This report covers different types of entrepreneurial ventures, their similarities and differences, impact of small businesses on the economy, importance of startups and small businesses to the growth of social economy, skills of entrepreneurs compared to managers, and more.
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Entrepreneurship and Small Business Management
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Table of Contents INTRODUCTION...........................................................................................................................3 MAIN BODY...................................................................................................................................3 Examine different types of entrepreneurial ventures and explain how they relate to the typology of entrepreneurship..................................................................................................3 Explore the differences and similarities of different entrepreneurial ventures......................4 Interpret and assess relevant data explaining how small businesses impact the economy....5 Explain the importance of startups and small businesses to the growth of social economy. .6 Determine the skills an entrepreneur has in comparison to other business managers............8 Assess how aspects of entrepreneurial personality reflect mindset and motivation..............9 Examine using relevant examples how background and experience can hinder or foster entrepreneurship...................................................................................................................11 CONCLUSION..............................................................................................................................12 REFERENCES..............................................................................................................................13
INTRODUCTION Entrepreneurship is an inescapable lively occupation chased by those individuals who are lucky enough to take risks. These people are positive towards believing in themselves and are conscious about the upcoming barriers. They are obstinate enough to keep putting efforts and are brave to take chances again and again. Establishing a business is not about just having an idea, it is about having ability to question, the capability to believe and spirit to move forward(Hosseini, 2019). This report explains different types of entrepreneurial ventures as well as their similarities and dissimilarities. What positive impacts small-firms and start-ups have caused on economy of the UK are also covered. The next section of this report focuses on the difference between an entrepreneur and a manager. By taking two entrepreneur personalities Peter Johns and Richard Branson, it has been explained that how their background and experience made them the world famous personalities. MAIN BODY Examine different types of entrepreneurial ventures and explain how they relate to the typology of entrepreneurship Different individuals have various innovative ideas of establishing their businesses which distinguish entrepreneurial ventures in further categories which are discussed below: Small Businesses These companiesoperate on domestic level by those peoplewho want to support their family.Local bakery, grocery store and beauty salons are some examples. Large Businesses These firms target a large customer base and run their franchises on national as well as international level. Microsoft, Amazon and Google are part of these businesses. Social Businesses The main purpose of these organisations is to create solutions that could bring change in society. These changes might be environmental, human rights or any other problems related to society(Boudreaux, 2020). Non-profit organisations like Oxfam in UK is an example for the same. Scalable Entrepreneurship
Entrepreneur setting businesses with new and advanced ideas comes under this category of entrepreneurial ventures. Twitter, Facebook and Instagram are some examples. Typology of Entrepreneurship Survival Entrepreneur: People whose main objective is to hold up in market for long time and solve financial ventures obligations are known as survival entrepreneurs. Small-firms and start-ups might be viewed as these types of companies. Lifestyle Entrepreneur: The main purpose of these business persons is to maintain their expensive lifestyle . Social media influencers, V-loggers comes under this category of entrepreneurs. Dynamic Entrepreneur: Individuals who brings imaginative and innovative ideas in the market to increase competition are believed to be dynamic entrepreneurs(Igwe and Icha-Ituma, 2020). Business celebrities like Mark Zuckerberg, Oprah Winfrey are some examples. Explore the differences and similarities of different entrepreneurial ventures Differententrepreneurialventuressharesomesimilaritiesandalso havesomenoticeable differences which are discussed below: BasisSmall Entrepreneurship Large Business Entrepreneurship Social Entrepreneurship Scalable Entrepreneurship AimThis entrepreneurship aims at supporting theirfamiliesand theirfinancial situation.This limittheirscope and eventually they remaininmarket for short duration. This entrepreneurship aimstoextract maximum profit as possiblesothat theycanusethis marginforfuture expansion to stay in marketplacefor longduration The major aim is todeliverbetter productand services in society sothattheycan helptoimprove standardofliving of people. The mainaimof these entrepreneurship is to maximize their profit by providing unique idea.
