Importance of Small Businesses and Start-ups for Social Economy

This essay discusses the impact of small businesses and start-ups on the social economy. It covers the definition of small businesses, data on micro and small businesses, and the role of organizations like co-operative insurance, funeral care, Oxfam, and cooperative societies in the growth of social economy.

Running head: Essay Assignment
Essay Assignment
Name of the student
Name of the University
Author note

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Introduction
The purpose of this unit is to give an understanding of the concept of enetrepreunership.
The whole course of the unit covered different aspects of entrepreneurship ranging from
entrepreneur to entrepreneurial ventures and so on. Thus, it is justify sating that from one a
thorough knowledge of business and entrepreneurship can be gained upon successful
competition of the unit.
Q1. Examine different types of entrepreneurial ventures and explain how they relate to the
typology of entrepreneurship
i. Definition of entrepreneur venture
As per Carlsson et al. (2013), the term or concept entrepreuneurial venture refers to the
idea of an organization which gives special attention on innovation and opportunism in an
attempt of generating social as well as economic value. The main factor which defines the
concept of entrepreneurial venture is innovation. On the other hand, the other most important
factor of entrepreneurial venture is that this concept challenges the conventional theory of
business. However, the concept of entrepreneurial venture has a strong correlation with
characteristics entrepreneur.
ii. Examine/ inspect thoroughly, entrepreneur ventures that fall in the categories below
in order to determine their nature or condition.
The entrepreneur ventures can be classified into four types that are small business
ventures, scalable start-up ventures, large company ventures and social entrepreneurial ventures.
Small business ventures

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Mainly grocery stores, consultants, e commerce storefronts, hair dressers, travel agents,
electricians, carpenters, plumbers, etc fall under the category small business ventures. These
kinds of ventures are run and owned by any persons (Morris et al. 2018). In addition, these
entrepreneurs hire local employees or mainly the family members in order to assist in the
business process. These ventures do not aim to become a million dollar business, instead they
run the ventures in order to feed their family while securing a limited margin of profit. For the
purpose of funding, these entrepreneurs rely on friends, family members and small business
loans from different sources.
Scalable Start-up ventures
The Silicon Valley entrepreneurial ventures are the idea example of start-up ventures.
According to Kuratko, Morris and Schindehutte (2015), these scalable start-up ventures
generally start their business operation with a vision of changing the world. They generate
investments from the same kind of investors who wants to bring change like the venture
capitalists. In order to operate their business operations, the best professional are hired who
generally look for a scalable as well as repeatable business models based o which more
expansion depends on.
Large company ventures
The large company mostly grow adopting the disruptive innovation offer new products or
services that are different from their usual products (Morris et al. 2018). Not only that,
addressing new market requirements the large companies mainly create new product range for a
completely new customer base within a new market. These ventures either adopt disruptive
innovation in its product range or they acquire innovative ventures.

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Social entrepreneurial ventures
As per Kuratko, Morris and Schindehutte (2015), the social ventures are focused on
creating products and services which would fulfil a social purpose. More than drawing profits,
the social entrepreneurial ventures aim to contribute to the society making it a better place to
live.
iii. After giving examples and discussing the ventures above, you are then required to relate it to
the ventures below which are classified as the typology of entrepreneurship. Explain how the
above are consistent (relate) or inconsistent with the ones mentioned below.
 Lifestyle Firms
The lifestyle business or firms mainly aim to provide support to the owner in sustaining
the balance between his personal life and his professional life more than maximizing revenue
(Kuratko, Morris and Schindehutte 2015). Hence, the type of the firm or business depends upon
the personal choice of the business owner so that beside of making profit he can enjoy the work.
Thus, it can be seen that the small businesses fall under the category of lifestyle firms since the
entrepreneurs of small businesses keep a small profit margin do not aim to become million dollar
business.
 Survival Firms
Unlike the lifestyle firms, the owners of small firms run their businesses in order to earn
their livelihood. While the entrepreneurs of lifestyle businesses run their businesses based on
their choice and likings, the owners of survival firms are driven by the need of income (Morris et
al. 2018). Mostly it is seen that the entrepreneurs are plumbers, grocery shop holder and so on.

