Different Types of Entrepreneurial Ventures and Their Impact on the Economy

This document discusses the different types of entrepreneurial ventures, including small businesses, scalable start-ups, and large companies. It explores their impact on the economy and highlights the importance of small businesses and start-ups in the growth of the social economy. The document also covers the similarities and differences between these ventures and the entrepreneurial typologies associated with them.

UNIT 9

Table of Contents
Introduction......................................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 Different types of Entrepreneurial ventures and how they relate towards Entrepreneur's
typology......................................................................................................................................1
M1 Public and Private sector entrepreneurship..........................................................................3
P2 Similarities and differences between entrepreneurial ventures.............................................3
P3 The impact of small business on the economy of the country...............................................5
M2 Differences between small, medium and large businesses...................................................6
P4 Importance of small businesses and business start-ups to the growth of the social economy
.....................................................................................................................................................7
P5 Determine the characteristic traits and skills of successful entrepreneurs that differentiate
them from other business managers............................................................................................8
P6 How aspects of entrepreneurial personality reflects entrepreneurial motivational................9
M3 Arguments related to entrepreneurial characteristics.........................................................10
P7 Background and experience effect on entrepreneur skills...................................................10
M4 Link between entrepreneurial characteristics and personal background............................11
Conclusion.....................................................................................................................................12
REFERENCES..............................................................................................................................13

Introduction
Entrepreneurship is the process of creating a new enterprise by an individual using their
innovative skills and knowledge, taking risks in order to maximize their profits. It also involves
arranging of inputs like land, labour, capital and entrepreneurship in order to develop a product
or service accordingly. There exists different types of Entrepreneurial ventures like large scale,
scalable and small scale business that the report will include namely Mckinsey & company,
Beales and Nom Foods respectively. Mckinsey & company is an American Management
consultancy firm that was established in 1926 by James Mckinsey and the company has spread
its operations all around the world and provides employment to more than 27,000 employees all
around the world. On the other hand, Beales is an English department store chain that operates in
the United Kingdom ad was founded in the year 1881 by John Beale. Lastly, Nom Foods is a UK
based local health and Nutrition Company that was founded by Steph Croft Simont in 2013. The
current study will highlight a comparison between different types of entrepreneurial ventures and
their contribution towards the growth and development of nation's economy.
MAIN BODY
P1 Different types of Entrepreneurial ventures and how they relate towards
Entrepreneur's typology.
Entrepreneurship is concerned with the process of launching, developing and running a business
venture by doing innovation and taking risks is called entrepreneurship. There exists different
types of Entrepreneurial ventures like:
Small business Entrepreneurship: Small scale business are the most commonly formed
businesses all around the world. In the United Kingdom, there are 5.7 million small scale
organizations that contribute towards 99% of all the businesses. The small enterprises operate in
very few places with minimum number of employees. These firms lack innovation because of
low capital funds for the research and development purposes. Beales is a prime example of small
business entrepreneurship as the store operates in just 22 locations with 450 employees.
Scalable start-up Entrepreneurship: These type of businesses focus on innovation and use
their skills to develop a unique product. The focus of start-up entrepreneurship is to identify the
problems of customers and then develop a product/ service accordingly. The entrepreneurs also
receive initial funding from venture capitalists which helps in the future growth and profit
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maximization of the business. For instance, Nom Foods is a scalable start-up as the company
provides healthy food that provides adequate nutrition and energy to the human body. The
business received an initial funding from Crowd cube, a British investment company which has
helped Nom foods in diversifying its operations and increased their profits significantly.
Large company Entrepreneurship: The large scale companies focus on providing unique
products and services to its customers by indulging in continuous research and development to
produce an innovative product that helps in increasing the growth and profitability of business.
For instance, Mckinsey & company provides various services to its customers like management
consulting, financial consulting and investment decision-making (Storey, 2016).
Social Entrepreneurship: It is defined as an entrepreneur who produce goods and service in
order to serve societies and communities in order to attain their social needs and issues. The
primary of social entrepreneurship is to make the world a better world instead of earning profit.
This entrepreneur majorly include non-profit organization. For example: NHS is world social
entrepreneurship which is provide best and free medical services to their customers and save
their life.