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(Roundy, 2017). Natureof employees Theyingeneral hire people who are localasthey operateinsmall markets. Theyhire employeeswhich haveskillsand talentthatthe business need. Theygather volunteersinstead of paid employees who are willing to makepositive changes in society. Theyhireskilled employeesand givetrainingso that they can help inearningprofit for organisation. The similarities are- Dedication:This is a feature that is same in almost all businesses and is required for growthandsustainability.Alltypeofentrepreneursarededicatedtotheir responsibilities and job roles.SeekOutcomes:Allentrepreneursseekoutcomeslikereturnofinvestment, achievements in social platform etc. according to their nature. Face Challenges:All of them also face challenges that are prevailing in market and build strategies based on assessing these challenges(Shahverdi, Ismail and Qureshi, 2018). Interpret and assess relevant data explaining how small businesses impact the economy Small-firms and start-ups have contributed a lot in raising economy of UK. In the beginning of 2020, there were almost 5.94 million small-firms which is around 99.3% of overall businesses. The total employment provided by these organisations was approximately 13.3 million and total turnover was estimated to be is around£1.6 trillion. These companies report for three fifths of employment and in private sector of UK they have around half of turnover (UK Small Business Statistics, 2021). There are various reasons these small-firms and start-ups fail even though they contribute in enhancing the economy of country. It has been observed that 23% of these businesses fail due to lack of efficient team. Around 17% fail because they are unable to design a good business model. Almost 19% of them were surpass in competition and approximately 14% ignores customers which results into their failure(Business Startup Statistics UK (2021 Update), 2021).
Large companies also play a major role in contribution of the country's economy. It has been observed that 100 large organisations have shared around £84 billion in tax in the year 2017 and 2018. These large firms have employed almost 2 million citizens who each contributed approximately £12,855 in tax. In value distribution, around 45% are received by government through taxes by these companies, while workers accepted 30% in pay-off and 25% was diffused to providers of capital (Large companies contribute 12 per cent of all UK tax, 2018). Explain the importance of startups and small businesses to the growth of social economy For economic growth of the UK, it is very important to develop small and medium sized companies as they assist in contributing in its economy. In the respective country, majorly all the technology based local shops are operated by SMEs(Omotosho, Gamede and Uleanya, 2020). Furthermore, the government of UK needs to provide some welfare programs in order to support all small and medium sized organizations as these schemes will encourage them to open more businesses in nation. These enterprises are also important for the society as they bring new ideas and creativity which has powerto change aspects of operating businesses such as a company is offering chemical made cosmetics products while some new start-up might offers organic skin care products which will eventually shiftsthecostumers towards natural items.Hence, for country's economic growth both small-firms and start-ups are important. Here are some reasons which explains further importance of these organisation which will enhance the development of economy in UK: Create Employment:One of the main reason for the development of small-firms and start-up is that they create various job opportunitiesto people who are unemployed. It has been observed that in the year 2020, the number of these organisations were approximately 5.94 million which provided employment to almost 16 million people based on their talents and skills.It has also been predicted that in upcoming future, these firms will generate more employment in the country by increasing their number.In recent years, the number of small-firms and start-ups in UK has raised from six lakhs to almost 9 lakh creating more employment possibilities for people. It is very important to support these companies for domestic and social economy as they are helping unemployed individuals in getting jobs and also enhancing country's employment rate (UK Small Business Statistics, 2021).
