Entrepreneurship and Small Business Management

This report discusses different types of entrepreneurial ventures, their relationship with the typology, statistical differences between small, medium and large businesses, the importance of small business in social economic growth, characteristic traits and skills of successful entrepreneurs, and the impact of background and experience on entrepreneurship.

UNIT 9:
ENTREPRENEURSHIP AND
SMALL BUSINESS
MANAGEMENT (ESBM)

Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P1 Different types of entrepreneurial ventures and their relationship with the typology............3
P2 Difference between entrepreneurial ventures:........................................................................4
LO 2.................................................................................................................................................4
P3: Statistical differences between small, medium and large businesses....................................4
P4 Importance of Small Business in Social Economic Growth...................................................7
LO 3.................................................................................................................................................7
P5 Characteristic traits and skills of successful entrepreneurs....................................................7
P6: Aspects of entrepreneurial personality through OCEAN model...........................................9
LO 4...............................................................................................................................................10
P7 Impact of Background and Experience on Entrepreneurship...............................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The main aspect of Entrepreneurship is to produce a product or a service aiming to
maximize profit or to disrupt an industry by taking the initiative to start a small business (Burns,
2016). The main objective of Entrepreneurship in small business is to innovate, grow rapidly and
increase profit margin. In this report, will be discussed that the background and experience of an
entrepreneur plays a significant role in its life. It can even foster or hinder entrepreneurship.
LO 1
P1 Different types of entrepreneurial ventures and their relationship with the typology
A entrepreneur is a person who establish the business and takes the financial risk in the
hope of profit earning. Entrepreneurship is the activity of establishing the business.
The types of entrepreneur are:
Survival: In this mode entrepreneurs does not focus on the business instead of living the another
day (Wennekers, S. and van Stel, A., 2017). It means the cutting of costs, tightens profit margin etc.
The example of the survival is funeral etc.
Lifestyle: A lifestyle is an entrepreneur who have done any physical appearance, it only deals
online. It just needs a person to operate and manage.
Growth: this entrepreneur come into the market to grow and earn profit. Growth is further
divided into two parts: managerial and aggressive growth,
Social: these entrepreneurs start their companies for earning profit but implements the solution
of the social culture and environmental issues (Kuratko, D.F., 2016). The example of the social
entrepreneur is Redcross.
Public: this entrepreneurship is undertaken by the government through the different development
policies. The example of the public company is National hospital service .
The typologies are as follows:
Small business: these business includes the people who run their own business and also hire
their family and local employee. Their main aim is to feed their family on regular basis instead of
making millions from business. Example of small business are funeral etc.
large Business: they are the huge companies which deals with many innovative products and
services on large scale. The example of large business is NHS (national health service).
High business: they are the business which suddenly changed financial position. Their growth
changes very frequently. The example of the high business is google and Facebook etc.

Scalable start-up: the main aim of starting the scalable start-up is changing the vision of the
people. They attract the investors and encourage them in investing the company. Example of the
scalable start-up is Tesco.
P2 Difference between entrepreneurial ventures:
Survival Public Growth Social
Risk Risk is low, as the
motive is to
survive no profit
earning
The risk in public
is minimum to
high as it is
undertaken by the
government
Risk in the
growth is High, as
their focus is on
earning profit.
Risk is not there
in social as the
main motive of
the company is
social
development.
Structure It is in the form of
small shops and
stores.
It is in the form of
companies.
It is in the form of
private company
It is in the form of
public company
and non profit
organisation.
Similarities between entrepreneurial ventures
The similarities between the entrepreneurial ventures are they focuses on the profit
making. All the ventures are creative and innovative in nature (Kubberød, E., Fosstenløkken, S.M.
and Erstad, P.O., 2018). It is the formal concept. The risk taking is there in every entrepreneurial.

