Entrepreneurship and Small Business Management

This document explores the different types of entrepreneurial ventures, their similarities and differences, and the impact of SMEs on the economy. It also discusses the characteristics, traits, and skills of successful entrepreneurs.

ENTREPRENEURSHIP
AND SMALL BUSINESS
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Examination of different types of entrepreneurial ventures.................................................1
P2. Exploration of similarities and differences between entrepreneurial ventures.....................3
TASK 2............................................................................................................................................5
P3. Interpretation and assessment of statistics to measure impact of SMEs on economy..........5
P4. Explanation of importance of small businesses and start-ups on growth of social economy
.....................................................................................................................................................7
TASK 3............................................................................................................................................7
P5. Determination of characteristics, traits and skills of successful entrepreneurs.....................7
P6. Assessment of how aspects of entrepreneurial personality reflect entrepreneurial
motivation and mindset...............................................................................................................8
TASK 4............................................................................................................................................9
P7. Examination of how background and experience can hinder or foster entrepreneurship.....9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Entrepreneurship refers to a combination of activities and processes which are taken by
an individual in order to manage and run their own business enterprise. Furthermore, this activity
is required to be appropriately performed as there are risks involved in order to make higher
profit from the venture (Volery and Mazzarol, 2015). The report below is based on the case study
based on how Brexit has an impact on the Small and Medium Enterprises (SMEs) in the UK and
effective contribution of these companies within the UK economy. Hence, the report addresses
exploration and illustration of range of venture types that might be considered entrepreneurial.
Furthermore, it includes assessment of impact of small business on the economy. In addition, the
report also mentions determination and assessment of key aspects of an entrepreneurial mindset.
Along with this examination of different environments that foster or hinder entrepreneurship is
also included within the report.
TASK 1
P1. Examination of different types of entrepreneurial ventures
Entrepreneurial venture refers to all the types of ventures which are appropriately and
effectively formed to serve different purposes. In addition to this, an entrepreneur is an
individual who is responsible towards, starting and managing the ventures. Hence, there are
several different organisational ventures that are appropriately explained and evaluated below:
 Small Business Entrepreneurship:
These are very small businesses, which have employees within limited quantity and there
is a very limited and constrained flow of finances within the company. It might include
groceries, hairdressers, etc., which usually has only few employees other than the entrepreneur
themselves. One such example of a small business within the UK is Marshfield Bakery, which is
a small bakery of small management team and deals in home made products within the UK (The
best small companies with a turnover of up to £10m in the UK, 2019).
 Scalable Start-up Entrepreneurship:
Within this type of entrepreneurial ventures, entrepreneurs have a vision that has likely to
have a potential of changing the world. Furthermore, the approach investors, such as venture
capitalists, who could support their idea and are high risk taking. One such scalable start-up
entrepreneurship, which currently has its impact in UK markets is Bulb, which is an energy
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organisation providing people with 100% renewable electricity within the UK (10 of the UK’s
fastest growing startups, 2019).
 Large Scale Entrepreneurship:
As the name suggests, these entrepreneurial venture operate on a very large scale, which
have high investment towards sustainable innovation and new product development. In addition,
they are very much consistent in adapting towards the market changes and create products that
satisfy the demand of customers globally. One prominent example of one such Entrepreneurship
is British Airways, which provides its aviation services globally.
 Social Entrepreneurship:
It is an entrepreneurial venture which is associated with creation of products and services
which solve social needs, as well as problems. Furthermore, the agenda of these ventures is to
appropriately create benefit for the society as part of their Corporate Social Responsibility,
Gravity Light within the UK is an appropriate example of social entrepreneurial venture which
provides lights and lanterns to individuals which would be apt enough to replace harmful
kerosene lamps (Five British Social Entrepreneurs Set To Change The World, 2019).
In addition to this, all these entrepreneurial ventures relate to several typologies which are
discussed below: Serial Entrepreneur: These are the entrepreneurs which starts new businesses frequently
and comes up with new and appropriate ideas. They focus on high innovation and possess
an evident propensity for risk. This is because their risk taking nature converts failures
into opportunities. These could be linked with scalable start-up entrepreneurship as the
nature of venture is very much aligned with that of this entrepreneur. Social Entrepreneur: These individuals are inclined towards social benefit and motivated
by the need of helping others. Hence, such individuals could be linked appropriately by
social entrepreneurial venture, which are also formed to ensure benefit in the society. Female Entrepreneur: These are the ones who formulate and manage an entrepreneurial
venture and are responsible towards managing the venture in a stable manner rather than
taking risks. Moreover, small businesses these days are witnessing appropriate and
effective rise in female entrepreneurs as they are creative and innovative in their ideas
which could be turned into massive profits.
