Table of Contents Report...........................................................................................................................................1 INTRODUCTION.......................................................................................................................3 TASK 2........................................................................................................................................3 Concept of SME......................................................................................................................3 Examination of Role of SME's and their Role in National Economy.....................................6 TASK 3........................................................................................................................................7 1. Difference between Entrepreneur and Manager.................................................................7 2. Entrepreneurial Characteristics and Skills for Successful Entrepreneurs...........................9 3. Big Five Model of the Personality....................................................................................10 4. Correlation between Entrepreneurial Characteristic and Entrepreneurial Success...........11 5. Factors that can foster and hinder Entrepreneurial Success..............................................11 6. Influence of Background and Experience on Entrepreneurship.......................................12 CONCLUSION..........................................................................................................................13 REFERENCES..........................................................................................................................14
INTRODUCTION This report is divided in two parts and two parts. The first part of the report is about impact of small businesses on UK economy. To assess the impact of SME on UK economy this report includes defining concept of SME(Small and Medium organisation) and later it includes analysis of the growth and financial contribution of micro, small and medium private organisation in economy of the UK. Later contribution of these enterprises have been analysed in context of national economy. The other part of the Essay includes discussion over entrepreneurshipandincludesdifferentiationbetweenentrepreneurandmanager.This includes characteristics and Skills required for entrepreneurs to become successful. This is very important as entrepreneurs have their own skills and characteristics which differentiate them from other business owners and managers. This report includes Steph Croft-Simon who is founder of Nom Foods in UK. She started her business and launched Nom Popcorn and according to her this was first organic popcorn brand in UK. This includes influence of background on entrepreneurs. TASK 2 Concept of SME SME's refers to small to medium size enterprise, this is business organisation in which revenue, assets and number of employees are less and below a certain level. The criteria on the basis of which this number is determined varies on the basis of countries and industries. For example as per the rules of EU businesses which employs less than 250 employees come under the category of SME (Moen and Rialp-Criado, 2018). This criteria is different in other countries. In this all the factors of businesses are less than what is maintained by big businesses enterprise and higher than what is maintained by small and micro businesses. Some key businesses which have been in the category of SME's are as follows- Legal offices Fitness and Recreation centres Landscaping services Snack and non-alcoholic bar Personal care services Engineering services
Beauty care salons. All these places are those which require less initial capital investment. Evaluation of Growth, Financial Contribution of micro, small and medium private organisation to UK Economy In UK businesses which employs less than 250 employees are considered in the category of SME's. Such businesses are increasing day by day in UK and number of such businesses in 2019 there were 5.9 million SMEs in the UK, these SME's was over 99% of all businesses (Mawson and Brown, 2017). In this micro businesses have 0-9 employees, in UK in 2019 there were 5.6 million micro businesses in UK. In UK vast of the majority employs less than 10 people but this type of businesses accounts for 33 percent of employment and approximately 22 percent of turnover. On the basis of this statistics of UK it can be analysed that SME's are 100 percent of the businesses of UK. Employment provided by such are approximately 60 percent and their financial contribution in the economy of UK is 52%. This data clarifies that even after being most of the business part their turnover is very less than what big organisations contribute to economy (North and et.al., 2019). Big organisation in UK are less than 1 percent and contribute 48% of the overall turnover of the economy which SME's do only 52% even after covering the business and economy to almost 100 percent. Illustration1: SME's in UK. Available Through: Business Statistics,2019.
