Entrepreneurship and Small Business Management

This document discusses different types of entrepreneurial ventures, their relation to the typology of entrepreneurship, the impact of micro and small businesses on the economy, and the importance of small businesses and startups to the growth of the social economy.

ENTRERENEURSHIP
AND SMALL BUSINESS
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Examine different types of entrepreneurial ventures and explain how they relate to the
typology of entrepreneurship.......................................................................................................1
P2 : Explore the similarities and differences between entrepreneurial ventures.........................2
TASK 2............................................................................................................................................3
P3: Interpretation and assessment of relevant data and statics to illustrate how micro and small
businesses impact on the economy..............................................................................................3
P4: Explain the importance of small businesses and business start-ups to the growth of the
social economy.............................................................................................................................6
TASK 3............................................................................................................................................7
P5: Determine the characteristic traits and skills of successful entrepreneurs that differentiate
them from other business managers.............................................................................................7
P6: Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation
and mindset..................................................................................................................................8
TASK 4..........................................................................................................................................10
P7: Examine, using relevant examples, how background and experience can hinder or foster
entrepreneurship.........................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Entrepreneurship refers to a process of discovering various new ways to combine
different type of resources in order to create and innovate a new product in market. An
entrepreneur is someone who starts, organises and assumes the risk of operating an enterprise.
Different type of entrepreneurial ventures include small-scale, medium-scale and large-scale
enterprises (Block and et.al., 2015). Small-scale firms have limited resources at their disposal
and thus they need to manage their finances accordingly to make best use of them. In this project
report, analysis will be made on the range of ventures and their typologies and their overall
impact on small businesses in a country. Additionally, assessment of various types of
entrepreneurial mindsets and environments that foster the growth of entrepreneurship in an
economy has also been made in this assignment.
TASK 1
P1: Examine different types of entrepreneurial ventures and explain how they relate to the
typology of entrepreneurship
An entrepreneur is someone who starts a business with a new idea of a product or service
with an aim to earn higher profits. Risk-taking, creativity and innovation are essential qualities
which are required to become an entrepreneur. Entrepreneurship refers to capacity and
willingness of a person to take risks to launch a creative or innovative product in the market.
Businesses which are set up in order to use innovation and opportunism to contribute a
value to society are known as entrepreneurial ventures. Different type of entrepreneurial ventures
are as follows-
Small business entrepreneurship- These are enterprises set up with limited capital and
operate at a small scale. They have to minimize their costs in order to maximize their profits. An
example of it can be small grocery shops operating in a particular area which operate within their
range of funds provided by owners. They also aim to earn a decent share of profit to sustain their
operations in a competitive market (Collins and et.al., 2014).
Scalable stratup entrepreneurship- In it, entrepreneurs start their business with a new
vision believing that they can change the world with it. Their funding comes from venture
capitalists and they hire the best talent. For e.g.- Facebook which was started by Mark
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Zuckerberg in 2004 is an example of this as social networking websites were pretty new at that
point of time.
Large company entrepreneurship- Large companies can sustain innovation and offer
new products which revolve around their core variants. Innovation of new goods is necessary
because of dynamic market and ever-changing customer needs and demands (Elo and
Volovelsky, 2017). Example of it can be Google which is a large company having operations at a
wide scale and has employees from all over the world working in it.
Social entrepreneurship- Entrepreneurship which involves creating goods and services
in order to meet social obligations and needs is known as social entrepreneurship. For e.g.-
Safepoint Trust is a charitable trust based in U.K. which focuses on providing safe injections. It
aims on educating people worldwide on the use of safe injections.
Typology of entrepreneurship- The ventures discussed above are linked with different
type of typologies given as below-
Serial entrepreneur- A person who continuously brings out new ideas related to goods
and services required by consumers is known as serial entrepreneur. Innovations are brought by
introducing new goods and services after identifying needs and demands of consumers (Forson
and et.al., 2014). A serial entrepreneur uses scalable startup entrepreneurship venture.
Female entrepreneur- Women who take the risk of venturing into a new project and
also control their ventures are female entrepreneurs. Female entrepreneurs mostly use small
business entrepreneurship model.
Social entrepreneur- Social entrepreneurs are the ones who set up enterprises to
contribute to the cause of society. They work not for earning profits but for fulfillment of needs
of society.
P2 : Explore the similarities and differences between entrepreneurial ventures
Different types of ventures have differences but they also share similarities with each
other. The differences are provided as below-
Basis of
difference
Small business
entrepreneurship
Scalable startup
entrepreneurship
Large company
entrepreneurship
Social
entrepreneurship
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Definition These type of
enterprises
operate on small-
scale with limited
capital and funds.
These businesses
are started with a
creative idea by
taking a huge risk
of venturing into
a new market.
