Entrepreneurship and Business Cycles

The assignment delves into the relationship between entrepreneurship and economic cycles. It examines various theoretical perspectives on entrepreneurship, including its influence on innovation, competition, and internationalization. The analysis considers empirical evidence and policy implications surrounding entrepreneurship's contribution to economic growth.

Entrepreneurship

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1) Entrepreneurial ventures.......................................................................................................3
P2) Similarities and differences...................................................................................................4
TASK 2............................................................................................................................................5
P3) Micro and Small business affecting economy.......................................................................5
P4) Importance of small businesses and start-ups post Brexit.....................................................7
TASK 3............................................................................................................................................8
P5) Successful entrepreneurs and the attributes of their personality...........................................8
P6) Aspects of personality...........................................................................................................9
TASK 4..........................................................................................................................................11
P7) Influence of background and experience on entrepreneurship............................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Entrepreneurship is a process in which a person takes complete responsibility of
designing and implementing an idea and transforming it into real time business. The owner of
such a business enterprise is known as an entrepreneur. In this report, various types of
entrepreneurial ventures have been discussed. UK's social economy has changed over the past
one year because of its sudden decision of walking out of the European Union. In the following
assessment, the importance and impact of small and micro businesses on the economy of the
country has also been discussed. Modern day economies encourage entrepreneurship because
there is a lot of growth and development procured by countries through these ventures. This
report consists of information regarding two successful entrepreneurs i.e. Philip Green and Mike
Ashley. Their characteristics, traits, background and experiences have been described in this
report for gaining more understanding towards entrepreneurial aspects.
TASK 1
P1) Entrepreneurial ventures
Entrepreneurs when develop their business then it is considered as entrepreneurial
venture. It is just not limited to settling of business but all the activities comprising business
processing are to be considered. If the entrepreneur doesn’t have sufficient resources then
venture capitalist or funds have to be gathered from external sources for fulfilling the
requirements (Kirzner, 2015). Following are the four basic types of entrepreneurial ventures
depending on their size and purpose of functioning:
 Start-ups: Entrepreneurship ventures which are at micro level and are operating with
minimum possible resources are considered as start-ups. These are completely new
businesses that are developed from scratch and generally with a motive to resolve
different issues and problems of target customers. For example, Flavourly is a business
start-up that provides craft beers on monthly subscription.
 Small Scale entrepreneurship: The type of entrepreneurship which involves small
number of employees and limited volumes of sales are considered as small scale
businesses. These companies are considered as private ownerships and they are operated
as sole proprietorships or partnerships depending on the type of resources involved

(Bridge and O'Neill, 2012). Arcadia Group was a small scale entrepreneurship that was
advanced by Philip Green.
 Social entrepreneurship: Society is made of individuals who reside together in a
community. Social entrepreneurship is considered when a person develops an idea that
has capability of eradicating certain social issues or provides sufficient benefits to the
society. The amount of risk and efforts applied in this kind of entrepreneurship is quite
high but it becomes largely successful if the main motive behind the business is fulfilled
(Drucker, 2014). For example, microfinance institutions and several educational
programs are considered as social entrepreneurship.
 Large Scale entrepreneurship: The amount of capital that is invested in the company
creates a difference in size of entrepreneurship. Large scale entrepreneurship requires an
investment of about 5 crores or more. The risks that are associated with large scale
businesses are very large. These types of ventures are also privately owned and the
production or sales volume is also large in this entrepreneurship (Kuratko, 2016).
The aforementioned types of entrepreneurial ventures depict that entrepreneurship is
comprised of various factors like resources, sales, production and the customer share. Above all
these factors or determinants, entrepreneurship is also based on the confidence a person holds
while setting up the business and the purpose behind the approach.
P2) Similarities and differences
Entrepreneurial ventures that have been discussed ahead have following similarities and
differences:
Similarities
 Every venture is privately owned and has no role of government in their functioning. This
implies that entrepreneurship can be encouraged by national policies and structure of
government but it is completely privately owned (Storey, 2016).
 The entrepreneurial ventures which are guided by vision and objectives of solving certain
problems. The nature of problem may vary but every venture has a vision and mission
that is developed by entrepreneur himself/herself.
 Reliability or dependency on other individuals for accomplishing particular tasks or
business process is not allowed in entrepreneurship. The owner himself takes the
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responsibility of performing various operations which makes him/her different from other
business manager (Santos, 2012).
Differences
1. The amount of profits earned by an entrepreneurial venture is different. This difference is
created because of the amount of resources invested in business functioning. For
example, small scale companies are limited to city or community level. These can be in
the form of shops, retail organisations or any other set-up (Naudé, 2013). On the other
hand, large scale entrepreneurship is organised on national level and has huge amount of
investment.