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Another contribution in economy isemployment and employment opportunity and on the basis of above statistics it can be said that SME's generate only 60% approximate employment where big business generate 40% employment. The reason behind less contribution of employment opportunity and financial contribution is their nature and significant characteristic which is that such enterprise employs less people and generate less revenue. The ever growing number of SME's is due to favourable political conditions of UK which fosters individual inspiration for starting their own business (Taiwo, Falohun and Agwu, 2016). However current political condition and Brexit seems to have build up barriers for SME's to grow. In a survey conducted after Brexit more than 1 million Small businesses said that they see Brexit as major obstacle to their success. It is very absolute thatBrexit affect relation of UK with other countries of EU and this is definitely not good. This may increase the difficulty for small businesses to expand in other countries of EU which was easy earlier than it is now. This is how political factor have affected SME's and their success. Political factor and political instability also influence economic well being of the country. From previous analysis it has been found thatSME's are really good for the economy of UK even after contributing considerably small part in financial and employment according to their size and expansion in UK economy (Stouraitis, Harun and Kyritsis, 2017). Just as SME's affect economy, economic factor also affect SME's and their growth in UK. Such factors are Enterprise Density, Inflation, Rate of Interest, Unemployment and business environment. All these economic factors affect SME's in relation with UK enterprise density of UK is very high, inflation rate in UK are stable and this is why opportunities for SME's are good in UK economy. Rate of interest affects when entrepreneurs and businesses borrow money for their businesses and in a survey it has been found that people in UK prefer investing their own money in their business rather than borrowing. This is why interest rate does not affect much the intention and growth of SME's. In relation with unemployment rate is has been found that approximately 56% people leave their job to start their own business which means employment rate does not affect and bother SME'sgrowth(Elmagrhiandet.al.,2017).ItshowsthatUK'seconomicconditionis favourable for SME's but this might get affected from its political instability which may affect its economic conditions such as employment and inflation because of Brexit.
Examination of Role of SME's and their Role in National Economy Comparison of Impact of SME's for Scotland and England Scotland-In Scottish Economy there are approximately 360000 Small and medium sized Enterprises (SME's). this is why these pay a vital role in economy of Scotland as these provide around 1.2 million jobs. In Scotland as per government report which includes that SME's are around 99 percent of all businesses in private sector, 55 percent of private jobs are provided by these businesses and these businesses generate 40% of private sector turnover (Cunningham and McGuire, 2019). In Scotland the largest sector which have been covered by SME's is Professional, Scientific and Technical activities. These are almost 57000 enterprise which are later have been followed by construction enterprise around 45000 and together this account for 27% of all private sector enterprise. Northern Ireland- In this the number of SME's in Northern Ireland are around 124000 in 2019 which have decreased from the number which was around 132000 in 2018 (Broom, 2017). this shows that SME's are not in favourable condition in Northern Ireland. Comparison of SME's for UK for Retail and Construction Industry Retail Industry-In 2019 around 545000 SME's were operating in UK in retail industry. These industry is total of approximate 9 percent of all private business in UK (Konstantopoulou and et.al., 2019). Retail industry and SME's in UK provides employment to 18% of overall private employment and generate 34% approximate revenue and it the financial contribution which Retail SME's provide to UK economy. Construction Industry-In UK there are approximately 10,300,00 SME's which are operatingunderconstructionindustry.Theseindustriesprovidearound8%ofprivate employment and form 18% of total private sector enterprise (Gledson and Phoenix, 2017). Turnover which SME's contribute to UK economy is around 9% from the SME's operating under construction industry.