These are large-
scale firms which
have a large
capital and have
more resources
for creativity and
innovation.
These enterprises
work for social
causes and
welfare for
upliftment of
society.
Objectives To make
sustainable profit
with the resources
they have.
To bring a change
in world with
their creative or
innovative
product.
To earn higher
share of profits
and capturing
larger market
share in long-run.
To add value to
the society by
their work.
Characteristics Small share of
owner' funds,
limited resources
at disposal.
New idea of a
product or service
in a completely
different market,
high risk.
Large-scale
operations, more
resources
available, benefit
of economies of
scale.
Focus on
contributing to
society rather
than earning
profits,
identifying social
problems and
solving them.
Similarities-
 There is risk involved in starting all these enterprises.
 Capital has to be invested to start any enterprise.
 All these enterprises have to bring innovative products to sustain in a competitive market.
TASK 2
P3: Interpretation and assessment of relevant data and statics to illustrate how micro and small
businesses impact on the economy
A small enterprise is a business operated on a lower-scale with low capital invested in
starting. Its turnover is less as compared to large-scale enterprises and it has to manage with
limited funds available with it (Hovne, Hovne and Schøtt, 2014) . A micro enterprise is a subset
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of small enterprise if its has less number of people than small businesses. Both of these have a
significant contribution to the economy of U.K. as they control 47 percent of the overall revenue
of market and have a role in providing employment opportunities (Contribution of small
businesses in UK Economy, 2016).
Impact of SMEs on U.K. Economy-
 International focus- SMEs focusing on international markets along with domestic
market are 3 times more likely to introduce innovative products and services in market.
Entry in international arena gives a chance to tap those markets which have huge
potential and thus these enterprises can significantly raise their level of profits
(Johannisson, 2014). Furthermore, it also gives a chance of expansion and diversification
to them as they can set up their operations in different countries in the world. This creates
positive impact on the economy.
 Increase in exports- Small and micro businesses producing goods required by other
countries in the world export these products thus enhancing the overall rate of exports.
There are many goods which are required globally and globalization has resulted in ease
of providing them in the market. This also gives exposure to firms in meeting global
standards and requirements. Thus, it can be concluded that it has a positive impact on the
economy and GDP of the country.
 Contribution to growth- As small and micro enterprises form a large chunk of the
overall enterprises in the country they have a significant contribution to growth of the
economy. They can contribute to it in many ways such as employment generation,
contribution to overall production, industrial output etc. Furthermore, they also contribute
in turnover of the entire economy by holding a large portion of it (Liñán and Fernandez-
Serrano, 2014). They add a significant value to GDP of the country because of their
output. Therefore, they have a positive impact on the growth rate.
Thus, it can be said that SMEs contribute a lot to the economy of U.K. in many ways.
They act as the catalyst for economic growth of country by contribution in every sector of the
economy. The dawn of industrial changes and globalisation has opened new doors for the small
and medium enterprises. They encourage growth of entrepreneurship which is good for the
economy. Additionally, they have made the market competitive and provide a variety of goods
and services for consumers to choose from thus enhancing choice of customers. They can adapt
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faster to a dynamic business world when compared to large-scale manufacturers. They contribute
to development of various sectors such as manufacturing, agriculture and ICT services. They
share a reciprocal relationship with the economy as its growth leads to creation of more SMEs
which provides boost to the GDP rate of nation (Loarne-Lemaire, Maalaoui, and Dana, 2017). In
the long run they can produce a substantial rise in level of income. They can create business
opportunities in different fields which are untapped and have huge potential. They can ensure
that flow of money happens across various levels of society. New entrepreneurs starting small
and medium enterprises bring with them ideas, vision, creativity and skills to succeed in market
in long-run. They are also contributing in becoming service providers in the country.
In the chart given above, three types of industries are compared with each other- Small,
medium and large. The employment generated by small, medium and large industries is
48%,12% and 40%. The turnover is 33%, 14% and 53% and Businesses held are 99.3%, 0.6%
and 0.1% respectively.
On the basis of this chart, it can be said that the maximum employment is being produced
by small industries while maximum turnover is of medium-scale industries and the maximum
number of businesses are from small industries (Mathew, 2016). Thus, it can be concluded that
small and medium enterprises have a huge role in providing employment opportunities and also
in boosting the turnover of country.
Also, since more than 99% of the businesses are of small-scale it helps in encouraging
business opportunities. The overall conclusion from this chart is that SMEs have a big role to
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play in the economy of U.K. as they control a large chunk of the market share and therefore can
positively boost the GDP.
P4: Explain the importance of small businesses and business start-ups to the growth of the social
economy
Brexit refers to the U.K.'s exit from the European Union following a referendum in June
2016. Thus various rules and regulations of E.U. are not applicable on the United Kingdom. It
will have a big impact on the economy of country and on industrial sector (Mian, 2014). It also
impacts trade relations U.K. had with the E.U. thus affecting businesses all across the nation. It
has increased overall inflation rate and has reduced British national income resulting in reduction
of the G.D.P. It will also reduce migration of workers in U.K. from various european countries.