Entrepreneurial typologies:
Entrepreneurial: The entrepreneurial typology is concerned with an individual taking risks and
using the innovative skills to develop a product or service that creates value for customers.
Scalable companies like Nom Foods can be related with entrepreneurial typology:
Entrepreneurial typology are as follows:
 Survival Typology: This typology mainly focus on performing their function as well as
operation of organization in order to survive in the market for long duration. This can be
done with the help of satisfying customer needs and demands. These type of typologies
are small and perform organizational activities in limited resources.
 Lifestyle Typology: Organization who fall under lifestyle typology produce their goods
and services as per the latest trend which help them in fulfilling customer taste and
preferences. These companies perform their business operation under single premise.
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 Growth typology: This types of organization is highly grown at marketplace by
innovating in their existing products and services in effective manner. They grow by
attracting more customers towards company.
 Intrapreneurship: The Intrapreneurship is an entrepreneur in a big organization. These
individuals are self-motivated, pro-active and action oriented individuals who easily take
decisions. These individuals are not afraid of failure and are always ready to take risks
and learn from the failure. Mckinsey & company is an example of Intrapreneurship as the
company operates on a large scale and is not afraid of taking risks and try innovative
things.
 Managerial: Managerial includes the employees within an organization that takes
decision for the organization and these people have entrepreneurial skills within them.
They contribute towards the decision-making in the organization and motivates, guide
and supervises other employees to work efficiently and effectively for the achievement of
organizational goals and objectives.
M1 Public and Private sector entrepreneurship
Public entrepreneurship- It is defined as those businesses which are partially or fully owned
and controlled by public authority or state. The government possess all rights on providing
directions to business for making effective decisions. There are few business which are involved
in ownership of public for societal benefits. For instance national audit commission and
telecommunications.
Private entrepreneurship- It is defined as those business which is operating through helps of
commercial firms, people and others. They are not controlled or owned by central or state
government. For example, hospitality, retail, food leisure and so on.
P2 Similarities and differences between entrepreneurial ventures
Goals and Objectives
Small-business-entrepreneurship
The Beales company does not have specified goals and objectives which further reduces the
company' growth prospects due to lack of clarity. Although, the level of risk is comparatively
lower but Beales faces competition from various players in the market which affects their growth
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prospects. While, being a small scale business the company provides employment to around 450
people.
Scalable start-up entrepreneurship
The Nom foods, a scalable start-up enterprise offers innovative and unique products and services
to increase the profitability of the organization and thus achieving the goals and objectives. The
risks are high because the company develops a unique product and service which have equal
chances of being a success or failure. Therefore, there exists high level of risk. Nom Foods
provide employment to more than 200 employees in their organization.
Large company entrepreneurship
Mckinsey & company has set up SMART (specific, measurable, attainable, reliable and time
bound) goals and objectives in order to achieve them effectively. Also, the company then
compares the actual performance with the standard performance in order to take corrective
actions. The risks are not that high because the large businesses often manager to cover their
costs by selling huge volume of products and services. Mckinsey & company provides
employment to more than 27,000 people all around the world.
Similarities:
There exists a similarity between all the three companies that all these organizations have
initiated with a unique concept which has contributed to their success and profitability. All the
three companies have identified the needs and wants of consumers, initiated an idea and then
developed the products and services accordingly.
Diverse range of Entrepreneurial ventures:
Public sector: The public sector organizations are controlled by government directly or
indirectly. The government invest huge funds into the growth and development of these
companies and the private sector companies provide strategic help to them. The public sector
enterprises focus on providing good quality products and services to its customers and also focus
on social welfare and development rather than profit maximization. The National health services
is an example of public sector enterprises that provides free health care and medical facilities to
the people of UK.
Corporate sector: The corporate sector are owned and managed by private entrepreneurs
and it focuses on providing good quality products and services to its customers in order to
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increase the brand image of the business and maximize their profits. Mckinsey and company,
Nom Foods and the Beales are private sector companies that work with the sole objective of
earning profits
.
P3 The impact of small business on the economy of the country.
Small business are the crucial part of UK's economy because these businesses drive growth, open
new markets an also generates employment therefore there contribution is vital. These business
encourage innovation, competition and generate new ideas. It also helps in improving the
standard of living of people in the country by providing them good quality products at
competitive prices. In the view point of Burns, (2016) there are 5.4 million registered business in
the UK, out of which 99.9% businesses fall under the category of small-business.