This analysis and comparison shows that even after less number of SME's in retail sector this sector is more strong and its contribution in giving employment and financial contribution to Economy of UK is more than SME's in construction industry. Comparison of Impact of SME's in Germany and Spain Germany-In Germany total SME's account for around 99 percent of the businesses. These SME's are responsible for approximately 63% of employment in Germany in private sector. This number of SME's and their contribution show increase and growth in Germany andGermaneconomy.TheforecastedgrowthofSME'sinGermanyfor2019was approximately 5.5% for employment and approximately 12% for value added. Total enterprise in SME's in Germany are approximately 2450000 (Karunagaran, Mathew and Lehner, 2019). in this part of retail and wholesale (including online shops) sector is most which cover around 15 percent of overall SME's businesses and construction and home services business cover smallest part of the SME's businesses. Spain- In Spain total number of SME's are approximately 2660000 which cover around 99.9% market share in private industry. This employs 72.4 approximate employees in private sector. In Spanish labour market micro firms play special role. The employment which have been forecasted to increase the employment by 2019 is by approximately 4.5%. in this two third of the employment is expected to rise in micro firms (North and et.al., 2019). This SME's significantly contribute to non financial business economy of Spain. In this Retail and Wholesale Market including (online shops) is biggest part of the SME's businesses which is 20 percent and smallest part covered by SME's is education industry. TASK 3 1. Difference between Entrepreneur and Manager Not one but there are variousthingsand characteristicsand their skillswhich differentiate Entrepreneur from a Manager. Their difference is being discussed here- BasisEntrepreneurManager MeaningEntrepreneurreferstoa personwhorunshis Manager on the other hand is not an owner of the business
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entrepreneurshipandhave someuniquecharacteristics andattributeswhich differentiate them and make them successful. butanindividualwhois responsiblefordaytoday managementand administration of a group of people and or a department of theorganisationand sometimesthewhole organisation. RiskinvolvedEntrepreneurshavetheir vision and they make efforts toachievetheirvisionand thisincludesfinancialrisk andentrepreneursbearsall this risk. Manager on the hand does not bear any risk and the reason behind this is that Managers work for a fixed salary. FocusEntrepreneursfocuson starting and expanding their business and the idea which theyhaveassociatedwith theirbusiness(Dudinand et.al., 2019). The idea which is either can be innovation of theentrepreneurortheir vision. Managers on the other hand does not have any visionary focustheyarefocusedon managingdaytoday activities and how they can smooth functions of business andactivitiesbeingcarried out by various people in the organisation. MotivationThefactorwhichmotivates entrepreneursistheirvision andtheirsuccessandmore importantly their success and their achievement. Managersaremotivatedby their power which they have in organisation and this power of managers derive from their position in the organisation. RewardRewardforentrepreneursis the profit they earn from their Managersgettheirreward from their remuneration and
businessesandmoreprofit they earn more reward they get from their business. their salary (Viinikainen and et.al., 2017). Reward can be given to manager on the basis oftheirperformance.These areextrarewardfortheir efforts. Approach for WorkThe approach for work in case ofentrepreneursisinformal and casual. Approachofworkfor managers is formal and they took systematic approach for Solving all their problem. CharacteristicsEntrepreneursarerisktaker by nature and do what have not been done earlier and this istheirattributethatthey believeindoingsomething which is new, innovative and have not been applied earlier. Managerstaketheirall decisionbasedontheories and applied science. 2. Entrepreneurial Characteristics and Skills for Successful Entrepreneurs Entrepreneurs are different from other usual business owners and what makes them different is their characteristics and skills which other does not have. Some of these skills and characteristics are as follows- Disciplined-Entrepreneursaredisciplinedandthisisbiggestandmostimportant characteristic which is required for success (Lima and dos Santos, 2018). Their life and all the activities are properly managed and they are able to force themselves to remain disciplined and eliminate all the factors which distract them from their goals and vision. Open-Minded-The more open-minded a person they can get more ideas and understand others point of view. This gives more ideas and open more ways in which entrepreneur can drive their thoughts and take their vision on that areas. It is very important that entrepreneurs
