfaction of the customers
This kind of business has wide
expansion in the marketplace
and through using latest
technology, they also reach the
global market
Social
entrepreneurship
With the main aim to make the
whole world an enhanced place to
live, the sole aim of such
organizations is to offer quality
services and products and gain
They main motive of such
entrepreneurship is to gain
income and through that they
offer support to the people of
the society
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large donation so that it can be
used for welfare of the people
Entrepreneurial ventures for demonstrating a comprehension of entrepreneurship in both
public and corporate sector In public sector – Such firms are being governed by the government whether
indirectly or directly. Major investments on these firms are being done by government
and varied private firms also offer strategic support to them. They are set-up in
assortment of sectors with an objective to offer quality goods to the clients. They are
majorly not inclined towards higher profit margins instead they emphasize on welfare
of society.
 In corporate sector – Such firms functions privately and the owner could be an
individual or public. They cultivate marketing strategies for offering quality goods to
the clients for enhancing their level of profit margins and durability in the market.
There are numerous large and scalable organizations which are related with corporate
sectors that pays attention on sustainable development through emphasizing on their
rivalries along with devising strategies for gaining an edge in the market
(Hechavarria, Renko and Matthews, 2017).
Scope, development and growth of entrepreneurial ventures
Objective, vision and mission of diverse entrepreneurial ventures are quite diverse
which can impact the scope of these firms as well. If these firms can cultivate a product
which satisfies the needs of the clients then they can retain in the market for long period of
time with higher amount of profits. It is crucial that these ventures must emphasize on
evolution through availing investment as well as must make planning for improving their
goods and facilities as per the present demand and tendencies. Furthermore, those are also
required to improve structures of their organization which can further augment their
communication with varied subdivisions for running their day to day operations. Moreover,
the growth as well as success of diverse ventures are majorly relied on the quality of goods
and facilities being offered by them and the manner in which they are meeting out the needs
of the clients and sustainable and pricing strategies adopted by them (Storey, 2016).
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Assessing pertinent information & statistics for illustrating the ways micro and small
businesses impact on the economy
In each and every industry, highly contributing business towards the economy of the
nation is being captured by small business. The amount of micro as well as small businesses
are augmenting at the higher pace with the passage of time which in turn is generating
income through offering varied goods and facilities to the clients. Talking in relation with
United Kingdom, there quantity of small businesses operating in the market are quite high in
diverse industry. Further, there are around 4.5 million small and medium enterprise which are
set-up across the country, this is approximately ninety nine percent of all the industries in the
nation (Bridge and O'Neill, 2015). Consequently, the income being accrued from these small
and medium enterprise have higher amount of contribution towards the gross domestic
product of United Kingdom. Surrounded by all the businesses there are almost ninety six
percent being regarded as the micro business which gives employment opportunities to only 0
to 9 employees and this becomes near about thirty three percent of the total employment and
twenty two percent of the overall turnover.
Figure 1: Type of micro and small businesses in UK
(Burns, 2016).
In addition to this, the micro as well as small business might be grouped as exporter,
non-exporter, innovator and non-innovator. All these enterprises are generating income with
or without innovation and some of them exports goods to other nations and receive foreign
currencies which again considered as a good contribution towards the economy of the nation.
The above figure is explaining different kinds of micro and small businesses which exists in
UK and making an important contribution towards the gross domestic product of the country.
Significance of small business and business start-ups to the growth of the social economy
Focusing on the social economy, it is being referred by the accumulation of social
objectives of different organizations that make them up. For the purpose of maintaining the
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growth of the social economy, there is a high impact of start-up and small businesses on
diverse nations. As per the European commission, social organizations are being grouped as
mutual organizations, foundations, voluntary firms and cooperatives (Dennis, 2019). The co-
operative sector is still controlled by the consumer cooperative with their roots. Further, the
turnover of this sector is over £33.2 billion. Additionally, the Cooperatives of UK is the
major federal body for the sector in which there are around 12.8 million members and giving
employment opportunities of around 236,000 jobs in the UK co-operative sector.
