Entrepreneurship: Types, Impact on Economy, Characteristics of Successful Entrepreneurs

Explore different types of entrepreneurial ventures, their impact on the economy, traits of successful entrepreneurs, and how past experiences influence entrepreneurship. Understand the importance of small businesses in social economy growth.

Table of Contents
Introduction.................................................................................................................................................2
P1. Examine different types of entrepreneurial ventures and explain how they relate to the typology of
entrepreneurship ventures, including examples of each type.......................................................................3
P2. Building on the different types of entrepreneurial ventures, explore the similarities and differences
between each...............................................................................................................................................5
P3: Present, interpret and assess relevant data and statistic to illustrate the impact micro and small
business have on the economy.....................................................................................................................6
P4. Explain the importance that small businesses and business start-ups on the growth of the social
economy......................................................................................................................................................9
P5: Determine what makes a successful entrepreneur and determine the characteristic traits and skills they
possess. Explore whether entrepreneurs are born or made and whether entrepreneurship skills can be
learned over time.........................................................................................................................................9
P6: Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation and mindset.
.................................................................................................................................................................. 11
P7: Examine, using relevant examples, how a person’s background and past experiences can hinder or
foster entrepreneurship..............................................................................................................................12
Conclusion.................................................................................................................................................13
References.................................................................................................................................................14
1

Introduction
Before starting the assignment, we must first know from where the word “Entrepreneurship”
came from. The origin of entrepreneurship is from the French verb “entreprendre” meaning “to
undertake”. Therefore it means start or undertaking a new role or responsibility or starting a new
business. In the following assignment we will discuss the concept of entrepreneurship, its
typology. We will research the data so as to prove that entrepreneurs bring revolution in the
economic growth of the country. We will also discuss the various personality aspects and traits
and characteristics possessed by entrepreneurs.
2

P1. Examine different types of entrepreneurial ventures and explain how they relate to the
typology of entrepreneurship ventures, including examples of each type.
Any business is said to be entrepreneurial venture if it is manufacturing or creating something
unique and new to the market. It implies that the entrepreneur is going to innovate something
new that is not in existence till then and is willing to take the risk. If we talk about different
entrepreneurial ventures, following are the types:
 Lifestyle Business: A lifestyle business is named so because it is a kind of business that
is in accordance with the lifestyle of the person doing that business. He or she can do this
business when and where he wants. It can be done online as well as offline. The main
advantage of this business is that the entrepreneur has the passion to do this as it is
according to his or her lifestyle. Therefore there is no need of motivation as the
entrepreneur is not doing it for making profits but for his/her will.
Example: A perfect example of lifestyle entrepreneur is Tim Ferriss, an innovative author
whose book “The four-hour work week” motivated many other entrepreneurs to take their
ideas seriously.
 Growth Firms: The growth of growth firms is very fast and the income made by them is
also very high. They are usually young firms. They have well planned strategies. Their
main focus is on innovation. They can also be called as serial entrepreneur and are totally
opposite to lifestyle entrepreneurs. These companies keep on developing new
applications and keep on growing.
Example: Google is a kind of growth firm. The value of shares of this company keeps on
increasing day by day.
 Social Enterprises: Social Enterprises are those businesses which operate for social and
environmental purposes. These are profit-making enterprises. These can further be
classified on the basis of profit and non-profit making.
3

Types of Social Entrepreneurs
(Source: www.timreview.ca )
Example: Example of Social Enterprise is Unity Trust Bank. It donates its profits for social
works. It makes use of the deposits of people for helping those who are in need.
 E-commerce: The businesses that operate totally through internet are called as E-
commerce. Such types of businesses have their own websites where all the useful
information about the company can be found. They work 24*7. These websites can be
accessed by anyone anytime and shopping can be done without having to travel and
payment is done through bank transfer or debit/credit cards.
Example: We have many examples of such business now a days like EBay, Amazon etc.
Apart from the above, intrapreneurship is another type of entrepreneurship which exists
within a company. It is mainly introduced by the manager of the company in order to
innovate new things. They are mainly found in large companies. It is self confidence of
manager and his willingness to fulfil the objectives of the company that gives rise to such
entrepreneurship (Drucker, 1985).
4