Turnover: In the view point of Burns, (2016) small and medium-sized business contributed a
combined turnover of total 2 trillion pounds in the year 2018. Also, the total turnover amounts up
to 52% of private sector's total turnover.
Employment: According to Staniewski, Janowski,and Awruk, (2016) the SME'S also provide
employment to 16.3 million people in the United Kingdom that accounts for 60% of all private
sector employment. It includes both self-employed individuals and small companies that provide
employment to people.
Growth: The SME'S have witnessed a huge growth rate in the UK and is said to grow even
further at a rate of 50%. Also, among the Small businesses, the manufacturing business seems to
be the most confident in regard to growth and profitability aspects.
Also, according to Singh, (2015) the UK government is planning to invest 725 million pounds in
research and development regarding the growth and development of small scale industry. The
use of artificial intelligence and automated technologies will help in boosting the business of the
industry as the companies will be able to make strategic decisions and thus contribute towards
the improved economy of United Kingdom.
According to the research, it has also been identified that currently only one in five SME'S are
exporters and with the increased investment by government in the small business industry, it has
been estimated that there can be a rise in exporting firms by 9 and 12 percentage. Further
improvements in the exporting industry would alone add 1.15 billion pounds to annual gross
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value added. Thus, it can be said that the Small scale business are the backbone of UK's
economy therefore it is imperative for the government to continuously improve the condition of
small scale industry as it would significantly contribute towards the economy of the country.
M2 Differences between small, medium and large businesses
It is evident that small, medium and large businesses contribute to economy in their own distinct
manner. Below is an illustration stating the contribution of businesses the economy.
Source: Merchant Savvy, 2019
Interpretation: More than 99% of the businesses in UK belong to SME sector and their
contribution to the economy is significant. However their contribution to the employment is not
huge as most of the businesses encompass less than 50 employees. Medium enterprises in the
country carry a share of 12.6 in the employment and 15.4 in context of turnover which is decent.
There could be a higher share of businesses operating at medium level. Whereas large businesses
are few in number but carries a substantial share of 48.4 in turnover of the nation. The share of
employment which has been offered by large enterprises is 39.8% which is continuously falling
due to Brexit.
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P4 Importance of small businesses and business start-ups to the growth of the social
economy
The social economy is based on co-operative, not for profit and voluntary rather than paid
activities carried out within different communities nationally and internationally. The small
businesses contribute towards the development and growth of social economy by providing good
quality products and services to the public thus improving their overall standard of living. Also,
the startup businesses use their innovative and creative development skills to develop a product
or service that helps in solving the problems of the public and thus makes their lives better.
Moreover, in the view point of Ravanfar (2015) small startups and businesses also generate a lot
of employment opportunities in for the under developed section of society as they cannot afford
to hire high-skilled and motivated employees thus less skilled employees are hired and it
contributes towards balanced regional development and further makes them more efficient and
effective in performing the duties. Nom Foods and Beales provide employment to under skilled
employees but with proper training and development, employee's productivity to perform the job
improves. Also, incentives and rewards are provided to employees so that they work with
complete concentration.
Although, the majority of the economy of the UK comprises small and medium scale enterprises
but the total revenue provided by large scale companies is much higher as these companies
provide a wide range of products and services to its customers and also manufacture and sell
their goods internationally. The exports also helps in bringing the foreign currency into the
country thus boosting the economy of the country. The large scale companies also spend high
amount of money on CSR activities which helps in the welfare of society in which the business
operates. Also, the large scale companies provide products at a competitive price by achieving
economies of scale which has helped them in maximizing the revenue. Mckinsey & Company is
located at 127 places and has more than 100,000 clients globally thus it contributes heavily
towards a country's economy.
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P5 Determine the characteristic traits and skills of successful entrepreneurs that
differentiate them from other business managers
An Entrepreneur is a person that transforms an idea into reality by grabbing the opportunity and
converting a suitable product or service from it by making use of resources available to him
whereas business managers are the individuals in the company that guides, supervises and
motivates the employees to work harder for the achievement of goals and objectives effectively
and efficiently.