understand others' view point and are acceptable to other point of view which can avail them useful knowledge for their entrepreneurship. Strong Work Ethics- Work ethics of successful entrepreneurs are very strong. These people communicate their ethics by their activities rather than just uttering about it. Entrepreneurs will be first one to arrive at the office and the last one to leave. This is their special characteristic. Strong People Skills- This involves skills which are required for selling the product and motivating others so that they can willingly work for the entrepreneur (Lima and dos Santos, 2018). This includes that entrepreneurs have excellent communication skills so that they are able to sell their product to others. Entrepreneurs who are successful also known how they can motivate their employees. 3. Big Five Model of the Personality The five Characteristics are- Openness This trait of personalityfeatures characteristics like imagination and insight. People who are high in these traits have a broad range of personality such as these people are high;y creative, they are open to try new things, these people like challenges and they like to think about concepts which are abstract (Robinson, Hull and Petrides, 2020). People who are low in this trait have characteristic like these people does not like changes, these people does not new things and happy in their usual environment, such people resist new ideas. In relation with entrepreneurs it can be said that Croft-Simon is a entrepreneur and her personality is high in this trait. Which is important for successful entrepreneurs as they like new things and innovative ideas. Conscientiousness This trait when is on high level the characteristics of individual are Spends more time in preparation, Finish important task right away and pay attention to detail. Entrepreneurs are highly conscientious. The reason and fact behind this is that success requires Croft-Simon to pay attention to every detail related to their products and their activities. This is a trait of Croft-Simon that she complete all the important task right away. Extraversion
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In this context Croft-Simon can be considered to stay at moderate level. This includes that Croft-Simon like to make new friends and it is easy for her to start conversation which are based on her confidence but it is also very important to include that she does not like being centre of attention and all the words which she speaks are result of thoughtful process. Agreeableness People who are high in this trait of personality have great interest in other people and care about other people and such people are empathetic towards other people (Dalpé and et.al., 2019).Croft-Simon is definitely among those who are high in this characteristic. She takes interest in other people and their well being and this is the reason she has started a business which is good and healthy for others. Neuroticism People who are high in this trait are moody, feels a lot of stress, Worries about things, Feels anxious and get easily upset. And those who are low in this trait are Emotionally stable, Deals with stress, does not worry much and are very relaxed. In this Croft-Simon is at low extreme as like any other successful entrepreneurs who are emotionally stable and well versed with the methods of dealing with stress. 4. Correlation between Entrepreneurial Characteristic and Entrepreneurial Success TocorrelateentrepreneurialcharacteristicandentrepreneurialsuccessMaslow's pyramid can be utilized. In this characteristic of entrepreneurs like strong people skills and concern for other people's well being. As per the pyramid entrepreneur will take actions to fulfil others needs. In this first needs to be fulfilled are physiological needs. People who are at this level will be provided enough pay so that they can fulfil their basic requirement and people will remain motivated and their motivation will contribute in success of entrepreneur (Cabrera and Mauricio, 2017). This is the way in which entrepreneur will fulfil needs of all their employees who are at different level in the pyramid. This will keep them motivated and this is characteristic of entrepreneur to understand what are the needs and requirements of different employees so that they can be fulfilled by the entrepreneur to keep employees motivated and they can perform their best and get the best result for the entrepreneurs which will add in their success and success of their venture.
5. Factors that can foster and hinder Entrepreneurial Success There are various factors which affect the entrepreneurial success and some of the factors which affect this success are- Education This is one of the biggest factor which affect entrepreneurial success. This factor works in the form that if the entrepreneurial venture and education background of the entrepreneur are same and similar than this can positively contribute to the success of entrepreneurship. This is because of the added knowledge for the entrepreneurship. This is very important that only having a vision is not enough entrepreneurs need to have relatable knowledge which can complement their venture (Lima and dos Santos, 2018). This is also important that most of the big entrepreneurs have started their ventures in the field in which they had knowledge and which they have learned from their very childhood. Financial Status This is one of the most important factor as it is the most important ingredient when entrepreneurs start their entrepreneurship. Weak financial status is more contributing factor for entrepreneurial success. The reason is that needs and wants of individual which motivate them to be successful and only successful entrepreneurs can earn money to satisfy their needs and wants. Though in case of Croft-Simon it is not such because her financial status was not bad. Demographic Factors This is factor which is related with age, gender, education and income level. In this age and gender are points to be considered. It has been found that most of the entrepreneurs who are successful start their venture at early age and among them number of male entrepreneurs is higher than number of female entrepreneurs. This has been changed by Croft-Simon in this report as she is a successful female entrepreneur. Her idea and efforts have led her to very high level of success. 