Furthermore in relation with the mutual organizations, after the financial deregulation there
has been a wave of demutualisation in which many mutual building societies converted into
banks and listed in exchange (The Social Economy in the UK, 2021). They all have important
contribution towards the economy of UK. Other than this, the voluntary organizations also
has an important role in the economy, as this sector makes contribution of around 12.3
percent to the nation’s economy. In comparison with the other developed nations of the
Europe, the voluntary sector of UK is smaller than average, however it is above average
when is compared to the other nation of the world. There are numerous start-ups which are
not in a position to offer high salaries to the workers because of insufficient capital and also
hire people with lesser skillset which in turn is again useful in reducing unemployment issue
(Gorgievski, Ascalon and Stephan, 2016). Through this procedure, these firms offer
education to the people living in the rural areas and this education can be used as a base for
getting future work for boosting the growth of the economy. In UK, there are high amount of
small and start-up business being set-up which contributes quite high towards the gross
domestic product of the nation.
Differences made by small, medium and large businesses to the economy of UK
In comparison with the large organizations, the amount of small and medium
enterprise are quite high in UK. Of every industry, small and medium enterprise have
captured a larger part and are also contributing high towards the nation’s economy.
Nonetheless, businesses which are large in size earns higher income individually through
offering quality goods and facilities and because of their greater value of brand in the market.
In UK, there are different large corporations which have their set-up in diverse nations and
this is beneficial in generating foreign income. Additionally, large organizations involves
diverse kinds of operational activities and gives employment to large group of people in
comparison with the other businesses. Other than this, large businesses also expend high
amount towards CSR activities. On the other hand, the small and medium enterprise
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emphasize on offering creative goods to the clients for gaining consideration as well as
heightening of the growth of business (Parker, Congregado and Golpe, 2019). Moreover, this
small and medium industry are also engaged in exports and gives employment to higher
people in UK which further supports in decreasing the levels of unemployment.
Ways in which small businesses impacts different levels of the economy that is local,
regional, national and international context
Speaking volume in relation with the impact of small businesses on the nation’s
economy, it has diverse impacts at diverse levels. According to Drucker (2014), at the local
and region level, these small firms can give competition to similar kind of businesses through
offering quality goods and facilities which can satisfy the requirements of the customer
effectually. Those firms pays attention of offering employment to people with lesser skillset
on lesser salaries because of insufficient capital. This provides help in decreasing
unemployment. However, they also faces challenges related to lack of funds, time and
ineffective online presence. Furthermore, as per Kirzner (2015) when throwing light at the
national level, small and medium firms can expand to varied zones of a nation and generate
more amount of income which allows them to offer higher business taxes that supports the
national economic development (Baum, Frese and Baron, 2014). Nonetheless, there are many
challenges being faced by small businesses art this level such as inadequate infrastructure and
lack of sufficient capital. On the other hand, in relation with the international context, these
small and medium enterprise engages in exports of their goods and facilities and they also
have established their branches in varied nations which in turn is beneficial in earning foreign
income or currency. This importantly contributes in the nation’s growth and development.
Small businesses also faces several issues at the international level related to foreign rules,
regulations, company structure, current rates and payments methods.
PART – B
Examining the characteristic, trait, skills, and motivation driver of successful entrepreneur
For being successful entrepreneur it is very important to have certain traits so that the
entire business task is carried out smoothly without facing many problems. Also below is the
list of the certain traits of skills that is required to have in any individual
Communication skills: It is very important skill that is required to have in any entrepreneur
as it allows in keeping certain opinions among the workers that is essential for the growth of
the business (Malecki, 2018). Also, communication allows the individual to attract new
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customers for the business so that more revenues might be generated in the future. Moreover,
Communication allows businessman to address all different stakeholder group associated
with the Carwow that include suppliers, traders and all others. Also, role of communication is
essential in communicating with the various stakeholder group of the business house.