P2. Building on the different types of entrepreneurial ventures, explore the similarities and
differences between each.
As we have seen the different types of entrepreneur ventures above, now we will discuss the
similarities and differences between each.
At first we will discuss the differences and similarities between e-commerce and the traditional
way of commerce. Traditional commerce’s transactions are handled manually whereas in e-
commerce transactions are totally automatic and are made through internet. Traditional
commerce requires physical location and runs in working hours of the day whereas e-commerce
business gives access to customers anywhere, anytime and from anywhere in the world using
internet. In traditional commerce, before making any purchase we can check the quality of the
product and can have it but in e-commerce product needs to be delivered to the customer within
a selected time frame. Both have similarities too like in both goods are being exchanged and
mount is paid. It is the wish of the customer whether he wants to buy the product from the local
shop or from the online store. The customer needs to pay in both cases and can return the product
in both cases.
Secondly, we will compare the similarities and differences between lifestyle and serial
entrepreneur ventures. Both lifestyle and serial entrepreneur ventures have the objective of
making long term income but apart from this, serial entrepreneurs develop with time. Lifestyle
entrepreneurs are generally small businesses which support the lifestyle of the entrepreneurs and
fulfil their own wish. Serial entrepreneurs are generally big companies where the whole
responsibility lies on the shoulder of the manager. In both the cases, innovation is the focus. A
lifestyle entrepreneur can work anywhere on his bed, hotel or hostel.
At last, we will discuss the similarities and differences between male business entrepreneurs and
female business entrepreneurs (Kepler and Shane, 2007). The working hours performed by
female business entrepreneurs are fewer as compared to male business entrepreneurs. The reason
behind this is the time taken by the family of women and their responsibilities towards their
families whereas men are dedicated more towards business. The desire to make money is more in
men as compared to women. Social barriers restrict the thinking of women entrepreneurs in most
of the cases while male entrepreneurs are free to think and do big and different. This can be
made clear by taking example where man starts his own big construction company whereas
woman starts a beauty salon at home due to social taboos. One more difference is the risk taking
5

capability. Male entrepreneurs take risks in their business whereas women entrepreneurs don’t.
But despite all these similarities and differences, it has been observed and proved that if the same
business is being started by the man and woman with the same resources then both do the
business without making much difference. We have so many examples of successful female
entrepreneurs today like Lucy Peng, who is the creator of Alibaba.
P3: Present, interpret and assess relevant data and statistic to illustrate the impact micro
and small business have on the economy.
According to European Union, micro, small and medium business can be categorised on the
basis of number of employees, the turnover nd total of the balance sheet.
A business is said to be micro if it has equal or less than 10 employees, has a turnover of 2
million or balance sheet total of 2 million whereas a small business has nearly a staff of 50
employees, has a turnover of 10 million or balance sheet total of 10 million. On the other hand a
medium company usually has a staff of 250 employees. Has a turnover of around 50 million and
a balance sheet total of equal or less than 43 million.
SMEs categorization
(Source: ec.europa.eu)
We can also classify the businesses on the basis of their nature such as sole trader, in partnership,
companies with limited liability, charity organizations, franchises etc.
After research we came to know that during the beginning of year 2016, 5.5 million businesses
of micro, small and medium size were registered out of which sole traders were 3.3 million,
421000 were in partnership and 1.8 million were the companies (European Commission, 2017)
6

SMEs distribution
(Source: www.gov.uk)
We can analyse above on the basis of employment, in UK, small and medium businesses provide
employment to around 15.7 million employees which is nearly 60% of total employment.
7

Employment distribution
(Source: www.gov.uk)
Thus on the basis of the total employment provided in UK, it can be said that SME’s are more
dominant in UK and therefore contribute more towards the economic growth of the country as it
provides employment to almost half of the country’s workforce thereby reducing the rate of
poverty in the country.
According to a research, around 37% of SME’s have spent all their money on doing research in
between 2008 to 2010. Besides this, they also contribute much to taxes. Around 11.5 million
were collected through SME’s s taxes during 2010-2011. In order to encourage such
entrepreneurs, government also offers its full support and contribution towards their education
and by reducing barriers for them in opening of new businesses.
Therefore we can conclude from the above data that there are many ways in which SME’s
contribute towards the economic development of the country whether it be through providing
employment, new innovation, decreasing poverty rate or maximizing the welfare of the society.
They also help the government through taxes and in turn government also offers its full support
to them. Its all because of the right to private property due to which there is increase in the
growth of economy and decrease in country’s poverty.
8