2. Social entrepreneurs have a vision and aim to change the current status or condition of
society and community by bringing in some innovative strategies and products. This kind
of vision is not present in any other type of entrepreneurial venture.
3. Goals and objectives which are developed and implemented by organisational heads is
another attribute which brings a lot of difference in the entrepreneurial venture. Be it
small business or a business start-up, the goals and objectives creates a huge
differentiable impact on the organisational activities (Bosma and et. al., 2012).
4. Marketing communication is another aspect which helps in differentiating various
entrepreneurial ventures. The philosophy or purpose that has been adapted by the
company to its marketing strategies varies according to the entrepreneurial venture.
5. The contribution to economic growth of country is also an important element which
separates these entrepreneurial ventures. The companies depending on their profit
margins have different levels of economic impact over the country. Small scale and
business start-ups are two entrepreneurial ventures that do not have much annual profits
but are significant in the economic growth of operational country just like large scale and
social ventures (Onetti and et. al., 2012).
TASK 2
P3) Micro and Small business affecting economy
Micro and small businesses are considered as the backbone of UK’s economy. The
amount of workers, resources, production and sales helps in identifying whether a business
belongs to micro, small, medium or large enterprise category (Koellinger and Roy Thurik, 2012).
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Apart from large and medium business organisations that function with large scale production on
national and international level, small and micro level companies are present at local and
community level. This implies that maximum of employment at local levels are generated
through micro and small businesses. Economic situation of a country is dependent on the current
functioning of these companies and enterprises (Card, 2016).
UK has been experiencing significant contribution to its economic stability due to rise in
service sector organisations and entrepreneurial ventures. This rise has been in the past 2-3 years.
Various statistics have revealed that countries which have higher number of small and micro
level organisations experience greater economic growth when compared with nations that have
dominance of large and medium enterprises (Carland and Carland, 2015). Innovation is a
strength which can transform entire business forecast of an entrepreneurial venture. Small
ventures have greater capabilities and opportunities to bring in innovation in respective business
activities. Recession and inflation are faster recovered when micro and small businesses are
prevalent. The reason lying is employment opportunities and stronger entrepreneurial attributes.
An entrepreneur has the capability of bringing growth even in hardest times (Landström,
Harirchi and Åström, 2012).
According to Morris (2015), the small and micro businesses are considered to have larger
impact on every aspect of economic position of country. Whenever political, financial or legal
reforms take place in the country, major sufferers are large and medium organisations. On the
other hand, small enterprises are more adaptive to changes in their business environment. There
is no doubt that certain impact is assessed by them but the recovery is very fast and they stabilise
way sooner than their counterparts (Moroz and Hindle, 2012). Hence, their contribution in the
economic growth and social stability of country is not hindered. The scope of growth and
development is very high in these types of entrepreneurial ventures.
Many of the small and micro businesses which are functioning in the country have been
supporting different small scale operations of large scale enterprises (Koellinger and Roy Thurik,
2012). This implies that if the number of such businesses decreases then there will be a
simultaneous impact over large scale functioning. This results in instability in financial condition
of country. From these evaluations, it is assessed that small and micro businesses are very
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important for maintaining stability in the economic condition of country (Onetti and et. al.,
2012).
P4) Importance of small businesses and start-ups post Brexit
Small businesses are considered as those entrepreneurships which are on a local level and
limited in terms of resources and capital. Their annual turnover is not that huge when considering
individual businesses (The importance of small businesses in the UK economy, 2015). Brexit was
the process which UK underwent for exiting the European Union membership. The country
decided to move out of this collaboration in 2016. Many analysts and researches declared that
UK would undergo serious economic breakdown and will be subjected to critical conditions like
recession, unemployment, etc. But today’s current scenario of UK’s economical situation depicts
that country has witnessed a growth of 0.6% in the last quarter (Gough, 2016). The country has
been able to beat previous forecasts after concealing the Brexit decision.
The major contribution to this growth is due to small businesses and entrepreneurial
ventures. Gross Domestic Product growth was about 1.6% in 2017 (Gough, 2016). Despite of
being a reduction in the growth rate, the country managed to continue its functioning with a
better approach for maintaining the strategic position in international markets. Amongst the 1300
organisations trading in the nation about half of them did not face in critical situation or effect of
Brexit (The importance of small businesses in the UK economy, 2015). On the other hand, 30%
businesses were affected negatively and the rest experienced positive impact. Hence, the overall
situation of country was stabilised after such a crucial decision. Since Brexit, the National
Association of Commercial Finance Brokers has stated that there is significant increase in the
number of inquired for mortgages and financial appetite of small businesses (Card, 2016).
The importance of small businesses and start-ups can be measured in the form of increase
in the funding requirements of various entrepreneurial ventures since 2015. Hamshire Trust Bank
has forecasted that by 2020 UK’s economical conditions would improve because small
businesses shall contribute about 217 billion pounds. The level of employment opportunities is
quite high when start-ups and small enterprises are encouraged (Carland and Carland, 2015).