The major character traits and skills that distinguish entrepreneurs and business managers are:
Focus
The major focus of entrepreneurs is to solve a problem by developing a product/service and by
setting up their own business. Besides, the major focus of managers is to manager the ongoing
operations of an organization by using their management skills efficiently and effectively.
Risk taking
The Entrepreneurs have an inherited attitude when it comes to risk taking as they believe that it
will help them in retrieving their creativity and innovation and also they can learn better from the
risks taken by them (O’Mahoney, and Sturdy, 2016). The managers are risk averse because they
do not have the authority to take risks on behalf of the organization. Also, most managers
preserve the integrity of the organization by avoid taking risks.
Decision making
The entrepreneurs take majority of their business decisions by following their gut feelings and
intuition. Also, these decisions are calculated and analysed in advance and can have a both
positive and negative impact on the growth of organization. The Entrepreneur takes complete
responsibility of the decisions made by him. The managers do not have the power to take big
decisions related to the growth of the organization. Although, they take small level decisions
within the operations of the organization (Miller, 2015).
Character skills and traits of Entrepreneurs are:
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Risk taking: It is the duty of an Entrepreneur to incessantly take risks as it would help in the
growth and development of the entire organization. Also, successful implementation of risks
increases the level of confidence of Entrepreneurs and increases their motivation to achieve the
goals and objectives. However, the founder of Nom Foods, Steph Croft Simont, took the risk of
developing healthy and nutritional food that includes only natural ingredients and does not
include sugar. The major risk was the acceptance of food products and its taste. Successful
implementation of risk helped in the growth and success of the company. The Entrepreneur must
take calculated risks otherwise it would hamper the overall profitability and growth of the
organization (Kirzner, 2015).
Innovation: The Entrepreneurs always believe in the process of innovation and creativity to
develop a product or service. Innovation also helps in distinguishing a product or service from
the rest of the players in the industry and thus gives the company a competitive advantage. For
instance, with the introduction of Tesla in the automotive industry, the sales of other companies
have gone down because Tesla is an innovative product that runs on batteries rather than petrol
or diesel. The unique innovation by Elon Musk contributed towards the success of their car and
further enhanced their brand image. Although, innovation is important but it must be done by
identifying the needs and wants of consumers and analysing whether the innovation is important
for customers or not. Sometimes, unnecessary innovation can also cause losses to the
organization as consumers will not buy the product if they do not feel the need for it.
Decision making: The most important trait of an Entrepreneur is decision-making as it can lead
to success or failure of the organization. The future of the company is dependent on the decision
taken by the entrepreneur. The decisions must be taken keeping in mind various factors like
optimum utilization of resources, time and cost factors. The founder of Beales departmental store
take decisions by considering all the elements as it increases the authenticity and reliability of
decisions (Hindley, 2016).
P6 How aspects of entrepreneurial personality reflects entrepreneurial motivational
Entrepreneurs possess different personality which leads them to motivation in their career and
become successful. They possess different personality from their parents, some entrepreneurial
personality are as follows:
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Passion: Entrepreneurs are not afraid of hard work as they are focused in achieving their dreams
and vision. They do what they love thus, they do not give up when any challenges arise. Passion
keeps them motivated towards their dreams and achieve success. Owner of NOM foods was also
passionate towards their dreams which keep them motivated in driving success in its business
(Hillary, 2017).
Optimism: Owner of McKinsey & company is an optimistic personality and is self-motivated
and dedicated towards their work. They also motivate their colleagues by communicating their
dreams and inspire people.
Creativity: Creative personality always look for doing something different and better. Beales
company owner is creative and has come up with online store, they always want to change the
world with their new and creative ideas. If an individual possess more creativity then an
individual will be motivated and try to innovate products and services to satisfy customers.
Risk Takers: Failure and uncertainty does not stop them to take risk instead they are motivate to
face challenges and problems which come in between their goals. In order to earn return on
investment they take risks (Burns, 2016).
M3 Arguments related to entrepreneurial characteristics
Passion: Establishing a business takes a lot of efforts, hard work, time and passion to achieve an
individual’s goals.
Optimism: Entrepreneurs are optimistic about future, and they vision for long term. They do not
think about the unsuccessfulness of the business instead they are always motivated towards
achieving their goals and communicate their vision with others to make them understand their
roles and responsibilities to meet success.