P4. Explain the importance that small businesses and business start-ups on the growth of
the social economy.
According to countries like China and East Asia, the affect of the entrepreneurs on the economy
is always positive. Therefore, we will discuss the same here that how small businesses and
business start-ups affects the economic growth of the country and their contribution towards the
same.
The only difference between business start-ups and small businesses is that the start-up
businesses are entrepreneurial businesses with a unique product new in the market whereas small
businesses have already existing products to offer. The annual turnover and number of
employees re almost same in both being not more than 10 employees and less than 2 million
turnover. They both have their hands in the economic growth of the country as already explained
in the above question. Small companies improve the economic structure of the country.
Therefore, in order to revive the economy, the government should help in the creation of new
businesses. To achieve this objective, several options are being offered by the government. The
most important among them is the “Business is Great”. The site aims to help the entrepreneurs in
starting a new business and also helping the existing businesses in growth. As soon as we are
online on this site, we will find many advices and suggestions about what to start and where with
the options of available finance. It also helps in selection of suitable staff and creation of website
for the business (Drucker, 2007).
Therefore, we can conclude that small businesses and start up businesses helps in employing the
people of the country and thereby in reducing the poverty.
P5: Determine what makes a successful entrepreneur and determine the characteristic
traits and skills they possess. Explore whether entrepreneurs are born or made and
whether entrepreneurship skills can be learned over time.
In order to understand the characteristics and skills of a successful entrepreneur, let us take the
example of two very successful entrepreneurs. The first example is one of the richest
personalities of the world and the creator of a social page in 2004. He is Mark Zuckerberg, a
student of Harvard University. The second example here is the author of one of the bestselling
book series “Harry Potter” i.e. J.K. Rowling. Although the success areas of these two
9

entrepreneurs are totally different from each other but they possess the same characteristics. The
common characteristic is the passion for the work they do so as to give their best and become
successful in their respective areas. They both are quite confident of their work, are independent
and the sole thinkers of their business.
The main difference between the manager and entrepreneur is that the manager only works in a
company which already exists. He does not need to think about opening his new venture. On the
other hand an entrepreneur is the one who is always concerned about new innovations. In order
to become successful entrepreneur, they are required to take risks. Successful entrepreneurs think
about innovation and make it possible through their efforts. Their passion and confidence makes
them successful. Entrepreneurs have their own ideas and that makes them different from
managers who only take decisions to make possible the ideas and thinking of someone else. Even
after taking risks, entrepreneurs are always confident of what they are doing and what they are
willing to do in future. It is the positive thinking of entrepreneurs which makes them successful.
For example, Rowling had to make hard efforts in order to make the printing press agree to
publish her first book of “Harry Potter” series. She did not give up until it was published as she
was always sure of her novel and was sure that it will bring revolution in history of English
Literature.
People having such characteristics are born with it as no one can learn these traits and
characteristics. The only thinks that can be learnt are the skills in order to be successful in the
new business (Daley, 2013). Therefore, now we take a look on the skills required to become a
successful entrepreneur. The most important are the POSCORD skills. It stands for planning,
organizing, staffing, coordinating, reporting and directing. A successful entrepreneur should be
able to plan and manage the new ideas and the new company. Apart from these, interpersonal
skills are also equally important. As a entrepreneur, a person needs to maintain healthy
relationship with the stakeholders of the business and should be cooperative. Leadership skills
are also important as a entrepreneurs need to work with his own team in order to take his
company towards the achievement of his objectives. As entrepreneur can not do everything
alone, therefore he will be required to make a healthy team and must possess leadership skills.
10