6. Influence of Background and Experience on Entrepreneurship These are both very important factor to affect the entrepreneurship. In this case which includes Croft-Simon her experience have led to her to become a successful entrepreneur. Her physical and health issues and experience to change her diet and what is good to have and what she should avoid all such factors and experience lead her to think more about this concept and this led her to start her own food business in which she avoid ingredient which are
harmful for health. But in some case Background and Experience can also affect the entrepreneurship negatively and their discussion is as follows- Background Background refers to family background of individual and it has seen that in most of the cases entrepreneurs who are successful are supported by their family. They get positive motivation from their family (Sabuhilaki, 2016). Same has been the case with Croft-Simon. She was also positively supported by her family when it came to start her own entrepreneurial venture. But this can be a negative influence as well in case family of the individual does not support them or it can be said that resist individual to do what they want to do it can affect their entrepreneurship in negatively. Experience Issues and experience faced by Croft-Simon motivated her to become entrepreneur and offer more healthy and beneficial food products to the world. It motivated her as what she experienced related to her health others can avoid that experience and this was a negative experience but resulted in positive actions of Croft-Simon. But there are times when negative experience can lead to negative impact and influence on entrepreneurs (Cabrera and Mauricio, 2017). For example if a entrepreneur have faced failure in their last attempt they can become demotivated and their entrepreneurship can get negatively influenced due to that failure. CONCLUSION On the basis of above analysis and discussion it can be concluded that SME's are significant contributor for strong economies and on the basis of above discussion which mainly focused on UK economy it can be concluded that it is very important for UK economy to foster SME's as they are increasing opportunities for employment and also their financial contribution in economy. Their political and economic impact was also included in this discussion which can affect their growth and hindrance of SME's. Another part of report included Entrepreneurs and Entrepreneurship which means that person who has some specific attributes which make him successful in their endeavors. The success which is not possible for
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everyone to achieve without those specific attributes and characteristics. This included Croft- Simon a female entrepreneur from UK whose specific experience related with her health and physical issues motivated her to start her business through which she sale healthy food products which does not affect anyone's health. REFERENCES Books and Journals Broom,J.W.,2017.Socialmedia:abusinessimperativeforIrishSMEs.(Doctoral dissertation, Ulster University). Cabrera,E.M.andMauricio,D.,2017.Factorsaffectingthesuccessofwomen’s entrepreneurship:areviewofliterature.InternationalJournalofGenderand Entrepreneurship. Cunningham, J. and McGuire, D., 2019. Business support and training in minority-ethnic, family-run firms: the case of SMEs in Scotland.Human resource development international.22(5). pp.526-552. Dudin, M.N and et.al., 2019. Environmental entrepreneurship: characteristics of organization and development.Entrepreneurship and Sustainability.(6). p.4. Elmagrhi, M.H and et.al., 2017. Corporate governance and dividend pay-out policy in UK listed SMEs.International Journal of Accounting & Information Management. Gledson,B.J.andPhoenix,C.,2017.Exploringorganisationalattributesaffectingthe innovativeness of UK SMEs.Construction Innovation. Herdjiono, I and et.al., 2017. The factors affecting entrepreneurship intention.International Journal of Entrepreneurial Knowledge.5(2). pp.5-15. Karunagaran,S.,Mathew,S.K.andLehner,F.,2019.Differentialcloudadoption:A comparative case study of large enterprises and SMEs in Germany.Information Systems Frontiers.21(4). pp.861-875. Konstantopoulou, A and et.al., 2019. Improving SMEs’ competitiveness with the use of Instagram influencer advertising and eWOM.International journal of organizational analysis. Lima, F.S. and dos Santos, A.B.C., 2018. The Characteristics and Challenges of Female Entrepreneurship in the Market.International Journal of Advances in Agriculture Sciences.
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