Impact of Small and Micro Businesses on Economy

The assignment explores the various types of entrepreneurs and entrepreneurship that contribute to the development of innovative products and services. It highlights how small and micro businesses positively impact the economy by providing facilities, generating employment, contributing to economic growth, and improving lifestyles. The document also references relevant literature on small business management and entrepreneurship.

Entrepreneurship and Small
Business Management
UNIT 9

Table of Contents
INTRODUCTION...........................................................................................................................1
ACTIVITY 1....................................................................................................................................1
Different types of entrepreneurial ventures and their relationship with typology of
entrepreneurship...........................................................................................................................1
Similarities and differences between entrepreneurial ventures...................................................2
Impact of micro, small, medium and large businesses on economy by using relevant data and
statistics........................................................................................................................................4
Importance of small businesses and business start-ups to the social economy growth and
different level of economy...........................................................................................................5
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Entrepreneurship can be defined as a concept where it is considered to be as a process of
designing, commercializing and operating a new business with new ideas. This new business
generally starts with small business. The people who generates new ideas and convert it into new
business, called Entrepreneur (Julien, 2018).
Present booklet will highlight the range of entrepreneurial venture and entrepreneurial
typologies. It will also tell about the impact of micro and small businesses on the economy.
ACTIVITY 1
P1. Different types of entrepreneurial ventures and their relationship with typology of
entrepreneurship
Entrepreneurial Ventures
An entrepreneurial venture may define as a kind of small business which is invested by
one or more individuals in a group with the hope of earning financial gain and fulfil the needs of
customers.
Types of Entrepreneurial Ventures
There are various types of entrepreneurial ventures which are as follows -
Survival Entrepreneurial Venture
Those entrepreneur companies who try to survive and meet with the obligations of
financial needs of venture is known as Survival Entrepreneurial Venture (Dana, 2018).
Lifestyle Entrepreneurial Venture
Those entrepreneurs who run the business with a purpose to not only want to earn profit
but also want to live the luxury life. These businesses are known as Lifestyle Entrepreneurial
Venture.
Dynamic Growth Entrepreneurial Venture
Those entrepreneurs who reinvest the profits in their business for expand or growth of
business. These profits can be earned by the selling of goods and services.
Speculative Entrepreneurial Venture
Those entrepreneurs who operates the business for the shorter time. Speculative
entrepreneurial venture is characterized by showing potential of the business and after sometimes
sell it.
Typologies of Entrepreneurship and their relationship with Entrepreneurial Venture
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There are various types of typologies of Entrepreneurship which are as follows -
Serial Entrepreneur
They are those entrepreneurs who are always come up with new ideas, convert it into
reality by opening a new business and sell their old business. This type of typology is basically
related with the Speculative Entrepreneurial Venture (Cole, 2018).
Social Entrepreneur
They are those entrepreneurs who focus on the lifestyle of people. Also, they are focus on
those products or services or ideas through which they can solve the social problems. This type
of typology is basically related to the Lifestyle Entrepreneurial Venture.
Female Entrepreneur
They are those entrepreneurs who are businesswomen and operates the business. They
are generally ready to take risks and think about the growth of business. Thus, this type of
typology is related to the Dynamic Growth Entrepreneurial Venture.
Entrepreneur
They are those entrepreneurs who thinks & acts like an entrepreneur and uses
entrepreneurial skills in order to benefits the company financially. They are related to the
Survival Entrepreneurial Venture.
M1. A Diverse range of entrepreneurial ventures
Micro ventures- In this venture the money is invested to seed early-stage emerging companies
with amounts of finance that is typically less than that of traditional venture capital.
Small enterprise- In this type of enterprise the investment is between 5 lakhs to 25 lakhs. The
employees also do not exceed from more than 10 in this type of organization.
Social enterprise- These type of enterprises only worked for social purpose. They do not have
any motive for making profit.
Similarities and differences between entrepreneurial ventures
Differences between Survival Entrepreneurial Venture, Lifestyle Entrepreneurial Venture,
Dynamic Growth Entrepreneurial Venture and Speculative Entrepreneurial Venture
Basis Survival Lifestyle Dynamic
Growth
Speculative
Purpose Their main Their main Their main Their main
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purpose is to save
the business
financially and
competitively.
purpose is to
increase the
standards and
quality of lifestyle
of people.
purpose are to
grab the growth
and expansion
opportunities for
the business.
purpose is to
show the potential
of new business
in the market.
Arrangement of
Funds
They use their
own capital and
take funds from
their families and
friends.
They use equity
funding from
outside sources
and internal funds
of business.
They use external
funding from
angel investors
and venture
capitalists.
They use internal
funding of their
own old business
and use their own
profits.
(Laukkanen and Tornikoski, 2018)
Similarities between Survival Entrepreneurial Venture, Lifestyle Entrepreneurial Venture,
Dynamic Growth Entrepreneurial Venture and Speculative Entrepreneurial Venture
Creative and new idea
The entrepreneurs of above 4 types of entrepreneurial ventures had new and creative
ideas which they convert into a concept and on the basis of that concept, entrepreneurs operate