As an entrepreneur, hard work and efforts are required in order to make the ideas possible and to
introduce something new in the market on the part of the entrepreneur. Therefore, it is also very
important to have personal effective skills.
So, we can conclude that the entrepreneurs are born with the special characteristics but the skills
to make their business successful can be learnt over time.
P6: Assess how aspects of the entrepreneurial personality reflect entrepreneurial
motivation and mindset.
The two main ingredients of personality are the temperament and character of the individual. The
personality is inherited whereas the character is acquired by the individual from the
surroundings. It is said that the personality of the employees and his performance are linked to
each other irrespective of the position of that employee. Following are the five aspects of the
personality of entrepreneur which influences his motivation and mindset:
 Neuroticism: People with neurotic personality do not have emotional balance. They
suffer from negative emotions and depression. As the whole responsibility of new
business lies on the shoulders of the entrepreneurs, they have to work for long hours. Due
to high risk involved with the introduction of new product, they don’t have a secure
income. In order to maintain balance, entrepreneurs should possess positive personality
and must know how to control stress at work.
 Extraversion: An extrovert person has the capability to improve, are energetic, very
active and very talkative too. They usually develop good relationships with the
stakeholders. On the other hand an introvert person is shy and likes to be lonely by being
reserved. Therefore in order to be a successful entrepreneur, an individual should have
high level of extraversion in his personality.
 Openness: An individual with this kind of personality are usually creative and
innovative. They are adventure loving person who constantly looks for new experiences
to learn from them. Entrepreneurs generally require this kind of personality in order to
solve their problems in a much easier and innovative way. Such people are highly
motivated also.
11

 Agreeableness: This is related to the attitude of the individual. The individual having this
characteristic in his personality are caring, trustworthy, and forgiving. They possess
healthy relationships with their staff and are always ready for any kind of help.
 Conscientiousness: This is indicated by the level of determination of the entrepreneur
towards his work and the motivation to achieve his objectives. It implies the hard work of
the entrepreneur and his ability to complete his objective and not to leave anything
incomplete in his business (Cherry, 2017).
P7: Examine, using relevant examples, how a person’s background and past experiences
can hinder or foster entrepreneurship.
Entrepreneurship involves high risks and responsibilities. There are many factors which foster
entrepreneurship and many that hinder this possibility.
Most entrepreneurs inherit the mentality of doing something innovative from their parents or
family. Experience is more important than education for entrepreneurship.
For example: Herb Kelleher is an entrepreneur. He brought the revolution in the airline industry
by starting a very low-cost airline service named “Southwest Airline Company” in the US. He
started working at a very young age in the company where his father used to work as a manager.
He always wanted to be entrepreneur since young. He fought hard to follow his dreams and
turning it into a reality (Inversian, 2016)
Apart from this, several other factors are also responsible for entrepreneurship such as:
 A person starts thinking of doing something new when he has been unemployed for a
long period of time or is not satisfied with his current job.
 Similarly, sometimes people feel under motivated and do not feel like growing working
in the company, therefore starts thinking of doing something new.
 By having a business of his own, an individual has all the freedom of doing what he
wants and how he wants.
This can be explained further by taking another example. Steve Jobs, an American entrepreneur
was the CEO and co-founder of Apple. He was born in a poor family in California and was being
adopted. Since childhood he had immense passion for technology, which led him to create Apple
12

with some of his friends in the garage of the house he used to live in. He worked very hard
throughout his life and became a successful entrepreneur by achieving his dreams.
13

Conclusion
Thus from the above study we have clearly understood what is required to be a successful
entrepreneur and the various characteristics and personality traits of an entrepreneur. We have
explained the various types of entrepreneurial ventures and typology. We have also discussed the
differences as well as similarities among them. We have also explained in detail how the past
experiences and the family background of an individual has an affect on his entrepreneurial skills
and mindset. Thus we have discussed all the important aspects that are required in order to
become a successful entrepreneur.
14

References
Cherry, K., (2017), The Big 5 Personality Traits, [Online], Available at:
https://www.verywell.com/the-big-five-personality-dimensions-2795422 [Accessed 26
January 2018]
Daley, J., (2013), Are Entrepreneurs Born or Made?, [Online], Available at:
https://www.entrepreneur.com/article/228273 [Accessed 26 January 2018]
Drucker, P.F., (1985), Innovation and Entrepreneurship: Practice and Principles, [Book],
https://www.goodreads.com/book/show/114841.Innovation_and_Entrepreneurship
[Accessed 25 January 2018]
European Commission, (2017), What is an SME?, [Online], Available at:
http://ec.europa.eu/growth/smes/business-friendly-environment/sme-definition_en
[Accessed 25 January 2017]
Inversian, (2016), Biography of Herb Kellehler, [Online], Available at:
https://inversian.com/biografia-herb-kelleher/ [Accessed 26 January 2018]
Kepler, E., and Shane, S., (2007), Are Male and Female Entrepreneurs Really That Different?,
[Online], Available at: https://ideas.repec.org/p/sba/wpaper/07ekss.html [Accessed 25
January 2018]
15