The Impact of Small and Micro-Scale Businesses on Economy

The provided document is a detailed solution to an assignment titled 'Effect of Small and Micro Scale Business'. The assignment requires students to discuss the importance of small and micro-scale businesses, including their impact on entrepreneurship, job creation, innovation, and economic growth. Students are also expected to provide references from various books and journals, as well as online sources, to support their arguments.

ENTREPRENEURSHIP AND
SMALL BUSINESS MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
P1. Various Entrepreneurial ventures and their relation with typologies...............................1
P2. Entrepreneurial ventures and their similarities and difference.........................................2
P3. Small businesses and their impact on economy...............................................................4
P4. Importance of small business in growth of socio-economic condition of country..........6
PART 2............................................................................................................................................8
P5. Characteristic trait and skills of a successful entrepreneur..............................................8
P6 Personality of entrepreneur affect the motivation and mindset.........................................9
P7. Background and Past experiences of an individual affect the process of entrepreneurship
..............................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Entrepreneurship is basically willingness and capabilities to improve, manage and
enhance business venture (Bridge and O'Neill, 2012). Under this, first an idea of innovation take
place in the mind of an individual and then that person make a written plan collect all the
resources and implement a strategy for achieving effective results. They are boiling tank of ideas
which will make the state to grow more immensely (What is Entrepreneurship, 2017.) Present
report is based on the topic entrepreneurship. Different type of ventures and their typologies is
given under this report. Similarities and difference between various firms and contribution of
small business in the development of economy is all studied under this. Further how positive
mind, motivation and background of an individual largely affect the whole activity of a business
all mentioned in the assignment.
PART 1
P1. Various Entrepreneurial ventures and their relation with typologies
There are different entrepreneurial ventures that would be present in this firm which are
as follows:
Lifestyles venture: The main aim of lifestyle enterprises is to provide secure income to
the owners of enterprises. Essential role played by these ventures in market on start-up's
businesses whose owner makes the investment in the industry which is responsible for
controlling competitive situations in markets (Burns, 2010). The location of enterprise is at one
place which assist in increase in development of firm.
Scalable venture: These ventures do not usually have any formal registration with
specific location and also coordination with the bank, as they are newly established firms. This
kind of entrepreneurs usually believe on their vision, mission and also built a support in changing
their environment. Investments made by these enterprises allow assisting for venture capitalists.
Large business entrepreneurship: Large organisations requires huge investment and
capital to conduct business activities. They deal with various types of products and large segment
of customers.
Social entrepreneurship: There exist some society which is related to social welfare
which actually plays important role as creator which would generate huge quantity of products
that would assist in reducing social issues and increase social welfare. To gain and acquire
1

market status, ceaseless efforts in creating innovative products and services are required by
social enterprises.
Entrepreneurs are those people who are not afraid to take risk and sets up a business that
assist them in generating profits (Carland and Carland, 2015). In this way there would be global
department which plays vital role in innovation and development. There would be appropriate
management of own investments which are based on large trades and huge productions.
Organisations require effective control and efficient process of management so that they can
accomplish their desired goals and assist in development of economy.
Different type of typologies
 Research entrepreneur: Before staring business activities these type of firm undertake
lot of research activities and collect relevant data related with the needs and wants of
customers.
 Copy cat entrepreneur: Under this, firms copy the idea of other successful organisation
with the aim of capturing a larger market share.
 Determined entrepreneur: These type of firms are totally opposite with the copy cate
entrepreneurs. These type of enterprises think that successful is possible to achieve
without copying the idea of other.
P2. Entrepreneurial ventures and their similarities and difference
As discussed above with several kinds of entrepreneurial venture there would be many
entrepreneurial venture which would have some kind of similarities and difference as follows:
Types of ventures Similarities Difference
Lifestyles ventures Social enterprises and
lifestyles businesses are
identical because they both
would be concluded from the
same sources of economy. All
the capital is taken from the
funds provided by the relatives
Lifestyles which and social
enterprises are not similar as
their management style is
tactical which would be
different. They can consist of
simple structure which would
be not similar with other
2

and friends. In such cases they
are paid to rewards to workers
on basis of their requirements
such as salary.
ventures structures.
Small business venture In this way small business and
lifestyle venture which are
similar to each other because
both of them are oriented with
low entrepreneurial value.
Their aggressive approach
which would also be similar.
Both of them that is lifestyle
and small business have some
dissimilarities. Their
management styles is reactive
and they are also required for
continuous success which is
not same with other investors.
Scalable venture This is that type of venture
which is aggressive and will
manage growth with this type
of venture that would be
similar and their approach is
also same (Dennis Jr, 2011).
Economic motivation is
basically matching with wealth
creation.
Aggressive and managed
growth ventures which might
not be similar to their
management styles and also be
different from other ventures.
Start-up venture This sector is managed and
controlled by various ventures
that are both using planning
tools. This techniques is
basically related to
management skills and it may
give some rewards on basis of
equity.
This venture is actually
required for motivation theory
which may not be similar to
other sectors.
3