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 Male Entrepreneur: These individuals are highly inclined towards taking risks and are
innovative, which helps them in earning high profit. Hence, this could be related to large
enterprises, which require heavy investment, high risk and innovation.
 Lifestyle Entrepreneurs: These are the ones who start a venture to alternate their
lifestyles and not for the purpose of profits. Hence, this could be linked with both social
and large scale businesses as the motive is not necessarily be monetary benefit (Saleem,
2017).
P2. Exploration of similarities and differences between entrepreneurial ventures
As per the above analysis, it is quite evident that all the types of ventures are very much
different yet similar to one another. Hence, their differences and similarities are explored below:
Differences:
 Scalable Start-ups and Social Entrepreneurial Venture
BASIS
SCALABLE START-UPS
(SERIAL
ENTREPRENEURSHIP)
SOCIAL
ENTREPRENEURIAL
VENTURE
(LIFESTYLE
ENTREPRENEURSHIP)
Motive
One of the major motives of
start-ups is to appropriately
and effectively earn higher
profit by taking high risk
towards a particular idea.
Profit is not the motive when
an individual is a lifestyle
entrepreneur. They commence
the business for changing their
lifestyle, where social welfare
could be one prime objective.
Ideology
The reason of existence of a
start-up is basically an
innovative and unique idea
which could induce a major
difference globally.
The ideology of social
entrepreneurial venture is
basically related to welfare to
individuals, communities and
soceities.
 Large and Small Scale Entrepreneurship
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BASIS
SMALL SCALE
BUSINESSES
(FEMALE
ENTREPRENEURSHIP)
LARGE SCALE
BUSINESSES
(MALE
ENTREPRENEURSHIP)
Risk Taking
Female Entrepreneurs in
small-scale businesses does
not take immense risks to earn
higher profits, rather they
promote stability in their
business to gradually enjoy
success and higher revenue.
Male Entrepreneurs within
Large-scale businesses take
effective yet calculative risks
which help them in expanding
their venture in a limited
period of time.
Scope
Small Scale businesses have
limited scope for an evident
amount of time, as the risks are
low and expansion of
operations is quite stable.
In context of Large Scale
business, the scope is
comparatively wide. Reason
for the same is that to achieve
higher returns, severer risks
are taken, which aids them in
enhancing their operations.
Similarities:
Apart from differences, there are several similarities in all the types that are mentioned
below. A few appropriate pointers are mentioned below: Scalable Start-ups and Social Entrepreneurial Venture
▪ Employment Opportunities: One particular point of similarity between start-ups
and social entrepreneurial ventures is that both the types offer individuals with
employment opportunities, which contributes in GDP levels of the organisation.
▪ Passion: One particular similarity between the type of entrepreneurs within these
ventures is that both the types of entrepreneurs are driven by passion, where the
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context of channelising the same might be different, but yet passion is one of the
major driving force towards success (Ratten, 2016). Large and Small Scale Entrepreneurship
▪ Profit: One of the major similarities between these entrepreneurship is that both
are driven towards earning profit, which is a major reason for its success.
▪ Innovation: Both male and female entrepreneurs driving this aspect are inclined
towards innovation to drive their companies forward.
TASK 2
P3. Interpretation and assessment of statistics to measure impact of SMEs on economy
As mentioned in the case study, small and medium sized businesses have a major impact
on the economy of the United Kingdom. By far, these enterprises have been claimed several
times to be the highest contributors towards the profitability and productivity of the country.
However, several statistics are required to be put into action, which helps in determining the
exact impact of SMEs over the economy.
However, it is first required to classify between micro, small and medium-sized business.
For instance, micro organisations are the ones which have less than 10 employees and turnover
under £2 Million. Moreover, small businesses have less than 50 employees less than £10 Million
turnover. Apart from this, medium businesses have less than 250 employees, along with £50
Million as the maximum limit of turnover.
Apart from this classification, these are also usually segregated in terms of sole
proprietorship, private companies and partnerships. In terms of sole proprietorship the nature
and characteristic is quite casual due to lesser formalities involved within the same. Moreover,
complete control is exercised by the owner, which makes it very flexible. On the contrary, within
limited companies, the nature is quite rigid as they are required to act according to stakeholders
and the government (Ramadani and et. al., 2015). Hence, with so many hierarchies, rigidity is
one of its major characteristics. In addition to this, in terms of partnerships, which is usually seen
within medium enterprises, participation is one of the most effective characteristics. In terms of
nature, equality is highly promoted with a scope of flexibility and adaptability.
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Apart from this, all these distinct and classified businesses have major impacts on the
economy. For instance, one such data which appropriately denotes the distinct contribution of
these businesses are mentioned below:
Illustration 1: Analysis of active enterprises in the UK by small and medium enterprise (SME)
employment size band, 2004 to 2017
(Source: Analysis of active enterprises in the UK, Office for National Statistics, 2019)
As per the data, while Micro organisation have enhanced to almost 26,38,510 till 2017,
small and medium enterprises have enhanced their numbers to 2,39,965 and 38,520 respectively.
