Small Businesses and Entrepreneurs in the UK: Impact on Economy and Growth

This report covers small businesses and entrepreneurs in the UK, their impact on the economy, and growth variables. It discusses different types of entrepreneurship ventures and the differences between small, medium, and large businesses. It also highlights the importance of small businesses and start-ups to the growth of the social economy.

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Table of Contents
Introduction..............................................................................................................................2
Conclusion..................................................................................................................................9
References...............................................................................................................................10
List of Figures
Figure 1: Contribution of businesses in employment and turnover....................................4
Figure 2: SMEs in various sectors..........................................................................................5
List of Tables
Table 1: Similarities and differences between entrepreneurship ventures.........................3
Table 2: Difference between small, medium, and large businesses.....................................7

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Introduction
This project covers small businesses and entrepreneurs. Small businesses may boost an
economic growth. These businesses create jobs and boost income. Tourism, IT, and
technology offer jobs and boost any nation's economy. Several variables impact small
businesses. This report is about small businesses in the UK. Its major objective is to identify
tiny startup growth variables. The function of a SME entrepreneur will also be discussed.
There are different types of entrepreneurship ventures out there. These are-
Social Enterprises
Scalable Entrepreneurial Venture
Large Company Entrepreneurial Venture
Small Entrepreneurial Venture
Lifestyle Entrepreneurship
Innovative
Entrepreneurship
a. Entrepreneurship venture types and relationship between typology of entrepreneur
Entrepreneurs create and operate tiny businesses with minimal resources, taking risks and
reaping rewards. Entrepreneur enterprises are operated by individuals or groups to provide
superior services. Administrators lead local and global programs. Individuals or groups may
launch numerous entrepreneurial enterprises. Then:
Social Enterprise: Social enterprise aims to create new goods for social benefit. It's not
profit- driven. This initiative aims to help society. These companies provide social services.
Their main target is to render services which will decrease or eliminate social problems It's a
non- profit since it doesn't make money. They're found throughout the UK.
Scalable Entrepreneurial Venture: It draws investors with innovative ideas. Innovative
scalable startup. Vision to provide people something fresh and transform world. It recruits
seasoned experts since it has a global goal. High growth prospects. Silicon Valley
entrepreneurs programs1 must be implemented to provide administrators a platform to
discuss ideas. Such businesses provide customers unique and inventive items. In the UK, new
business concepts and technologies have emerged. Large company entrepreneurship focuses

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on firm expansion.

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Large company Entrepreneurial Venture: This type of entrepreneurship focuses on firm
expansion. Entrepreneurs deliver high-quality goods and services to customers. Through it,
they want to boost their businesses' earnings and sales. This enterprise cares about market
competitiveness and is always competitive. To get additional consumers, they buy new
companies and create new product strategies. Its kind is a major target market firm.
Similarities and differences between entrepreneurship ventures
Factors Social
enterprises
Scalable
ventures
Large company
ventures
1 Goal
& Objective
To serve the
people in need
To provide
innovative
products to
achieve high
profitability
To sustain in the
business and
maximize
wealth of the
company
2 Risk Low risk High risk Average risk
3 Structure Trustee based Corporation and
partnership
Complex
organizational
structure
4 Profitability Measured on
solving particular
problem that
affects society.
Measured on
profits based on
monetary return
Measured on
profits based on
monetary return
5 Customer
Interaction
Personal/
Electronic
Personal/
Electronic
Electronic
6 Ownership Single
organization or
society
Single or
multiple
entrepreneurs
Thousands of
shareholders
Table 1: Similarities and differences between entrepreneurship ventures

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b. Impact of small businesses on the economy of UK
Micro Business: Micro business is a kind of small loan that enables persons with little or no
security, repayment capacity, money, or work experience to start their own companies. Small
local businesses frequently find that these loans are just what they need to begin going.
Enterprises like this frequently offer an item or service to the local community, which greatly
aids in raising the standard of living for individuals from developing nations. Both the
company owners' and the community's standard of living may benefit from micro enterprises.
They may increase disposable money and employment opportunities.
Small Business: This is the most typical company start-up. Tiny grocery businesses, travel
agencies, car painters, storefronts, etc. are created to generate money and feed people. UK has
many tiny businesses. They don't make enough to feed their family. Entrepreneurs want low
earnings and market shares. Initially. They use family money to establish a business and
recruit locals to service consumers. In this form of company, proprietors undertake surveys to
determine customer demands. Its typology is to provide daily necessities of the family from
the business.
Impact of Micro business on economy
In recent years it has been seen that micro businesses had a great influence over the total
economy of UK.
Contribution of businesses in employment and turnover
Figure 1: Contribution of businesses in employment and turnover

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From the graph we can see that, the numerical figure of micro and small business is way
higher than that of medium and large businesses. Micro businesses provide highest
employability, and the number is 47.8 %. It also earns the second highest turnover as the
figure is 36.8% which is 11% less than the large companies.
Rise of SMEs in industrial sectors
Figure 2: SMEs in various sectors
According to the graph we can say that SME is operating heavily in the construction sector
and according to the data the number is nearly 1 million having 18% in total followed by
Professional, scientific, and technical activities and wholesale, retail sale of motorbike sector
having the number of 15% and 9% accordingly.