Despite of the fact that from all of the small enterprises, 55% last only up to five years; there is a
requirement of more encouragement from government’s side to initiate more entrepreneurial
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ventures. This shall help in stabilising national economy without being affected by external
factors like Brexit.
From export-import to micro level agricultural activities, if the start-ups and small scale
businesses reduce, then buyers will be adversely affected (Gough, 2016). Currently, even large
companies are dependent on these types of businesses because they form one of the significant
components of large value supply chains. Post Brexit, there has been 5% growth in start-ups and
micro businesses. This implies that individuals are being encouraged by the loss of restrictions
which were put on by EU in the past (The importance of small businesses in the UK economy,
2015). The job security and income values are guaranteed largely when comparing with working
in large organisations. Current market scenario also depicts that this trend of entrepreneurship
has transformed into a culture which is spreading largely in UK. This automatically reflects the
importance of small businesses and start-ups as a part of national economy.
TASK 3
P5) Successful entrepreneurs and the attributes of their personality
Arcadia Group is a renowned business organisation headed by Philip Green. He is one of
the most important icons of entrepreneurship in UK and has set various examples for young
entrepreneurs (Landström, Harirch and Åström, 2012). Topshop, Topman, Wallis, Evans,
Burton, Miss Selfridge, Dorothy Perkins and Outfit are the major brands that have been
established and owned by Philip. He started his entrepreneurial venture by acquiring funds in the
form of loan of £20,000 with a concept of importing great quality jeans and reselling it to huge
retailers. Slowly yet steadily, Philip started developing his micro business into a large collection
of retail outlet chains that have become brand icons in the current market scenario. Philip Green
depicts two important qualities that has helped him in becoming a successful entrepreneur. These
are:
1. Perseverance: Challenges and failures are a part of the complete business functioning. A
successful entrepreneur will always develop positive perception towards every situation
irrespective of the fact whether it is positive or negative (Carland and Carland, 2015).
Hence, it is important to learn that perseverance towards a situation or subject should be
encouraging and motivating so that negative impact over various functions and actions is
not experienced (Morris, 2015).
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2. Self-Discipline: Philip Green depicted high amount of self-discipline which helped him
in developing complete focus over the company objectives and goals. The feeling of
being loyal towards the work ethics and intolerance for lethargy are some of the key
points which are to be remembered while developing self-discipline (Moroz and Hindle,
2012).
Mike Ashley is another successful entrepreneur of the British empire with his approach in
the sports goods market. He has made a recent purchase of £135 million for owning a club i.e.
Newcastle United. Being ranked on the 15th position as one of the most influential entrepreneurs
in Forbes magazine, Ashley has a lot to inspire aspiring entrepreneurs. The traits and qualities
depicted by him are rare and when inculcated in a person can bring in quick growth and success.
Following traits or qualities have been observed in the working style of Mike Ashley. Passion: Entrepreneurship is incomplete without high passion and the motivation to
reach top of the world. Mike Ashley had the passion to conquer the sports market with
extremely good quality products and services. This passion helped him in staying
motivated throughout his journey (Onetti and et. al., 2012). It brings in an inner strength
to fight the highs and lows of a business cycle and achieve set goals and objectives
smoothly.
 Competitiveness: The quality that is portrayed by Mike Ashley which also differentiates
him from other business managers is competitiveness. Often people forget about
competition and continue their strategies in a monotonous way when they reach a
successful position (Koellinger and Roy Thurik, 2012). But Mike Ashley did not believe
in this notion and has kept ignited his competitive spirits till date. This quality has helped
him to keep on developing and growing in the domestic and international markets.
P6) Aspects of personality
Before implementing any sort of strategic plans or sudden actions in the name of an
entrepreneurial venture, it is important to identify the aspects of personality that a person has and
their relation with entrepreneurial mindset (Bosma and et. al., 2012). Mike's dedication and
passion towards competition is the greatest trait which defines that deep down his mind he has an
insecurity to be backed down by competitors or rivals. This kind of unknown fear of losing the
fame and position acquired by business is an indication that this individual has an entrepreneurial
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mindset. As mentioned before, passion developed by a person towards particular things or
subjects brings in an automated motivation which further helps in fighting difficult situations
(Kuratko, 2016). This quality was found in Mike and hence, it reflects towards the much needed
motivation and entrepreneurial attribute.
Resourcefulness and the determination to take actions without fearing the risks is another
aspect of personalities of entrepreneurs (Drucker, 2014). There may be situations in which
sufficient amount of resources would not be available with the company. Entrepreneurs will find
out a solution from any possible method and focus on growth rather than barriers. Philip Green
has this characteristic in his working style. In his initial days of developing the business, there
were no funds available to even buy the raw material. But this aspect did not lead to failure of his
ideas and thoughts (Drucker, 2014). He managed to take loan and then continue with his
business development strategies.