ï‚·Motivating creativeness:It has been observed that small-firms and start-ups have the power to give competition to other large firms in the market which encourages every businessto developcreativityand innovationsamongthem.Thiswill ultimately lead to higher competition as these organisations will come up with new products or services which will motivate others to develop creativity in their own company(Ruchkina and et. al., 2017).New innovation in the technology or any other field by various organisations in the market will enhance economy of the country.The developed technologies have assist country in uplifting its place in the world by producing advanced and inventive ideas.Employees of these small-firms and start-ups remain motivated which helps them to give better and efficient outcomes that results into more creativity and innovation. ï‚·React quickly to Market change:It has been discovered that small-firms and start-ups have ability to form and espouse modifications occurred in the market according its demands. These businesses are mostly customer familiarized and develop their products or services according to the research they conduct on their targeted consumer's demands and try to create facilities in order to fulfil their expectations(Sanguino, Barroso and Gochhait, 2018). Small organisations have the capability to adopt changes with great flexibility and advanced ideas. Hence, changesinthemarketplacebringseconomicdevelopmentbyinventingnew technologies or opportunities for market to evolve.As they understand the needs of their targeted customers, theyhave high chance of surviving in the market even in economic downturns. ï‚·Create new market:Small-firms and start-ups have the potential to bring diversity in market by launching new products or services for the customers which results into creating new trends in marketplace. The efforts by these businesses to open new market opportunities help in economic development as new and innovative products or services assist in attracting large customer base. The capability of these organisations to enter in new marketplace requires lot of time and research about the needs of buyers. This also help these firms to improve new skills and knowledge about their field of interest in business. Entering in new market allows these companies to produce advanced products which means consumers have broad
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variety of goods to select from(Boutillier and Ryckelynck,2017). Providing variety of products to their buyers will create competition in prices which will help in economic development as company will generate more revenues. Entrepreneurs are determining new market opportunities for establishing businesses that could open new marketplace. Enhance GDP:Small-firms and start-ups manufacture large number of products or servicesinthecountrywhichresultsintoriseinGDPofcountry.These organisations approximately 25% of overall GDP of UK. The collective annual turnover of small-firms and start-ups was almost £2.0 trillion which is around 52% of all private sector turnover. This represents the major contribution of these companiesinUKandhowtheyarebenefitingthecountryineconomic development. The utilization of new technologies by these firms helps in improving the image of country in the world. They play important role in uplifting the GDP of UK as they provide large number of employment to the people which increases employment rate of country. These firms help in decreasing poverty by improving employment ratio of nation which will eventually assist in better GDP ratio(5 Reasons why UK Small Business are vital for the UK economy, 2018). Support local communities:Small-firms and start-ups operate their businesses on domestic level which makes them close to local communities. Small restaurants or coffee shops allow local people a place to socialise themselves with each other while dress shops and other small stores provide citizens simple access to necessary commodities.Theyalsoprovidejobopportunitiestolocalindividualswhich eventually increases employment.The development of domestic areas helps in improving the image of the country because these organisations are more ethical and close to their culture which motivates them to.This loyalty and commitment of these small-firms and start-ups towards their country assist themto improve its economy as they pay taxes which government utilizesto develop nation more in comparison to other countries in world(Ram, Jones and Villares-Varela, 2017). These companies bring better financial conditions, growth and innovation to outside regions of main cities which allow the equal dispersion of income and wealth.