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c. Differences between small, medium and large businesses and their contribution to
the economics
Small Business
Small business is the usual startup. Small food stores, travel offices, car painters, and shops
are developed to feed people. Many UK firms are small. Their income is insufficient.
Entrepreneurs want modest profits and market shares. Initially. They start a company using
family money and hire locals. This kind of firm conducts consumer surveys. The firm
provides family needs. In small business the number of employees is less as usual.
Medium businesses
The majority of medium-sized businesses have multiple owners or shareholders. These
businesses can be of any variety, including customer service, transportation, wholesalers, and
manufacturers, among others. The primary objective of these industries is to provide the
highest quality services to their customers while generating a substantial profit. Principal
sources of working capital are the owners' or shareholders' personal savings or short-term bank
loans from private investors. They can expand rapidly and effectively due to the adaptability of
their industry structure and their ability to respond to the market's clients' needs. In a medium-
sized business, 250 employees can be the maximum.
Large Business
Large businesses may have their headquarters in one country yet have activities in more than
one. They are often structured in the form of departments, including finance, human
resources, marketing, sales, and research and development, among others. Large corporations
typically keep their tax burdens separate from those of their owners. This is because large
corporations' owners typically do not manage their businesses; rather, the majority of
business decisions are made by an elected board of directors. Small and medium-sized
businesses are owned by an individual or group of individuals.

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Difference between small, medium, and large businesses
Category Small Business Medium Business Large Business
Ownership Independent owner
or partnership
Multiple partners
and stakeholders
Thousands of
shareholders
Flexibility Flexibility is high Flexibility is
medium
Flexibility is very
limited
Planning Short time Short/long time Long term
Professional
growth
Limited scope in
personal
development
Key employees
can avail personnel
development
Chances of
professional growth
is very high
Source of Finance Owners Partners,
shareholders, small
loans
Bank, reserves,
shareholders, private
investors, retained
profit
Number of
Employees
Up to 20 employees Maximum 250
employees
1000 or more
employees
Table 2: Difference between small, medium, and large businesses

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d. Importance of small business and start-ups to the growth of economy
Social economy: It is common practice to consider the social economy to be a distinct third
sector in mixed capitalist economies, separate and apart from the public and private sectors.
Activities that are cooperative, not for profit, and voluntary rather than paid ones are what
make up the foundation of the social economy. These activities may be found inside
communities, across national economies, and worldwide. It has a lengthy history that
coincides with the advent of market economies and is referred to in a variety of different
ways as the nonprofit sector. An anarchist collective is an anarchist collective that was
founded by anarchists.
Impact of small businesses and start ups in the growth of the social economy
Employment opportunity
Small and start-up businesses develop skilled and semi-skilled people for future industrial
and company growth. Low unemployment helps the UK economy. These people get work
based on their skill set and earn accordingly.
SMEs employ 16.3 million people, 60% of all UK employment. In the previous 5 years,
SMEs produced nearly 2 million employments. SMEs are extremely vital to the local
economies of Southern and Western part of England, Wales, and Northern Ireland, where
they account for 70% of private sector employment. Small firms are very good at supporting
local industries; they provide development, prosperity, and innovation to places outside of
our big cities, which equalizes both wealth and income.
Innovation
In the current environment, traditional businesses lack the scalability of modern enterprises.
Innovation is one of the factors contributing to this phenomenon. Innovation aids the
company's ability to compete in this highly competitive market. Through innovation, a
company can easily identify market trends, and technology assists them in meeting market
demand. Innovation makes a business highly adaptable and able to move with the market. By
implementing innovative ideas, a company is able to improve the product or service they offer,
be highly responsive, reach new markets easily, and introduce new service or product, thereby
altering the customer's perception of their service.

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Stable social economy
Small businesses tend to be more resilient during economic downturns because their owners
are more in tune with their customers' wants and requirements and the particulars of their
own neighborhood. These days, small and medium-sized enterprises (SMEs) make up at least
99.5% of the companies in every single major economic sector. The government of the
United Kingdom has recognized that small and medium-sized enterprises (SMEs) are
important to the economy and may hold the key to reversing the recent decline in
productivity. As a result, there has been a rise in the amount of money set aside to assist small
enterprises. If you operate a company and could use some guidance or if you're an aspiring
entrepreneur looking for a loan, there are a number of programs that might be helpful.
Conclusion
SMEs and startups currently play a significant role in the UK economy. This sector has
provided the most employment opportunities for indigenous people while generating the
second-highest economic growth. The government is also encouraging entrepreneurs by
creating policies and an environment conducive to business. The consumers also benefit from
the availability of a variety of goods and services. Long-term, SMEs contribute a steady
increase to GDP.

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References
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