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These business entrepreneurs struggle for the purpose of investment. Hence, the small business
ventures are the part of the survival firms or businesses. The social entrepreneurial ventures also
fall under this type since their purpose is not making profit rather to contribute to the good cause
of the society. Thus, these social entrepreneurial ventures are often seen to be struggling with
lack of funding.
 Managed growth firms
The managed growth firms or businesses are those companies that grow faster than other
companies in the same industry. These firms generally focus on generating revenue at a rapid
pace so that they can scale up their businesses in a rapid manner (Kuratko, Morris and
Schindehutte 2015). Thus, it is seen that these characteristics can be related with the scalable
start-up businesses as these businesses or firms focus on the idea of bringing a change in the
world while assuring a rapid growth of the business.
 Aggressive growth firms
Aggressive growth firms refer to the businesses which are already established and follow
a rapid growth strategy either by product diversification or by disruptive innovation or by some
other strategy th7roeugh which maximum number of customer can be targeted aiming to achieve
a large scale of profit (Morris et al. 2018). Therefore in order to align this type of
entrepreneurship, it is seen that the large company ventures fall under this category since these
they adopt aggressive approach towards the growth.
(Q2) Explore the similarities and differences between entrepreneurial ventures.

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While there are certain similarities between the entrepreneurial ventures, certain
differences also can be evidently seen.
Small business ventures Scalable Start-up
ventures
Large company ventures Social entrepreneurial
ventures
The small business
ventures are concerned
with earning nominal
amount of money so
that basic needs will be
fulfilled.
The small businesses
hire people within the
local circle.
The small businesses
ventures rely on the
family funding and
other small business
loans for the purpose of
funding.
The scalable start-up
ventures are the
businesses that aim to
generate a large amount
of revenue at a rapid
pace.
The scalable start-up
ventures hire the best
professional.
The scalable start-up
ventures generate
funding from similar
venture capitalists who
aim to bring change.
The large company
entrepreneurial ventures
focuses on aggressive
growth strategy with an
aim of accelerating the
profit margin at a rapid
manner.
The large company
ventures like the
scalable start-up
ventures hire the best
talents.
For the purpose of
funding, the large
company ventures tie up
with large banks and
The social
entrepreneurial ventures
instead of focusing on
profit, aim to serve
towards the good cause
in the society.
Mostly the social
workers, philanthropists
join the social
entrepreneurial ventures
enthusiastically without
having any desire of
gaining profit.
The social
entrepreneurial ventures
are primarily depended
on donations and
financial assistance
from both the

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Grocery shop holders,
plumbers, carpenters,
etc are the example of
small business ventures
who aim nominal profit.
The businesses in
silicon valley are the
examples of scalable
start-up ventures since
they bring unique
concepts in the business
sphere.
other investors.
The large companies
like Coca-Cola are the
example of large
company ventures as
these companies adopt
disruptive innovation in
order to accelerate their
business growth.
institutional source and
individual sources.
The non profit
organizations who
mainly work for the
well being of the people
of the society are the
examples of social
entrepreneurial
businesses. In addition,
the profit organization
with a purpose of
contributing to the
society can also be
considered as the social
ventures.
Source: (Madsen 2013)
Q3) Investigate a diverse range of entrepreneurial ventures to demonstrate understanding of
entrepreneurship in the public and corporate sector
As per Kuratko et al. (2015), a corporate sector entrepreneurship refers to the type of
business who holds the part within the economy and operates business in order to make profit.
The corporate sector businesses do not have the ownership of government. On the other hand,
Leyden (2016) opines the public sector entrepreneurships are either affiliated to government or
enlisted as the property of government. The public sector entrepreneurships mainly provide the