Determine the skills an entrepreneur has in comparison to other business managers An entrepreneur and a manager have different set of skills, traits and characteristics which are listed below: Skills: Creativity:Entrepreneur possess creativity in all their work whereas managers may lack it because they are supposed to work in a specific and decided manner.Risk taking:An entrepreneur look for alternatives that may increase the chance of earning profit even by taking risks whereas mangers are hired to take decision within an organization that lead to its stability(Boudreaux, 2020). Characteristics: Visionary:Entrepreneurs are future-oriented and have visions that are useful for business growth. On the other hand, managers are committed to do their daily tasks.Motivation:The primary motivation for an entrepreneur is achievement while for a manager motivation lies in power and authority that the person gets by the position in an organization. Traits: Focus:An entrepreneur focuses onexpanding business ideas whereas a manager helps in smooth functioning of daily activity in an organization. Decision making:An entrepreneur’s decision is intuitive as they are instinct based and give priority to inner voice and but a manager consider a lot of things which include financial constraints or employee network etc. making its decision calculative. Management style:For an entrepreneur, it is generally a one man show as he take managing decisions independently whereas a manager takes it as a team work but in both cases they try to take productive decision(Roundy, 2017). Assess how aspects of entrepreneurial personality reflect mindset and motivation Various aspects of external and internal environmental factors shape personality of someone which makes them motivated and unique entrepreneur from others. The Five-Factor Model or OCEAN model is utilize to evaluate personality traits of an individual. The five components are:
(Source: The Big Five or The Five-Factor model of personality, 2018.) Openness: This element shows the intelligence features of a person who is eager to implement new originated and advanced thoughts in the business. Peter Jones has this characteristic in himself as he is always open to new ideasfrom people around him(Shahverdi, Ismail and Qureshi, 2018). Consciousness: This element describes characteristics that an individual possess such as durability, aspiration, dependability, hard-working and thinking. Richard Branson has all these features in himself as he was dedicated and ambitious from childhood to achieve his dream of becoming a business person. Extraversion: This factor describes individual who grasps energy from others is social and outgoing. These type of people enjoy being in social gatherings and have full energy to participate. Agreeableness: People who are humble, patient, loyal, polite and kind represents this feature. This people mix-upeasily with everyone around them. Neuroticism: Illustration1: The Big Five or The Five-Factor model of personality, 2018.
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This element involves personalities who has characteristics such as clumsiness, decency, envy, self-criticism, anxiety and unstableness. Examineusingrelevantexampleshowbackgroundandexperiencecanhinderorfoster entrepreneurship Peter Jones Background: Peter Jones was born on 18thMarch 1996 in Berkshire, England. Despite of financial constraints, his parents wanted to provide him best education and sent him to a private school which he left at the age of eight and spent rest of his school years in state schools. By 21, he got married and has his own house which he has to sell in miserable times and at present, he lives in Beacons field with his second wife and their three children and two children from previous wife (ABOUT PETER JONES, 2021). Experience: In the starting of his career, he earned money from his two main passions that were tennis and business as he himself is a good tennis player.He always wanted to be a businessman and tried various ventures which include manufacturing PC's, cocktail bar which eventually undergo a series of losses. But this did not let him to stop, he took failure as an opportunity and again started working at Siemens Nixdorf, a computer company and when financial situation became stable he founded telecom business in 1998 which boom in just two years. In the first year 'Phones International Group' gain a margin of 14 million pounds which shoot up to 44 million in next year and eventually became 13thfastest growing company according to Sunday Times. He also runs an academy called 'Peter Jones Enterprise Academy' where he moulds young minds according to current business needs. In 2005, he became famous TV star by participating in a show called 'Dragons Den' and did many more till date. At present Jones is the owner of many businesses and making profit of around 250 million pounds by investing in around 20 companies (ABOUT PETER JONES, 2021). Richard Branson Background: Richard Branson also known Richard Charles Nicholas Branson born in 1950 at Surrey, England. In his childhood he suffered from dyslexia and couldn't continue his study and dropped out from school for doing something extraordinary at the age of 16. He established 'Student'
magazine for students and got success as well as a lot of profit. Branson is married to his second wife, Joan Templeman and has two lovely children, Holly and Sam. They are currently residing in Necker Island in British Virgin Islands(Richard Branson, 2021). Experience: Branson, a school dropout indulged himself in his first business venture as a teenager with a magazine named 'Student' which after giving success and fame went to loss in late 1960's. With his keen desire to be a successful businessmen in spite of failure he formed a business called Virgin Mail Order Records to raise funds andeventually forms his first British Record Store with the help hegot help from Virgin Records. In 1984 he became the backer of Virgin Airlines which he sold to raise funds for Virgin Atlantic and in 2004 he shifted his interest to space tourism and formed Virgin Galactic Company. His dedication and handwork helps him to expand his business across globe and also in various categories including space tourism in 2013, voyagesin 2017 and hotels in 2010 and lastly company planned to maintain status in hotels before embarking on renovation in 2019.Branson is also known for his adventurous spirit, sports love and achievements like crossing ocean in a hot air balloon(Richard Branson, 2021). From the above two examples of entrepreneurs, we can learn that by taking failures as an opportunity tosuccess, we can acquire whatever we want to achieve through dedication. CONCLUSION From the above report, it could be concluded that an establishing a business comes with various risks and rewards. The various types of ventures have different aims and strategies to run their business. Different individuals have discrete reasons to become an entrepreneur which makes them different from each other. It has also been observed that small-firms and start-ups have majorly contributed in the economy of UK by creating more employment. To become an entrepreneur is not an easy task, a person needs to have some characteristics in order to become a successful business person. From the examples taken in this report, it can be seen that if an individual wants to become an entrepreneur and is ambitious enough to complete it then nothing could stop them in achieving success.