Opportunities-
 Scope for inward investment- The investors in U.K. will now prefer to support and
finance funding requirements of small businesses in their own country rather than E.U.
This will create higher scope for inward investment for small businesses in the country.
 Scope for domestic workers- There will be an increase in scope for workers of U.K. to
find employment opportunities which will encourage local talent. This will provide an
opportunity to small businesses as they can employ talented local people for their
operations rather than relying on outsourcing.
Threats-
 Supply chain issues- It will be affected by tariff and country of origin requirements and
therefore there will be less inflow of supplies from European Union countries (Ratten and
Dana, 2015). This can adversely impact small-scale businesses relying on inputs provided
by suppliers of E.U. countries which will ultimately affect trade.
 Funding issues- Many of the small businesses in U.K. were dependent upon funds
received by investors of Europe. Now, this is likely to cease and along with it funding for
certain sectors will also change thereby affecting small-scale businesses in country.
Difference between small businesses and start-ups-
Basis of difference Small businesses Start-ups
Funding Small businesses are generally
funded by owner's capital.
Start-ups can be funded by the
owner or any external investor.
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Innovation Most of the small businesses
produce regular goods and do
not generally focus on
bringing innovation to their
products.
Start-ups are generally started
with an innovative idea about
providing a product or service
to the customer which is new
and has potential to survive in
the market.
Importance of small businesses and startups to the growth of social economy-
Small businesses and startups of a country offer a wide scope for contribution in the
social economy of a country. They are adaptable and can change according to the requirements
of a dynamic market. This helps in maintaining the loyalty of local customers who will not shift
to foreign brands (Ratten, 2014). They keep money of country within the country by working
with and supporting other small businesses and startups which benefits the community as a
whole. Thus it can be concluded that because of the above-mentioned factors they can contribute
to the growth of social economy.
TASK 3
P5: Determine the characteristic traits and skills of successful entrepreneurs that differentiate
them from other business managers
An entrepreneur is a person who envisions an idea which can be a product or a service
and works on it to make it successful. Oprah Winfrey and Larry page are two examples of
successful entrepreneurs who have different traits and skills which differentiates them from other
entrepreneurs. These traits and skills are-
Traits-
 Passion- An entrepreneur needs to have passion because it is necessary for success. They
must love what they love doing and must put in extra hours in business to make it
flourish. This will make their business successful and they would be rewarded for their
hard work. Oprah Winfrey and Larry Page are passionate and committed to their work
which makes them successful when compared to other business managers.
 Strong work ethic- An entrepreneur needs to have a strong work ethic so that an
example can be created for other employees working in the enterprise. Commitment and
dedication is required on part of entrepreneur to make business successful in the long-run.
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Oprah Winfrey and Larry Page have a strong work ethic and they don't believe in a
typical 9-5 job which is what makes them different from other business managers.
Skills-
 Interpersonal skills- Interpersonal skills are absolutely essential for an entrepreneur as
in an enterprise work has to be done closely with people (Yan and Yan, 2016). Therefore
relationships need to be developed with them. Oprah Winfrey and Larry Page have strong
interpersonal skills which helps them in connecting with people and forming new
contracts required for their work.
 Critical and creative thinking skills- These skills are necessary because continuously
bringing creative ideas is one of the prime requirements of entrepreneurship. Also, a
critical analysis needs to be done on multiple aspects of management of an enterprise.
Oprah Winfrey and Larry Page have strong critical and creative thinking skills. They can
apply these skills in their business models to take it forward and it makes them different
from other business managers.
P6: Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation and
mindset
Big trait model:- This theory was introduced by the psychologist named Gordon Allport,
in 1936. It is the primary approach to study the human personality according to their behaviour,
thought and emotion. This theory is also termed as five factor model, which is most widely
accepted personality accepted in scientific community. It proposes that human personality can be
measured in five major dimensions, as these all are distinct and independent from each other.
These five major factors of Big Trait model are further described as under :-
 Openness:- In this trait, it shows the relationship between personality of human and
academic behaviours. Here, the people increase their skills by learning and experiencing
which improves the openness in them. Its includes the imaginative skills for wide and
broad variety of interest. The entrepreneurs such as Oprah Winfrey and Larry Page are
benefited with this personality as it embraces new things, fresh ideas, and novel
experiences. This trait motivates human personality to develop curiosity, creativity and
commitment.