Hence, as per this data, micro businesses provide more benefit to the economy in terms of
enhancing the employment opportunities and contribution to GDP.
Illustration 2: Businesses by size
(House of Commons Library: Business Statistics, 2018)
According to the display above, all the categories mentioned above, such as micro, small
and medium enterprises have been very much effective in terms of contributing to the economy.
For example, micro organisations contributed more than £800 Billion turnover in 2018 (Mugler,
2017). Moreover, in relation to small enterprises, almost £600 Billion collectively was
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contributed by this category, whereas almost similar was the turnover rate for medium
enterprises. Hence, it could be said that success are of micro organisation is its scope of
employment and capacity for turnover, while the other are effective in relation to enhancing their
scope and steady increase in their levels.
P4. Explanation of importance of small businesses and start-ups on growth of social economy
Social Economy refers to a combination of diverse organisations and enterprises, such as
associations, cooperatives, mutuals, etc. (Julien, 2018). However, within the current social
economy of UK, the major impact which has been evident by the case study is related to Brexit.
It is an unlikely event which took place in 2016, where a referendum was signed in relation to
UK's separation from the European Union. Hence, this has the impact on the overall social
economy. One threat is related to high cost of doing business and the next is related to lower
standard of living of individuals.
However, small businesses such as SME's and start-ups contribute in an effective manner
to the social economy. This could be reflected through several pointers which are mentioned
below: Employment Generation: One of the major aspects which reflects the contribution of
SMEs through the way it generates the employment for individuals. SMEs within the UK
are very much functional after Brexit, which have generated immense possibilities for
future employment growth within the country. Hence, these are important for growth of
the standard of living of individuals within the country.
 Innovation: Another aspect through which they contribute within the country is through
innovation. Since the economy is down, there are new ways, such as frugal innovation,
which have been consistently applied by SMEs to contribute towards the growth of social
economy and ensure welfare of individuals (Hatten, 2015).
TASK 3
P5. Determination of characteristics, traits and skills of successful entrepreneurs
Characteristics of Tom Mercer and Elizabeth Gooch Hard work- It is an important characteristic to be a successful business person. Elizabeth
and Tom Mercer both have it. With the assistance of this quality they convert their
dreams in reality and operate a successful business. This differentiate the from business
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manager because they do hard work to earn profit through different business activities
where as entrepreneurs for business growth.
 Passion- It is another crucial characteristic of Tom and Elizabeth because cause of
having it, they are delegate towards their work or use their all efforts fro the success of
the business. It differentiate them from administrators because they use their skills for
earning profit margins and not take effective decision due to lack of patient (Burns,
2016).
Traits of Tom Mercer and Elizabeth Gooch Disciplined- It is an important trait of Tom Mercer and Elizabeth Gooch and due to have
it, they both perform their work and activities in structure manner. So they accomplish
their business objectives on set time. Manager perform their duties according to the
management of the company, they do not design any framework for it.
 Confident- It is another essential trait and quality of both entrepreneurs. Cause of have
this attribute, they feel confident in different situation and take effective decisions for the
success and growth of their business. Business manager take decision so that the
organisation can operate its business smoothly.
Skills of Tom Mercer and Elizabeth Gooch Leadership skill- Tom and Elizabeth both have this skill and with the help of this skill
lead and direct their employees regarding task so they they can accomplish their goals on
time. Business manager use this skill to order the worker and they do not lead and guide
the employees.
 Innovative thinking- Both respective business persons are creative thinker and with the
help of it make innovation their business and accomplish its success. They think critically
so that new idea can be developed and they use it it for business development (Burns and
Dewhurst, 2016).
P6. Assessment of how aspects of entrepreneurial personality reflect entrepreneurial motivation
and mindset
Entrepreneur personality reflects the attitude and behaviour of an entrepreneur which
effects their mindset and motivation level. For evaluation of entrepreneurial personality and
mindset use of ocean model is made.