the new businesses. They also do research on the feasibility of ideas so that they can plan to
operate the business and further plan to run this business for the longer time. Also, the
similarities between all the entrepreneurial ventures are to create new ideas, products or services
in order to do something different and out of box. They also do this for the purpose of growth of
business in the future.
Risky business to operate
These above mentioned entrepreneurial ventures have one more similarity in their
ventures. The similarity is entrepreneur of these ventures take risks in every aspects of
organization and believe in concept that “higher the risk, higher the return”. They do take
business risk, product risk, financial risk and customer risk. If they able to mitigate these risks,
they will become successful and if they failed to face these risks, they won't be successful
(Scarborough, 2016).
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Impact of micro, small, medium and large businesses on economy by using relevant data and
statistics
(Illustration 1: Micro, Small, Medium and Large Businesses
Source: Business statistics, 2018)
(Illustration 2: Micro, Small, Medium and Large Businesses
Source: Business statistics, 2018)
From the above graph and data, it can be interpret that all the types of businesses
(whether it is micro, small, medium or large) impact the economy of UK. According to the above
charts, In UK, 96% of total businesses are micro, 4% are small, 1% are medium and 0.1% are
large businesses. In case of employment, large business generate 40%, medium - 13%, small -
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15% and micro - 33% employment. In case of turnover, Large business generate 48% of total
turnover of UK economy. While, in case of micro – 21%, small – 15% and medium – 15% of
total turnover in UK.
It can be say that every business has different impact on every economic aspects of UK
economy. Taking about Large businesses, it generates more turnover rather than another
businesses. On the flip side, talk about market size of business in UK, Micro businesses are top
position (Business statistics, 2018).
Like this, it can be say that every business has its own impact on UK economy which
helps economy to grow more.
Importance of small businesses and business start-ups to the social economy growth and
different level of economy
Small businesses and business start-ups play an important role in the economy of country
as well as in the development of social economy of country. There are various ways through
which small businesses and business start ups impact the social economy of UK at the different
level of economy such as local, national and international. These impacts and ways can be
describe by following points -
Generation of Employment
Micro and small businesses play an important role in generation and providing of
employment to the skilled, unskilled, semi-skilled, qualified, unqualified and technical
employees. They generate a lot of employment opportunities which lead to increase in the
employment rate of local and national level of UK economy. By generation of employment and
increase in the creation of job opportunities, UK economy is becoming strong economy at the
international economy which is benefit for the social as well as economic point of views
regarding economy of UK (Burns and Dewhurst, 2016).
Availability of goods and services
Micro and small businesses generally target niche market customers and provide those
goods and services at the cheap rate with good quality. Due to a lot of micro and small
businesses in UK, people of UK are easily accessible to those goods and services which not only
make them satisfied but also provide them saving opportunities. This lead to easily availability of
products and services at the local and national market. Due to helps of UK government,
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Company is able to export these products and services and make these products and services
available at international market which is directly linked to international economy of UK.
Improvement in lifestyle
Due to availability of goods and services at low prices with high quality and employment
generation, people are earning, spending and saving their money which lead them to improve and
enhance their standards and quality of life which impact the local, national and international
level of economy due to increase in health services and education services being used by the
people of UK.
Economic Growth
Due to increase in consumption of products, services, education services, healthcare
services and employment generation in every sector of UK economy, micro and small businesses
are able to make profits which lead to increase in their contribution towards GDP of nations and
economic and social economic growth of nation. This cause to development of local, national
and international economy and infrastructure. Overall the impact of small and new start-ups
businesses on all the level of economy are positive and the goodwill of nation also enhances
(Hatten, 2015).
CONCLUSION
From the above study, it has been summarized that there are various types of
entrepreneur and entrepreneurship which helps in development of innovative products and
services. These entrepreneurs start there businesses as a micro or small businesses which
positively impact the economy in many ways. There are various types of businesses which are
different from each other in the aspects of turnover, number of employees and legal structure.
Small and micro businesses helps in development of economy by providing various facilities.
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REFERENCES
Books And Journals
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
International Higher Education.
Cole, R.A., 2018. Bank credit, trade credit or no credit: Evidence from the Surveys of Small
Business Finances. Trade Credit or No Credit: Evidence from the Surveys of Small
Business Finances. (July 31, 2018).
Dana, L.P., 2018. ENTREPRENEURSHIP & SMALL BUSINESS.
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.
Laukkanen, M. and Tornikoski, E.T., 2018. Causal mapping small business advisors’ belief
systems: a case of entrepreneurship policy research. International Journal of
Entrepreneurial Behavior & Research. 24(2). pp.499-520.
Scarborough, N.M., 2016. Essentials of entrepreneurship and small business management.
Pearson.
Online
Business statistics. 2018. [Online]. Available through :
<file:///home/user/Downloads/SN06152.pdf>
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