Decision making: As Carwow is involved in providing common platform to all the buyers
and sellers of cars it is very important that proper and timely decisions are been made so that
future losses have not to be inquired on larger extent. Also, the overall growth and success of
any business entity is highly influenced with the quality of decision that is taken by the
management (Nambisan, Siegel and Kenney, 2018). Thus, if decision making of Carwow
manager is weak than it would only create difficulties in achieving the future targets.
Leadership skills: It is essential that entrepreneurs have the ability to handle diverse group
of people in right manner so that all the workers are able to complete the task on given
deadline. Also, through this skill chances of conflicts are also very less in the business and
the firm would be able to retain best talents within the firm.
Apart from the above skills James hind of Carwow have some basic characteristic
such as it he is ready to take certain challenges and risk so that greater benefits are might be
achieved in due course of time. Also, remaining positive is another characteristic that is very
essential so that team work and coordination is maintained even during certain challenging
times and this trait was perfectly existing in the Tim Wilson founder of ginger pig where the
idea of selling delicious toppings and food idea came from the remains of unsold meat
(Sahut, Iandoli and Teulon, 2021). Also, another trait of successful entrepreneurs is of
creative thinking that allows them to grab better opportunities that are available in the
market. For example: Elizabeth Ann Gooch of EG solutions in UK is now specialised and
successful in designing all back office operations for various global companies.
Moreover, it is seen that motivation is also very important aspect as it allows the find
individual to work harder towards achieving the success. Also, it could be linked through MC
Cleland theory of motivation where motivation of person is derived from three factors such
as need for achievement, need for power and affiliation. Thus, based on these needs it works
accordingly to achieve each level of success (Shakeel, Yaokuang and Gohar, 2020). Also,
other drivers might be freedom, independence and self-reliance that allow them to achieve
goals than in comparison to business managers that works mainly for earning wages and
avoid risks for the business.
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Assessing how entrepreneurial personality reflects motivation and mind-set
Personality is the combination of characteristics’ that forms any individual character.
Also, it is seen that only those individuals would be able to become successful entrepreneurs
that have the personality of having the positive mental attitude towards achieving certain
things in life (Khaled, 2020). Moreover, it can be seen as in case of James Hind where he
first thought of building car selling website through seeing a blog in bedroom and now is
running multinational business. Furthermore, based on the different personalities the
individual entrepreneur is dedicated towards achieving certain goals. For instance the one
that wants to earn money will work for increasing financial position of the company while
the individual that is more concern in making brand image in the market will hire qualified
workforce and for achieving various short, long and medium term goals for the organisation.
Also, personality aspect would be well understood through Bielard, Biehl and Kaiser five-
way model (BB& K five way model) that is based on categorizing the individuals under five
heads such as:
Individualists: These individuals are very confident and careful persons. Moreover
they are less dependent and hence all the investments decisions are taken independently.
Adventurers: Under this category entrepreneurs personality is of quite focused
person that are ready to take challenging tasks and risks in their lives. Also, they are active in
carrying out diverse activities for their won development in future.
Celebrity: This type of personality makes decisions and follows according to the
trends and has no expertise in any type of future investments (Sozuer, Altuntas and
Semercioz, 2017). Thus they approach other third party for any of the future decisions to
make accurate and reliable decisions.
Guardians: Personality of these types of individuals is regarded as anxious and
careful personalities because of lack of confidence (Bielard, Biehl and Kaiser five-way
model, 2022). Moreover, they make careful choices regarding the investment so that there are
no future losses.
Straight arrow: Individual under this head of personality is in between of anxiety
and confidence and thus is extreme careful so that things are done without proper thoughts.