 Neuroticism:- This trait is also termed as Emotional Stability. It is the tendency to
experience negative emotions as anger, anxiety, or depression. Entrepreneurs like Oprah
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Winfrey and Larry Page are advantaged with the notification of mood swings, anxiety,
irritability, and sadness of human personality (Roth, 2014). Those low in this trait tend to
be more stable and emotionally resilient. This trait motivates them to identify and analyse
the negative emotion of human personality in organisation.
 Conscientiousness:- It describes the human personality level by good impulse on goal-
orientation and persistence with mindful of details. This trait is essential for Oprah
Winfrey and Larry Page as it enables them to perform their target based task with
effectiveness and efficiency. These entrepreneurs are motivated with this trait as they
analyse the personality for more likely to use brain region which control impulses and
keep themselves on track of target achievement.
 Agreeableness:- This personality dimension includes attributes as trust, kindness,
affection, etc. People with this personality tends to be more co-operative with high
agreeableness as compared to those with low are more competitive and even
manipulative (Ratten, Dana and Ramadani, 2017). Oprah Winfrey and Larry Page
benefit with the personality of care trait. It also assists others who are in need of help and
contribute happiness with other people. The entrepreneurs are motivated through this
trait, as the personality perform task in team with co-operation and co-ordination.
 Extraversion:- This trait is characterised by the level of sociability and enthusiasm. It
describes the person's assertiveness, emotional expression, and comfort levels in social
situations. It is necessary for Oprah Winfrey and Larry Page as it is important to use this
personality trait to identify and welcome different views. They are motivated with the
human personality to feel comfortable in expressing emotions appropriately and making
their opinion heard.
TASK 4
P7: Examine, using relevant examples, how background and experience can hinder or foster
entrepreneurship
Oprah Winfrey-
Background- She was born on 29th January 1954 in Kosciusko, U.S. In 1971, she entered
in Tennessee State University. She began working in radio and television broadcasting in
Nashville.
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Education- Getting proper education is certainly an advantage for an entrepreneur in
starting a new venture. Oprah Winfrey attended East Nashville Magnet Middle School, Nicolet
High School for her schooling and Tennessee State University from 1971-1987 to study speech
and communications.
Family- Her parents are Vernita Lee and Vernon Winfrey. Her mother used to work as a
house cleaner and Her father was a coal miner.
Experience- She hosted her first TV chat show- People are talking in 1976. She started
her own show- The Oprah Winfrey Show in 1986. The show went on until 2011 and had 25
seasons. Thus, she has a lot of experience in hosting TV shows.
Social network- In a career spanning over decades, she has built many social contacts
with different people. She has hosted a lot of celebrities in her show which helped her in building
a social network with them.
Gender- Female
Nationality- She is a citizen of Untied States of America(USA)
Education, family, experience and social network have positively fostered her in
establishing her own brand of entrepreneurship. Education has helped her in getting the required
knowledge. Family background and early struggle made her struggleful, experience has helped
her in getting success. Building social networks has been advantageous for her in hosting her talk
show and getting high ratings for the show (Ratten, 2016).
Larry Page-
Background- He was born on 26th March 1973 in Lansing, U.S. He is best known for co-
founding Google along with Sergey Brin.
Education- He studied for B.Sc in computer engineering from University of Michigan
with honours and pursued M.Sc in computer science from Stanford University.
Family- He was born to Carl Victor Page and Gloria Page who were both professors. He
got married on 08/12/2007 to Lucinda Southworth and has 2 children.
Experience- He founded Google along with Sergey Brin and has a long experience of
managing it. He was the CEO of Alphabet Inc. which is the parent company of Google until
03/12/2019.
Social network- Since launching of Google along with Sergey Brin he has developed a
lot of contacts in many areas.
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Gender- Male
Nationality- He is the citizen of United States of America(USA).
Education, family, experience and social network has positively fostered him in
entrepreneurship. His education has helped him in gaining knowledge and skills. As both his
parents were professors his family background has positively influenced him towards
entrepreneurship. His experience of many years in managing Google and Alphabet helped him
in becoming an entrepreneur. Maintaining of social networks helped him in building social
contacts which has helped him in the long-run (Smallbone, Welter and Ateljevic, 2014).
CONCLUSION
From the above report, it has been concluded that entrepreneurship is a process of
creating and innovating new products and services. There are different types of entrepreneurial
ventures which could be focused by entrepreneur. These are small-scale enterprises, scalable
startup entrepreneurship, large company entrepreneurship and social entrepreneurship. Typology
of entrepreneurship includes serial, female and social entrepreneur. Small and micro enterprises
have positive impact on the economy. There are various key aspects of an entrepreneurial
mindset and different environments that can foster or hinder the growth of entrepreneurship.
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REFERENCES
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Online
Contribution of small businesses in UK Economy. 2016. [Online]. Available through:
<https://esrc.ukri.org/news-events-and-publications/evidence-briefings/boosting-uk-
productivity-with-sme-growth/>
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