In this task the most important thing which needs to be discussed is that they would
consider various types of ventures which include private, social as well as public enterprise. By
the support of all these roles, objectives and characteristics these are following advantages:
Private venture: The major purpose of private organisations is to generate high profits
by providing efficient quality of products and services to large segments of customer and
providing more job opportunities. There is managed growth and also private ventures which
would be similar because both of their objectives is basically for improving programs and
efficiency of the policies. Their aim is to increase the profit and make some effective policies
such as the choice of organisational structure.
Public venture: This would be responsible for making any kind of development in the
firm with focus to provide welfare to society and communities at large. Major aim of public
enterprises is development of strategy and improving their economy. Thus this will cause
improvement of the enterprise (Down, 2010). Scalable company has some entrepreneurship
qualities which are identical to public organisations as both business works with the aim to
provide welfare to societies of country.
Social venture: Social enterprises conduct business activities that help in upliftment the
condition of the society. They would play vital role in improvement and development of welfare
of communities at large. These enterprises work with the purpose to develop and maintain
relationship surroundings and society.
P3. Small businesses and their impact on economy
Organisation that require small investments and capital to conduct business activities are
termed as Micro or small businesses, For example Start-up's enterprises. Mostly there are women
which are establishing their own business ventures to earn their living (George, and Bock, 2011).
Since the mobility and flexibility which might be given to such micro and small company
factors. Thus this firms are competing as per the condition and skills of an individual person
approach. This innovative person would handle this micro scales that would reflect on
approximately 90% of UK trade schemes. Small trade ventures which are basically useful by
individuals that are helping in changing the economic creation and also income level or the
quality of life.
These sectors and trade field is also useful in providing various effects on job
opportunities as their location which is built is majorly contributing in providing of some kind of
4

development for the youth to get job opportunities. This count has been reached to around 20
million micro start-up's which is also assisting in building of production of approximately
thirteen induced position which consist of two million indirect jobs. There are individuals who
would be operating and employed in by very little things that the company will try to generate
some types of situations of complete situations of overall employment in the country.
All these ventures such as trade which is actually essential and supportive to give
innovation for job opportunities in the community. The impact of small businesses on economy
are provided below:
Effects on region: Small business effects directly on economy of specific region in
which business owners conduct various business activities. The effects can be related with
demand and supply, increasing employment opportunities, competitive market conditions and
increase in economies of scale. (Gorgievski, Ascalon and Stephan, 2011).
Impact on locals: Both of these venture is basically providing direct impact on
community. There can be many companies which would provide large amount to the offering in
the society. Around 60% of employment are creating both business which includes micro and
small business who has built some kind of offering for developing of the economy.
Impact on national and international economy: These companies has impacted on
national and global markets. In beginning of 2014, the share of small business was about £2.5
trillion. This results in increment of job opportunities and growth and development of economy.
Under small business, 35% of market share is acquired by start-ups that create valuable services
and efficient quality products by targeting specific customers.
5

(Source: Effect of small and micro scale business, 2017)
P4. Importance of small business in growth of socio-economic condition of country
Evaluation of the economy of the country is very essential process which basically has
some political, social as well as economic factors of the environment. Small scale needs to fulfil
some types of requirements which is due to social cause in UK.
6

There is some economy where all most all the companies are participating with their
respective capabilities and launched by their owners (Leitch, Hill and Neergaard, 2010). It may
be defined by some kind of contribution of broad percentage of GDP in a community where most
of them would be defining some kind of importance of small and micro business and then using
them accordingly. Those important points which basically define these sectors are:
Improving individual relationship: The main purpose of small business is to improve
interpersonal relationship between customers and employees. It will assist in recognising people
who would be operating and leading with them in their fields. For growth and development of
economy, improvement in relationship with these stakeholders are very essential and vital for
small business.
Responding flexible challenges and issues: Small business assist in dealing with
challenges and issues which are flexible in nature. They posses various entities of operation that
can be generate easily. These organisations contain multiple problems and are often responded to
it.
7