Thus personality and motivation are interlinked with each other and all the future
decisions are highly influences because of these two aspects. Also, it can be said that
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personality is strongly influenced by the motivation as it can be seen in differences in policies
and rewards systems in various firms. Moreover, individuals also mould the personality
according to the environment in which he/she is working. For instance: One that wants to
earn higher rewards would motivate to take challenging tasks for the firm even if he is having
no risk taker personality (Vodă and Florea, 2019). Thus, this is due to the fact that it needs to
fulfil certain aspirations because of which it adopts itself according to the current
environment. Furthermore, it can be said that motivation is only element that allows
entrepreneurs to make certain changes in their existing personalities while handling large
number of diverse group of people so that personal goals are achieved in systematic manner.
Analysing impact of background and experience in hindering or fostering entrepreneurship
Background also plays very important role that help any individual to become
successful entrepreneur in the future. Moreover, one of the reasons of successful
entrepreneurship is that family background of the person was quite supportive in allowing to
take certain decisions in life in great manner that later allowed the person in achieving
positive results in future (Welter, Baker and Wirsching, 2019). For example: : Jeff Bezos -
Amazon that had earlier work in various companies and finally decided to start up its own
business through opening online store for books from its own living place along with his few
friends that developed the software for the website. Thus, in the early times Jeff bezoz had
strong network of people that has allowed making the idea actually in the bsuiness. Also, the
founder has struggled lot in earlier times but having the striong leadership , critical thinking
and pasison for innovation had led to the success of amazon. Furthermore, making the value
of bsuiness was only due to the fact that his family belived taht he would be able to achive
his goals inspite of its hard times. However, sometimes there are cases where due to the
background the individual is not able to become good entrepreneur in early stages.
For instance financial crisis within the family does not allow the person to fulfil
certain wish or need for himself and there is lack of availability of resources. For example:
Jan Koum the founder of what’s app worked as janitor and was collecting food stamps
before launching this type of business. Another example is of Tim Wilson of gingerpig that
came from farming background and now with its innovative mind is able to run successful
business in London (Hachana, Berraies and Ftiti, 2018). Thus, this person was successful
only because of creative plans and developing goods and services according to the current
needs and demands of the customer. In spite of the different types of backgrounds the
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individuals that have good management skills and have clarity in their goals are able to
achieve goals in well-defined manner.
Similarly, experience can be gathered by various entrepreneurs once they have started
their business to create positive impact in the future. In-spite of not holding any higher
management business degree the entrepreneur can take ideas from other businessperson that
are working successfully in that industry so that business structure can be made and modified
accordingly (Julien, 2018). For instance the James hind of Carwow that came from well
family status had the vision of helping people to choose from best cars in the market.
Moreover, he used all saving and cost of his parent to build a website that would serve this
purpose and states that Zoopla is his inspiration as entrepreneur. However experienced
individuals have positive impact and greater chances of grabbing better opportunities in the
future as markets are already known and better visions are developed in early age. For
instance: Microsoft owner Bill gates did not complete the degree at Harvard University and
worked at different posts in various companies to fulfil his vision for technology. However,
experience sometime might negatively affects and not works in favour of entrepreneurs due
to improper market research to any other factors (Kerr, Kerr and Xu, 2017). For instance:
Reid Hoffman that earlier created Social Net online dating app that did not work and failed
and later good results achieved through creating another pass like LinkedIn , PayPal and
Airbnb. Hence, both families and experiences might create positive and negative impact on
the entrepreneur depending upon the situation and the idea that it wants to convert into action.
CONCLUSION
Thus, from the evaluation being done above it can be established that it is the
entrepreneur who set-up their own business with a view to satisfy the requirements of the
clients. Based on the mission and vision, each and every business is established and also
involves high risks depending upon its scale and size. There are different types of start-up
business being explained above, however the once which contributes maximum towards the
economy is small and medium enterprise. Other than this, the report has significantly defined
traits and features a successful entrepreneur encompassing their personalities as well.
Moreover, the report has also carried out the association amid rewards as well as risks.
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REFERENCES
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business. Palgrave Macmillan.
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Vodă, A. I. and Florea, N., 2019. Impact of personality traits and entrepreneurship education
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