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services of government and make themselves available in the stock markets. A perfect example
of public sector entrepreneurship can be 3M. The company is well known for manufacturing as
well as offering the products like waterproof sandpaper, scotch bands and tapes, sand papers and
so on. The company is considered as public sector entrepreneurship since they sell their company
shares over the stock market. The number of shareholders that 3M has is large in numbers. The
major shareholder of them is The Vanguard Group Inc. as it possesses 45,793,887 shares. On the
other hand, a good example of corporate sector entrepreneurship can be the W. L, Gore. The
company is considered as a multinational manufacturing company of fabrics. The business
operation of the company is operated privately in Newark of Delaware, where the headquarter of
company is located. The company allocated 10% of daily working hour to the employees so that
they can think of new ideas and can give their best efforts to their personal projects.
Thus, from the above analysis, it can be seen that the entrepreneurs do not indulge in
doing business by communicating the customers directly. The role of entrpruenuers is to bring
innovation in product range as well as in the service so that the target market and the target
customers can be benefitted (Burns 2016). In this regard, the name of Dr Spencer needs to be
mentioned since his making of an adhesive was suitable for the use in Aerospace. This incident
denotes the innovation aimed to bring change even if it was done accidentally. Meanwhile, the
employees of W.L. Gore are also considered entrepreneurs since they are given a certain time
from their daily working hours in order to think of new ideas.
(Q4) Interpret and assess relevant data and statistics to illustrate how micro and small
businesses impact on the economy.
i. Define a small Business

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As per Storey (2016), pprivately owned as well as operated businesses with limited
number of resources are regarded as small businesses. There are certain characteristics which
determine a small business. Such as, a small business has maximum of 500 to 1500 employees if
the company is in manufacturing site. However, in wholesaling, the number of employees
generally ranges from 100 to 500. The small businesses are generally growing businesses.
ii. Collect data (on employment, turnover, assets, growth etc.) on micro and small
businesses and demonstrate how they are impacting on the growth of the UK
economy
The small businesses impact on the economy of United Kingdom to a greater extent
contributing 47% revenue to the economy of the country. The small businesses occupy a large
part of the UK economy boosting the growth of economy of the country to a considerable
manner (Cowling et al. 2015). Majority of the businesses of the United Kingdom are small and
medium by size. The employee structure of those businesses is less than 250 people with
combined average annual turnover of $1.9 trillion which makes up 51% private sector turnover
in the country. The entire small business sector increases at the rate of 4% averagely (Cowling et
al. 2015). Hence it is seen that the growth of small business in the country boosts the rate of
employment in the country as a large amount of people are being hired by the small businesses.
(Q5) Explain the importance of small businesses and business start-ups to the growth of the
social economy
-Consider the role of organisations like co-operative insurance, funeral care, Oxfam,
cooperative societies etc. to the growth of the social economy.

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The term social economy are generally comprises of cooperative, non-profit and
voluntary organizations that are distinct from private and public sectors. A large number of small
businesses fall under the organization that has a social cause to serve (Autio et al. 2014). Over
the past few years a massive growth of the companies that are non profit or with less profit
margins have been seen. The organizations like cooperative societies with only female
employment are seen to be growing since these kind of organizations give employment
opportunity to the under privileged women while assuring growth of the social economy.
According to Goss (2015), the organizations like non profit organizations are in rise all over the
world with a core social mission. A wide range of organizations inclusive of social enterprises or
community enterprises, self-help organizations, social or community finance co-operative
finance organizations have been creating a large number of employment opportunities assuring
the growth of social economy. The organizations under social economy does not only create job
opportunities but create better job opportunities which are way more different from regular 10 to
6 job roles. Employees involved in organizations like non profit worldwide organization Oxfam
work closely with the people at ground level and their daily life issues (Goss 2015). It is seen an
average of 21% young graduates join non profit organizations or cooperative organizations in
order change the social scenario by elevating the status of the unprivileged people.
(Q6) a Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics
Distinguish between small, medium and large size businesses.