Innovation: According to the innovative plans where ideas which would be very
important for changes in decision making process is related to various products. This is very
simple action for any organisation to take this uncertainty as a business owner. This has its own
innovative decision.
Low overhead: Low overhead and expanses can be seen in small business as compared
to large enterprises. Major expenditure include electricity or power, purchase of raw materials,
manufacturing costs and compensation provided to employees.
Future growth: There can be huge opportunities for growth and development of small
business. For example, Microsoft started as a small scale computer and software company, now
established into one of the leading information technology organisation in the world. Thus,
through continuous innovation and improvement in quality of products and services, small
organisation can be convert into big and large enterprises.
Small businesses are playing essential roles in improvement or enhancement of
conditions of the community for both local and national region which is coming up with unique
ideas (Ligthelm, 2010). There can be different number of reasons which will define some
importance and needs of start-up and these small scale sector would contain following points:
 Producing and launching innovative goods and services for creativity.
 Fulfilling the wants and needs of an economic needs of the company.
 Formation of job requirement where there are certain opportunities.
PART 2
P5. Characteristic trait and skills of a successful entrepreneur
Entrepreneurs are those individuals who take risk by conducting any business activities
with hope of generating profits and revenue. For example we will take two successful
entrepreneurs those are Mark Zuckerberg and Bill Gates who posses unique and innovative ideas
that have changed the vision of society (Nga and Shamuganathan, 2010). Both would be having
best experience and talent for motivating enormous amount of workforce by working on specific
strategies and action plans. Their characteristic are as follows:
Planning Properly: It is considered as an effective characteristic of entrepreneurs in
which they would posses specific plan to work on strategies that assist them to deal with
obstacles and aid in convert them into opportunities.
8

Act Seriously: An entrepreneur needs to act seriously on the plans and strategies which
are made to achieve the set targets and goals. They must be disciplined towards their objectives
and act sincerely to accomplish those goals.
Risk Hedger: These entrepreneurs which are mentioned above have specific
characteristic which assist them to manage uncertainty and also control profit of company.
Self-Promoter: This is very essential characteristics which would be using
merchandising techniques which would use the goods for economic factor which is advertised at
global level. For example, sharing of views with relatives and business groups etc.
Passion: They are passionate in their working ethics and eager for fulfilling their goals in
every activity which they would fulfil in better manner. They should basically know about the
ways in which target problem should be solved in required period of time.
Positive sense of business: These people need to have a positive attitude among the
enterprise which is needed by them. They also know how to deal with critical circumstances.
Traits of both the entrepreneur are differentiated from each other where there would be an
outer and inner personality aspects which are unique.
P6 Personality of entrepreneur affect the motivation and mindset
Entrepreneurs are said to be those people who are basically responsible for taking some
kind of risk in the business because aspiring of success and opportunities in the market place,
they have to take chance of investing at any one point of time which may be beneficial or
harmful but all that would only depend on the situation, but if courage of taking chance is null
then there would be absolutely no possibility of getting success in future (Preuss, 2011). One of
the most famous entrepreneur Mark Zuckerberg who has actually inspired so many people and
dedicated them to follow him devotionally, has basically changed the concept of new ideas and
allowing people to think something out of the box. This would increase motivation among
people. There can be multiple ways in which audience could encourage with dialogues which are
spoken by these entrepreneurs:
Full sacrifice: Entrepreneurs would face such times in which there can be some kind of
problem which causes the person to sacrifice something for becoming an efficient human. It
would result in increasing of motivation in people which would be followed by the people in
approaching year. Bill Gates faced struggled in his life, enduring those struggle made him the
richest person in this world and Director of one of the biggest IT organisation.
9