REFERENCES Books and Journals Boudreaux,C.J.,2020.Ethnicdiversityandsmallbusinessventuring.SmallBusiness Economics,54(1), pp.25-41. Boutillier, S. and Ryckelynck, P., 2017. Sustainable-entrepreneurs: quantifying opportunities and socialnetworks,casestudyonsustainableentrepreneursinaheavyindustrial area.International Journal of Entrepreneurship and Small Business,31(1), pp.85-102. Hosseini, R., 2019. Role of the Entrepreneurship in the Development of Industry.Journal of Contemporary Research in Business, Economics and Finance,1(1), pp.1-11. Igwe, P. A. and Icha-Ituma, A., 2020. A review of ten years of African entrepreneurship research.Research Handbook on Entrepreneurship in Emerging Economies. Omotosho, A. O., Gamede, B. T. and Uleanya, C., 2020. Effect of entrepreneurship education on entrepreneurial intentions of rural-based university students in South Africa.African Journal of Development Studies (formerly AFFRIKA Journal of Politics, Economics and Society),10(2), pp.83-104. Ram, M., Jones, T. and Villares-Varela, M., 2017. Migrant entrepreneurship: Reflections on research and practice.International Small Business Journal,35(1), pp.3-18. Roundy, P. T., 2017. Social entrepreneurship and entrepreneurial ecosystems: Complementary or disjoint phenomena?.International Journal of Social Economics. Ruchkina, G. and et. al., 2017. Small and medium enterprises in the context of regional development and innovations.Journal of International Studies,10(4). Sanguino, R., Barroso, A. and Gochhait, S., 2018. Entrepreneurship in family firms in developed anddevelopingcountries.InEntrepreneurshipandStructuralChangeinDynamic Territories(pp. 91-108). Springer, Cham. Shahverdi, M., Ismail, K. and Qureshi, M., 2018. The effect of perceived barriers on social entrepreneurshipintentioninMalaysianuniversities:Themoderatingroleof education.Management Science Letters,8(5), pp.341-352. Online 5 Reasons why UK Small Business are vital for the UK economy. 2018.[Online] Available through:<https://welcome.akonihub.com/blog/5-reasons-why-uk-small-business-are- vital-for-the-uk-economy>./ UK Small Business Statistics. 2021.[Online] Available through: <https://www.fsb.org.uk/uk- small-business-statistics.html>./ BusinessStartupStatisticsUK(2021Update).2021.[Online]Availablethrough: <https://fundsquire.co.uk/startup-statistics/>./ Large companies contribute 12 per cent of all UK tax. 2018.[Online] Available through: <https://www.grunberg.co.uk/large-companies-contribute-12-per-cent-uk-tax/>./ ABOUT PETER JONES. 2021.[Online] Available through: <https://www.peterjones.com/about- peter-jones/>./ Richard Branson. 2021.[Online] Available through: <https://www.biography.com/business- figure/richard-branson>./