The personality traits like self-discipline and fearlessness towards risks and societal
acceptance have been witnessed in both Mike Ashley and Philip Green. Entrepreneurial mindset
is developed by self-guiding thoughts and ideologies. Unlike the stereotypes, these people have
certain amount of flexibility but do not compromise with business processes (Kuratko, 2016).
Hence, a sense of discipline and strictness is automatically depicted at places where it is needed
the most. For example, while hiring candidates for their firm; entrepreneurs make sure that
highly skilled and knowledgeable candidates are selected. They do not compromise skill with
quantity.
The qualities and characteristics of entrepreneurs can entirely change or transform the
business functioning (Storey, 2016). Mike Ashley and Philip Green had the determination and
qualities of bringing their ideas and dreams into reality. This mindset of theirs helped workers
and staff members in getting inspired and motivated for working with more positivity. Moreover,
these individuals continued to pursue their aspirations even after taking their entrepreneurial
venture to the next level (Santos, 2012). This part of their personalities reflects an unstoppable
potential which young entrepreneurs should inculcate in their working style. It is a great
motivational factor for overcoming barriers and hurdles which may come up at any point of time
(Bridge and O'Neill, 2012).
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TASK 4
P7) Influence of background and experience on entrepreneurship
The background and experience are two different aspects. Wherein background
comprises of a set of events which have occurred in an individual’s life, experience is the
learning or practical contact which has been gathered by respective person in terms of event or
particular facts (Kuratko, 2016). There are situations where a person will opt for
entrepreneurship because of his/her background or any life event or experience. In case of Philip
Green, he belonged to a poor family and sustained his different needs and requirements by opting
for various odd jobs. On the other hand, Mike Ashley perceived entrepreneurship as an
opportunity to bring up the dreams and ideas into reality.
The experiences which a person acquires have some sort of effect or impact on the
thinking process (Kirzner, 2015). Be it good or bad, positive or negative, the nature of
experience results in influence on decisions taken by the person. Entrepreneurship is the inner
personality trait of the individual. Businesses are subjected to changes and critical situations. The
company can recover such serious situations only when correct decisions are taken (Storey,
2016). Considering background, it can have both positive and negative impact on the
entrepreneurial attributes of a person (Naudé, 2013). For example, Philip Green has been
subjected to various controversies and negations in terms of his public image. This background
did not affect his business decisions. He has backed his organisation Arcadia Group with
effective support and wise decisions.
Businessman Mike Ashley has developed a positive image by avoiding controversial
incidents and events. His personality trait and learning from others’ experiences helped him to
make wise decisions in terms of both company and personal life. There can be any sort of
experience in both professional and personal aspects but the intensity of these can be judged by
learning abilities of a person (Bridge and O'Neill, 2012). Entrepreneurship can be fostered by
background and experiences if concerned entrepreneur has capability of overcoming negativity
and developing a positive perception towards every situation. This not only helps in recovering
from the impact of situation but develops as a motivational factor for other individuals (Bosma
and et. al., 2012).
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Legal allegations and rivalry are certain attributes which have been experienced by all
renowned entrepreneurs in their respective field of operations (Koellinger and Roy Thurik 2012).
It is an integral part of business. Backgrounds and experiences can even be related to these
features also. Rivalry and legal allegations often deflect the concentration of individuals from
their business objectives. This is threatening to their entrepreneurial venture. Hence, such
experiences can hinder entrepreneurship and as a result, the complete functioning of company is
affected (Morris, 2015). The most important thing is perception of individuals towards their
experiences and backgrounds. When entrepreneurs develop an ability to take wise decisions
without impacting their businesses then their experiences and background become a fostering
element. Else the situation turns the tables and businesses will experience negative impact.
CONCLUSION
Entrepreneurship is a characteristic that is inspiring and motivating when it comes to
achieving dreams. Just like Mike Ashley and Philip Green, there are different many
entrepreneurs that are working at different levels be it start-ups, small scale, social level or as
owners of multinationals. This report helps in understanding different entrepreneurial ventures
and their similarities and differences. From all these aspects, it can be concluded that both micro
and small sale entrepreneurships are important for the country’s economic stability. This report
has various facts which reflect that UK’s economic growth has been supported by small and
micro level businesses after Brexit. Moreover, there are some basic entrepreneurial
characteristics which have been portrayed by Mike Ashley and Philip Green. These have been
discussed in this report. Furthermore, the influence of background and experiences which are
catered by successful entrepreneurs during their business journey has been assessed for
understanding whether they help in fostering or hindering development. In case of Mike Ashley
and Philip Green it is clear that their experiences have helped them in taking right business
decisions.
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