LO 2
P3: Statistical differences between small, medium and large businesses
Small and Medium enterprises generally have less than 250 employees. SMEs play a significant
role in employment across UK. The presence of these industries across the country is remarkable
with around 99% of majority of businesses being SMEs accounting to around 5.9 million.
The number of micro-businesses was approximately 5.6 million in 2019 which summed up to
96% of all business in UK. This is in-spite of the fact that most of the businesses in the country
employ less than 10 people which leads to an employment of 33% with a turnover of 22%.
The strength of large businesses in UK is around more than 8000 which accounts for only 0.1%
of the total businesses. But a surprising and contradictory outcome shows that these large
businesses provide employment to around 40% people of UK and have a high turnover of 48%.
The early stages of management in SMEs focuses on human resources and strategies for
innovation. After the company gets a foothold in the market, quality is given importance. So
initially there might be less turnover due to factors such as its inefficiency in operations and

financial risks. In the initial stages the small companies might not have an efficient revenue
model and their profitability is highly affected due to huge loans and capital investments. But
large companies do not face these issues and employ selected proficient employees and experts
and generate high turnover due to their established networks of operations. They also invest in
R&D and focus on motivation and skill development of employees. The main obstacles in-case
of SMEs are the labour laws, indirect costs, government regulations, bureaucracy, and capital
market failures.
In the year 2018, there were around 1090 businesses for 10,000 resident adults in UK, out of
which London had the highest number of businesses that is, 1544 per 10000 residents while
North East had 694 businesses per 10000 residents. More than one-third of the businesses were
situated in London and South East. Northern Ireland had the least number of businesses that
is,124000 across UK. The highest fall in businesses presence was noted between 2018 and 2019,
reasons being Brexit, tax regulations and capital requirements mainly in Northern Ireland and the
East Midlands. In the rest of the regions, there was an increase in the strength with largest
increase in Wales by 12% . Overall,there was increment of 4% in the business in UK in the
years 2018 and 2019.

On the basis of industry, there was an overall turnover of 71% in the service sector providing
employment of 79%. Retail industry accounted for 34% turnover and 18% employment. The
construction sector accounted for around 17% of all businesses but a mere 9% of turnover and
only providing employment to 8% people. Manufacturing firms consisted of 5% of businesses,
15% of turnover and 10% of employment.
P4 Importance of Small Business in Social Economic Growth
The small business is considered as the backbone of social economy. It plays a major role
as it fulfils the basic needs of the people. There main aim is generating profits. The small
business can be done online as well as offline. The economy can be transformed by the small
business start-ups in the following ways:
 Creation of Employment: If a person starts its business , then it helps the government
and the society in reducing problem of unemployment (Burns, 2016). The person also

provides job to himself which can be considered as self employment. Because of the
start-ups, many people get jobs like painters, writers, marketers etc.
 Innovation: Small business owners introduce new things in the market thereby facilitate
innovation. It also increases fast decision-making, focus on research, rewarding top
performers. The small businesses are fostering creativity more than the big businesses.
They try to use advanced technologies in their strategies.
 Enhance engagement of disadvantaged groups: Mainly, the women and the minorities
are the people who do not receive the benefits in any manner. It helps them to gain pride
and financial success in the long run. There has been a rapid growth in the status of
women due to these businesses.
 Development of Entrepreneurship: The small business can be a big brand tomorrow.
They have the opportunity to expand their business to become a billionaire someday
(Dana, 2018).
So, the small business play a vital role in the socio-economical development of the nation.
Therefore, they must be promoted in an efficient and effective manner.
LO 3
P5 Characteristic traits and skills of successful entrepreneurs
Characteristics of Entrepreneurs:-
 Determined:- Entrepreneurs understand the importance of the work and the business, and
they know the fact that business success is totally in the hand of the person who is putting
their best in the performance. Working as a start-up required money and to pay debts the
business need to work better.
 Customer oriented:- Entrepreneurs focused on customer as it is the main reason why
business exist. All the successful business entrepreneur realize this early as business is all
because of the customer. Managers are business oriented and they only focus on their
duties.
 Risk Taker:- Entrepreneurs are the risk takers, and they always focus on taking big
decisions that can cause them a lot. But still, they choose to take decision and play the
risky game in business.