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 The contribution of small businesses towards the development of the economy may be
greater than medium and large. Evaluate the contribution of each of them (small,
medium, large) and support your argument with relevant data.
Small businesses Medium businesses Large businesses
In small businesses, the founder
or founder’s family hold the
equity.
In medium businesses, the
owner privately holds the equity
primarily. However, sometimes
equity is also held in share.
In large businesses, equity is
held by primarily the private
investors.
The managerial process is
looked after by the owner of the
business.
In large business, the owners
along with other associate
professionals operate the
managerial practices.
In large businesses, there are
several mangers or
professionals in every
department to look after the
managerial operations.
In small business, decisions are
made by the owner of business.
In medium business, important
decisions power is distributed
among the owner, CEO and
other professionals in higher
positions.
The decision making process is
distributed within the
organizational hierarchy in the
large business.
The owner takes short term
business plans.
Both long term and short term
plans are taken the executives
and the owner.
Extensive long term plans are
determined by particular teams.
In small businesses, capital is
generated from personal source
of the owner.
In medium businesses, sources
for capital are either bank loans
or the personal sources.
In large businesses, there are a
wide range of sources to fund
the business operations.
The customer base of small The customer base of medium Most of the large business

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business is small. business range from small to
medium, limited to the
geographical boundary.
operate in more than one
market, mainly in the
international markets.
Source: (González-Benito, Muñoz-Gallego and García-Zamora 2016; Berisha and Shiroka
Pula 2015)
The small and medium size businesses contribute to the economy of United Kingdom by
28% revenue. On the other hand, large businesses contribute to the country’s economy by 49%
(Cowling et al. 2015). It is largely considered that smaller and medium size businesses make the
economy stronger than the large companies since individually they generate more revenue and
more employment opportunities.
(b) Provide a critical examination of the impact of small business on different levels of the
economy including local, regional, national and international.
The impacts of small business are significant in creation of job opportunity, providing
support to the community as well as entrepreneurship. In the local level, the major contribution
of small businesses is job opportunities. In a country like UK which has unemployment rate
4.4%, small businesses help the economy by creating job opportunities for people of the country
(González-Benito, Muñoz-Gallego and García-Zamora 2016). As seen, getting job in small
businesses is way easier than getting a job in large companies. Hence, the recruitment rate in
small businesses is greater than the recruitment rate in large companies as small businesses are
focus more on productivity and will than excellence which remains on the focus of large
businesses while recruiting (Autio et al. 2014). In the regional level, the contribution of small
businesses since it strengthens a region’s economy by making up new industries in a region. For

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example, the content writing is a growing industry even if it is a new. Being a new industry,
content writing field experience a huge employment flow with a high revenue rate.
(8) Critically examine the scope, development and growth of entrepreneurial ventures.
Assess in-depth how, micro and other small businesses have contributed towards the growth and
development of GDP, number of small businesses created, new products and brands, technology
and R&D investment, innovations, social initiatives, capital attractions and investments etc.
Address how some of these factors mentioned above have made these entrepreneur ventures to
increase and grown in size.
The majority of the businesses around the world are mainly small. Many small businesses
rise only with workforce of as fewer as 10 people. The structure of these businesses might be
small but the impacts of those businesses are significant in the growth of economy (González-
Benito, Muñoz-Gallego and García-Zamora 2016). The main way through which small
businesses accelerate the GDP growth is encouragement of innovations and new inventions, and
being innovative the products manufactured by small businesses experience high sales margin
(Hall et al. 2014). As a social initiative, small businesses give opportunity of becoming financial
independence to the people (Autio et al. 2014). Since, these companies recruit people through
easier way than the large companies, presently the number of small businesses is high and the
sole reason is high employment opportunity (Wong, Ho and Autio 2015).
ESBM GUIDE Task 2

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Q1 Determine and analyse the characteristic traits, skills and motivational drivers of successful
entrepreneurs that differentiate them from other business managers, supported by specific
examples
Define entrepreneur
According to Poschke (2013), rather than being an employee, an entrepreneur is a
business individual who establishes a small business with an innovative approach while taking
risks and assuming rewards.
Provide an analysis of different characteristics of successful Entrepreneurs that make them
standout.
 The main characteristic of a successful entrepreneur is the ability of taking risk (Gartner
2016).
 Self confidence or having belief on himself makes an individual a successful entrepreneur
(Brockhaus 2013).
 The ability of thinking different is another trait of a successful entrepreneur (Gartner
2016).
 An entrepreneur becomes successful when he manages the resources wisely. Hence
management skills are the essential quality of a successful entrepreneur (Brockhaus
2013).
 A clear vision and flexibility of working under any circumstances are other essential
attributes without which an individual cannot become successful entrepreneur (Gartner
2016).
Difference between characteristics of successful Entrepreneurs and Managers