Autobiography: All these factors which are related to these personality which are born
with a thought of changing the society mind-set that can be used for motivation of other people
to encourage them to so something that would be different career.
Improving in learning skills: Life of an entrepreneur which is actually based on certain
skills and knowledge that would be carried in the working life.
Family background: For any successful entrepreneur which is related to their personal
values which is shared with their parents to create some value to them.
In the starting stage of career Mark Zuckerberg face a lot of problem but his positive
mindset motivate him all the time to do something best. This help the Mark Zuckerberg in
learning form this mistakes which done in the past and form his failures also. In the absence of
positive mindset business owner fails to take the business risk. Further motivation of individual
influence him to accept the challenges come in the path of success. Positive mindset and
motivation both are the interlinked factors. Positive mindset of Mark Zuckerberg motivate him
to do the efforts on continuous basis.
P7. Background and Past experiences of an individual affect the process of entrepreneurship
For becoming a successful business man it is not really easy to increase the talent and
ability which can be carried out by any personality with some positive attitude (Sampaio,
Thomas and Font, 2012). Basically background and expectation for any individual plays the
most important role most of the time for choosing entrepreneurial qualities as a career. Main aim
of such factors is to actually provide some kind of motivation through useful comment that
would be able to give an edge to their career in this field for long run.
On contrary, past experience for an entrepreneur is very important which needs to be
faced with some characteristics:
 Increasing the learning ability for any person.
 Improves capability to deal and establishing quick and important decision making at vital
time.
 Risks in business should be tackled with proper care and guidance.
 Managing and controlling of large and small organisation.
 Extra talent should be there to accomplish goals for future and for long run.
 Ability of regulating and dealing with any kind of situation.
10

With proper experience and guidance from the family member and their support all the
negative aspects can be easily omitted and the future can be clean and clear (Storey and Greene,
2010).
Main factors which frame a background of an individual includes the following:
 Upbringing: All the conditions under which a person is brought up is come under this.
This teach the individual about what is right and wrong in the society and further assits
him in taking future decisions.
 Financial conditions: Financial resources which are available to family of an individual
also affect the style of his thinking and decision making process of him.
 Education: An individual learn basic knowledge from the education and get information
about the rules exist in the society.
All these factors of Mark Zuckerberg affect the style of his decision and make him a successful
entrepreneur.
CONCLUSION
As per above assignment it has been understood that small business and entrepreneur is
basically very helpful for a country and people of that nation to get benefits out of it. They are
responsible for economic growth of the country in various ways. Also in this report there is
mention of traits of any successful entrepreneur which a person should inherit to get success in
their field. A business man should be aware of all the risks which could be expected in the field
of business and only by this they can accomplish objectives and success.
11

REFERENCES
Books and Journals
Bridge, S. and O'Neill, K., 2012. Understanding enterprise: entrepreneurship and small business.
Palgrave Macmillan.
Burns, P., 2010. Entrepreneurship and Small Business: Start-up. Growth and Maturity. Palgrave
Macmillan.
Carland, J. W. and Carland, J. C., 2015. A model of potential entrepreneurship: Profiles and
educational implications. Journal of Small Business Strategy. 8(1). pp.1-14.
Dennis Jr, W. J., 2011. Entrepreneurship, small business and public policy levers. Journal of
Small Business Management. 49(1). pp.92-106.
Down, S., 2010. Enterprise, entrepreneurship and small business. Sage.
George, G. and Bock, A. J., 2011. The business model in practice and its implications for
entrepreneurship research. Entrepreneurship theory and practice. 35(1). pp.83-111.
Gorgievski, M. J., Ascalon, M. E. and Stephan, U., 2011. Small business owners' success
criteria, a values approach to personal differences. Journal of Small Business
Management. 49(2). pp.207-232.
Leitch, C., Hill, F. and Neergaard, H., 2010. Entrepreneurial and business growth and the quest
for a “comprehensive theory”: tilting at windmills?. Entrepreneurship Theory and
Practice. 34(2). pp.249-260.
Ligthelm, A. A., 2010. Entrepreneurship and small business sustainability. Southern African
Business Review. 14(3).
Nga, J. K. H. and Shamuganathan, G., 2010. The influence of personality traits and demographic
factors on social entrepreneurship start up intentions. Journal of business ethics. 95(2).
pp.259-282.
Preuss, L., 2011. On the contribution of public procurement to entrepreneurship and small
business policy. Entrepreneurship & Regional Development. 23(9-10). pp.787-814.
Sampaio, A. R., Thomas, R. and Font, X., 2012. Small business management and environmental
engagement. Journal of Sustainable Tourism. 20(2). pp.179-193.
Storey, D. J. and Greene, F. J., 2010. Small business and entrepreneurship. Financial
Times/Prentice Hall.
Online
12

What is Entrepreneurship?. 2017. [Online]. Available through:
<http://www.businessnewsdaily.com/2642-entrepreneurship.html>. [Accessed on 28th
August 2017].
Impact of micro business on economy. 2017. [Online]. Available through:
<http://ec.europa.eu/growth/smes/business-friendly-environment/performance-review-
2016_en>. [Accessed on 28th August 2017].
13