 Technologies oriented:- Entrepreneur always ready for the technologies update and
always focus to provide the best technologies to its customer to work better and increase
customer satisfaction (Parker, S.C, 2018).
 Self investor:- Entrepreneur invest money time and everything in themselves so that they
can deliver the best of the performance to achieve the business goal. They think to
improve someone, one needs to improve self first.
 Innovations:- Entrepreneurs work on innovation and ideas. They work with risk and take
decision on their own ideas and innovation which separates them from a manager.
Traits of Entrepreneurs:-
 Vision:- They have clear vision of what they want from their businesses. They have all
the ideas why, who, what, where of their business.
 Passion:- Entrepreneurs are passionate about what they do and that what make their
business successful. It required a lot of hard work and determination to work long hours
if a person do not have interested in the work.
 Tenacity:-Working as an entrepreneur is tough as when things get hard and rough it is
important not to give up. They are always focused and ready to change plan if one does
not work. But they never give up (Frederick, O'Connor, and Kuratko, 2018).
 Willingness:- They work hard in every situation, and they always face the issues and
never give up on their decision and try hard to overcome all the queries.
 Confidence & flexible:- Entrepreneur are always confident and they work in flexibility
and on other hand manager shows lack of confidence con some situation, and they follow
strict rules and not flexible.
 Resilience:- It shows the ups and downs in a business and entrepreneur should always
need to be resilient as business are not fixed and result can be change accordingly.
P6: Aspects of entrepreneurial personality through OCEAN model.
Entrepreneurial personality can be measured by certain traits using the model of Big Five
also called OCEAN which describes a spectrum of characteristics under a broad domain. (Oshio,
Taku and Saeed, 2018) These are:
 Openness to Experience: This refers to the traits of a person in relation to open-
mindedness and intellect along with depth, creativity and originality. If the entrepreneur

is high on this trait, it will be beneficial for the start-up as shallow interests never help in
growth of any business.
 Conscientiousness: This refers to positive manifestation of self-control precision,
efficiency and deliberation. A high level of conscientiousness is considered ideal for the
entrepreneur because carelessness and irresponsible behaviour of a leader is never
suitable for the business.
 Extraversion: This refers to enthusiasm and assertiveness in interaction and networking
with people. This is essential for building contacts in a business. Therefore, it is
moderately required.
 Agreeableness:- Agreeable people try their best to avoid negativity and stay happy as a
result. They motivate everyone by their behaviour and their nature which also helps in
growth. Many gets motivated if a leader is Agreeable and confident and this improves the
performance of the team.
 Neuroticism:- Neuroticism shows emotional stability of a person as it provide
information that its too easy for the person to get depressed and hipper on the small
issues. They also suffer from frustrations, anger, anxiety etc. They feel insecure on small
situations and react too early because of their emotions.
LO 4
P7 Impact of Background and Experience on Entrepreneurship
(Covered in PPT)
CONCLUSION
The report aimed at describing the entrepreneurship in small business. The report has
explained the view on two wells know public personalities Bill Gates and J.K. Rowling. They
showed that its improtant to have a passion to achieve the business goals and objective. The
background and experiences in the life of entrepreneurs hindered and fostered their
entrepreneurship.

REFERENCES
Books and journals
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
Dana, L.P., 2018. ENTREPRENEURSHIP & SMALL BUSINESS.
Laudano, M.C., Marzi, G. and Caputo, A., 2018. A decade of the International Journal of
Entrepreneurship and Small Business: a bibliometric analysis. International Journal of
Entrepreneurship and Small Business. 33(2). pp.289-314.
Urbano, D. and Aparicio, S., 2019. An Overview of the Economics of Entrepreneurship and
Small Business: The Legacy of David Audretsch. In From Industrial Organization to
Entrepreneurship (pp. 279-306). Springer, Cham.
Oshio, A., Taku, K., and Saeed, G., 2018. Resilience and Big Five personality traits: A meta-
analysis. Personality and Individual Differences, 127, pp.54-60.
Frederick, H., O'Connor, A. and Kuratko, D.F., 2018. Entrepreneurship. Cengage AU.
Kubberød, E., Fosstenløkken, S.M. and Erstad, P.O., 2018. Peer mentoring in entrepreneurship
education: towards a role typology. Education+ Training.
Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Parker, S.C., 2018. The economics of entrepreneurship. Cambridge University Press.
Wennekers, S. and van Stel, A., 2017. Types and roles of productive entrepreneurship: a
conceptual study. The Wiley Handbook of Entrepreneurship. pp.37-69.
Online
BEIS, Business population estimates, 2019 [Online]. Available through:
<file:///home/user/Downloads/SN06152%20(1).pdf>
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