Creativity: Entrepreneurs think differently i.e. out of box and create big ideas through their
creative thinking.
Risk takers: Most of the entrepreneurs are risk-taking personality, to start their own enterprise
they take risk and implement new ideas to be successful in their business.
P7 Background and experience effect on entrepreneur skills
Background: The background experience does play a strong role in developing
entrepreneurial skills from a very young age. The current study will include the story of Steph
Croft Simont founder of Nom Foods. The positive impact of past experience was:
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During her University days, Steph found out that she was allergic to packaged and junk
foods which led to various problems as her eating schedule got disturbed completely. Steph
started cooking food by herself in order to avoid allergies and other health related problems
which made her realize that there might be other people suffering from the same allergies.
Therefore, she decided to cook the food by herself and some positive reviews from friends and
family led to the discovery of Nom Foods.
Experience: The food company was an instant success and just after few days of its
launch, the products were sold by Planet Organic and Whole foods. Steph Croft still innovates
some new food product and keeps on experimenting which keeps the audience curious and has
helped in increasing the brand image of the company.
Also, there have been various experiences where the past experiences have played a
negative impact on the Entrepreneurial skills. The owner of Beales departmental store John
Beales has always been afraid to take risks because of certain poor experiences. Therefore, after
opening of Beales, John failed to take effective risks that could have contributed towards the
growth of the company which resulted in it becoming a medium scale organisation.
Mark Zuckerberg:
He is a technology entrepreneur as well as philanthropist. He is chairman and chief
executive officer of leading company Facebook. During his early life, he had keen interest on
computers and writing software in the middle of his school i.e. Philips Exeter Academy which is
situated in New Hemisphere. His father taught him Atari BASIC Programming for which they
later hired private software developer tutor. He did his graduation course from Mercy College.
As Mark Zuckerberg belongs to psychology and computer science, he achieved reputation as a
programming prodigy. He is an introvert personality and has less number of friends due to which
he was able to give his plenty of time in creating software and application. This implies that
having support of family and having no issues of financial issues as well as investing his time in
software's and applications he was able to launch Facebook.
M4 Link between entrepreneurial characteristics and personal background.
The ability to identify the problem and convert it into a business opportunity made Steph a
successful Entrepreneur and her background played a crucial role in this successful journey.
Despite being ill, she utilised that time of her life in developing an innovative idea and thus
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turned a negative event into a positive one. Similarly, John took a negative impact of his
background and failed to take into consideration effective risks which could have helped him in
succeeding.
Conclusion
From the above study, it can be concluded that Entrepreneurship is a natural skill as it involves
various factors like decision-making, risk taking and continuous innovation. The Entrepreneurial
ventures can be of all sizes like small, scalable start-ups and large scale organizations. Also, the
small business has a strong impact on the UK'S economy as it contributes towards 99.99% of the
total business of the country. Also, it generates huge employment opportunities and further
improves the quality of life of people. Thus, it can be stated that Entrepreneurship requires a
combination of different skills which if used effectively and efficiently, can contribute towards
the achievement of goals and objectives of the organization.
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REFERENCES
Books and Journals:
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Hindley, B., 2016. Economics and small enterprises. Small Business: Theory and Policy, p.42.
Kirzner, I.M., 2015. Competition and entrepreneurship. University of Chicago press.
Miller, D., 2015. A downside to the entrepreneurial personality?.
O’Mahoney, J. and Sturdy, A., 2016. Power and the diffusion of management ideas: The case of
McKinsey & Co. Management Learning, 47(3), pp.247-265.
Ravanfar, M.M., 2015. Analyzing Organizational Structure based on 7s model of McKinsey.
Global Journal of Management And Business Research.
Singh, K., 2015. Marketing policies and practices of medium and large scale enterprises a
comparative study of Punjab and Haryana.
Staniewski, M.W., Janowski, K. and Awruk, K., 2016. Entrepreneurial personality dispositions
and selected indicators of company functioning. Journal of Business Research, 69(5),
pp.1939-1943.
Storey, D.J., 2016. Understanding the small business sector. Routledge.
Online:
. 2019. [Online] Available Through <>
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