OCEAN model
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According to this model there are certain factors in an environment that shape personality
and decide ones behaviour. This model has provided five main components of personality that
are mainly seen in an individual. Theses personality trends are described below: Openness: this personalty trait includes insight and imagination power of an individual,
person having this type of personalty are very dynamic and and have wide range of
interest. They are also bold and have creative mind. Tom mercer is having this personalty
trait as he is spontaneously and having a dynamic personality bust this kind of person
resit change so that he doe not provide much initiative and creativity to its employees. Conscientiousness: these kind of persons are goal oriented and having a great level of
thoughtfulness in their work. There greatest strength is their exceptional organisational
abilities and good behaviour with others. They are a efficient planers who organise every
thing in advance. Elizabeth Gooch is having an excellent planning skills as well as he is
very good at communicating with his stakeholders, thus he belongs to this type of
personality (Brush and Greene, 2015) Extraversion: entrepreneurs having this personality are emotionally expressive and likes
to affirm their ides on others. they are quite energetic and likes to take firm actions
irrespective of their impacts. They likes to become centre of attraction in social gathering
and Agreeableness: the main characteristic or features of this personality are affectionate,
kind, full of sympathy and they are the most trustable person. They are very cooperative
and selflessness interact with all people very nicely and are also engaged in pro social
behaviour.
 Neuroticism: they are quite weird and emotionally unstable. These person arr mainly
suffering from depression thus not suitable for any entrepreneur.
TASK 4
P7. Examination of how background and experience can hinder or foster entrepreneurship Tom Mercer- he belong to a strong family and has not faced many issues in his life
regarding his studies or any other basic nedds. From childhood he is having interest in
business thus, having a desire of operating and owing his own company. Thus he had
established a famous MOMA foods. His desire of becoming a entrepreneur created
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dedication and passion in him which makes him a successful entrepreneur (Ayandibu and
Houghton, 2017).
 Elizabeth Gooch- family background of Elizabeth Gooch is not so sound and is financial
weak. Her father was having a small business so she just followed path of his father. She
completed her studies and soon started her carer in business sector. Due to weak financial
conditions many issues and problems are faced by her which made her goals and decision
more firm. All these situation Elizabeth Gooch strong and passionate for her work. She is
a hard worker which is necessary for fulfilment of her dreams of becoming a good
entrepreneur (Amato and et. al., 2017).
CONCLUSION
Thus, it is concluded from the report above, that entrepreneurship is an effective activity
that must be adopted by individuals in order to start and manage their own businesses. It is very
important tat different types of entrepreneurial ventures are examined along with exploration of
similarities and differences between them as this allows an appropriate insight onto the nature
and working of different organisation. In addition, SMEs have an evident and immense impact
on the UK economy and small businesses and business start-ups are very much crucial for the
social economy. In addition to this, it is highly imperative that characteristics, traits and skills of
entrepreneurs are identified, which reflects their personality and differs them from other
managers. Lastly, examination of background and experience appropriately and effectively
reflects as to how entrepreneurship could be hindered or fostered through these social factors.
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REFERENCES
Books and Journals
Amato, C. and et. al., 2017. Regulatory modes and entrepreneurship: the mediational role of
alertness in small business success. Journal of Small Business Management. 55. pp.27-
42.
Ayandibu, A. O. and Houghton, J., 2017. The role of Small and Medium Scale Enterprise in
local economic development (LED). Journal of Business and Retail Management
Research, 11(2).
Brush, C. G. and Greene, P. G., 2015. Women's entrepreneurship. Wiley Encyclopedia of
Management, pp.1-5.
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
International Higher Education.
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
Hatten, T. S., 2015. Small business management: Entrepreneurship and beyond. Nelson
Education.
Julien, P. A., 2018. The state of the art in small business and entrepreneurship. Routledge.
Mugler, J., 2017. The climate for entrepreneurship in European countries in transition. The
blackwell handbook of entrepreneurship, pp.150-175.
Ramadani, V. and et. al., 2015. The context of Islamic entrepreneurship and business: Concept,
principles and perspectives. International Journal of Business and Globalisation. 15(3).
pp.244-261.
Ratten, V., 2016. Female entrepreneurship and the role of customer knowledge development,
innovation outcome expectations and culture on intentions to start informal business
ventures. International Journal of Entrepreneurship and Small Business. 27(2-3).
pp.262-272.
Saleem, M. A., 2017. The impact of socio-economic factors on small business
success. Geografia-Malaysian Journal of society and space. 8(1).
Volery, T. and Mazzarol, T., 2015. The evolution of the small business and entrepreneurship
field: A bibliometric investigation of articles published in the International Small
Business Journal. International Small Business Journal. 33(4). pp.374-396.
Online
10 of the UK’s fastest growing startups. 2019. [Online] Available Through: <https://www.eu-
startups.com/2018/12/10-of-the-uks-fastest-growing-startups/>
Five British Social Entrepreneurs Set To Change The World. 2019. [Online] Available Through:
<https://www.forbes.com/sites/davidprosser/2014/12/11/five-british-social-
entrepreneurs-set-to-change-the-world/#456f24d35c6b>
The best small companies with a turnover of up to £10m in the UK. 2019. [Online] Available
Through: <https://realbusiness.co.uk/the-best-small-companies-with-a-turnover-of-up-
to-10m-in-the-uk/>
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