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 According to Busenitz and Barney (2017), while a manger is responsible for controlling
and managing administrative activities of an organization, an entrepreneur is the founder
of a whole business while taking risks.
 The focus of an entrepreneur remains on establishing a business successfully whereas the
focus of a manager remains on the business operation.
 An entrepreneur remains focused on innovation and creativity whether for product or for
service providing. However, manager remains focused on maintain sustainability by
managing different aspects.
Q2. Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation and
mind-set
A crucial aspect of entrepreneurial personality is the passion of bringing something
innovative, a pull factor, rather than making profit at a large scale (Segal, Dan and Jerry 2015).
One of the main motivations for an enetrepreuner is the owning a business than being a mere
employee which are considered as push factor since it drives an individual to become
entrepreneur. An entrepreneur always seeks to showcase his innovative idea by making it
practical (Shane, Locke and Collins 2013). Hence the indomitable will is another essential
feature of entrepreneurial personality motivating towards entrepreneurial venture.
(b) Explore and examine different lines of argument relating to entrepreneurial characteristics
-Nature or Nurture – according to social psychologists, entrepreneurs are born rather than made.
An entrepreneur is born with the indomitable will of bringing change which is difficult to
incorporate within someone to make himself an entrepreneur (Wadhwa et al. 2016).

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-Effects of previous experience an individual’s experience as manager or leading professionals
make him able to have more clear vision with practical approach (Bolton and Thompson 2013).
-What they value – the main thing that an entrepreneur values is innovation or creativity
distinctive from the general, traditional approach of doing business (Wadhwa et al. 2016).
Give examples: The most appropriate example of successful entrepreneur is Walt Disney who
brought the innovation of animation in the world of entertainment (Wadhwa et al. 2016).
Q3 How can background or experience Hinder or Foster Entrepreneurship?
Background plays a main role on making a person entrepreneur. On the other hand, it
also becomes a crucial factor in failure of a person to become entrepreneur. For example an urge
of elevating the social status from poverty drive one to become an entrepreneur (Bornstein
2017). On the other hand, low self esteem makes a person disable to become entrepreneur.
(Q4) Critically evaluate how background and experience influences entrepreneurs, both
positively and negatively, by comparing and contrasting examples.
 Explore and discuss how people’s background and experience (e.g. poverty,
unemployment, school drop outs, Push and Pull factors) hindered or fostered
entrepreneurship. Give examples of entrepreneurs and their unique background.
Steve Jobs, the founder of Apple was born with an indomitable will in a poor
family. Jobs had to discontinue his education due poverty. He was a college dropout who
brought revolution in the computer science sphere (Kuratko 2015).

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On the other hand Walt Disney was initially terminated by his boss for not having
innovative ideas. However, later the innovative idea of the person gave birth to the world
famous ‘Walt Disney World’ (Bornstein 2017).
Provide examples of 3 successful Entrepreneurs. Your example should include:
Local Entrepreneur- Tara Lee de Wit preferred owning a placement agency instead of owning
a working a as a recruiter in a company (Bolton and Thompson 2013).
International Entrepreneur- Larry Page secured his name in history by making world’s no.1
search engine (Bornstein 2017).
Social Entrepreneur- Muhammad Yunus received Nobel Prize for his creation of Grameen
Bank what aims to empower villagers (Bolton and Thompson 2013).

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References
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The importance of context. Research Policy, 43(7), pp.1097-1108.
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review. International Small Business Journal, 13(1), pp.98-113
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Routledge.
Bornstein, D., 2017. How to change the world: Social entrepreneurs and the power of new ideas.
Oxford University Press.
Brockhaus, R.H., 2013. The psychology of the entrepreneur.
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dynamics. International Small Business Journal, 33(5), pp.488-513.

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Gartner, W.B., 2016. “Who is an entrepreneur?” is the wrong question. American journal of
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