Entrepreneurship and Small Business Management

This report discusses the types of entrepreneurial ventures and their typology, similarities and differences between entrepreneurial ventures, and the impact of small and micro businesses on the economy. It also explores the importance of business start-ups and small businesses for the growth of social economy.

Entrepreneurship and Small
Business Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 Types of entrepreneurial ventures and their typology...........................................................1
P2 Similarities and differences of entrepreneurial venture.........................................................3
LO 2.................................................................................................................................................5
P3 Data and statistics for evaluating the impact of small and micro businesses on the
economy......................................................................................................................................5
P4 Importance of business start-ups and small businesses to the growth of social economy.....8
LO 3.................................................................................................................................................9
P5 Skills and characteristic traits of a successful entrepreneur...................................................9
P6 How entrepreneurial personality point out entrepreneurial motivational............................11
LO 4...............................................................................................................................................12
P7 Background of entrepreneurs...............................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Entrepreneurship is a process of creating additional wealth by innovating products which
provide value to customers and create a positive brand image. It is process of enhancing social
welfare is being performed by providing civilization with an tremendous amount of goods and
services. An entrepreneur is action oriented and a highly motivated individual who is ready to
take risk and achieve objectives and goals (Bogdanova and et.al., 2016). Present report is based
on London boroughs that have 32 local authority districts. This report includes different type of
entrepreneurial ventures with their relationship to typology of entrepreneurship. This also
includes similarities and differences between entrepreneurial ventures. Further, this report consist
of interpretation and assessment of data and statistics on impact of micro and small business on
economy with the importance of small business and business start ups for the growth of social
economy. Lastly, this report contains characteristics, skills and traits of a successful entrepreneur
which make them different from other business managers and it also includes aspects of
entrepreneurial personality that reflects entrepreneurial mindset and motivation.
P1 Types of entrepreneurial ventures and their typology
Entrepreneur is an individual who generates unique idea and operates business by taking
risk. Entrepreneurship is a process of managing the business venture by taking risk with the hope
of maximizing profits. Entrepreneurial ventures focus on providing advice to early start-ups.
Entrepreneurs are individual who establish their business by using limited resources (Burns and
Dewhurst, 2016). Entrepreneur is responsible for all the risks that occur in the ventures. There
are various type of entrepreneurial ventures which are as follows:
 Social Venture: This type of business ventures build strategies to develop the society.
They protect the interest of stakeholders. Public companies follow social typologies by
investing in CSR activities which is beneficial for social development.
 Small ventures: It is defined as venture which focus on selling and marketing all the
products produced. They invest own savings in the business. The main objective of this
venture is to survive in the market and meet its financial obligations. Companies having
survival ventures has some characteristics such as laying off employees, reducing cost,
fear of commitment in future plans. The main purpose of this type of venture is to
survive in the market and meet their daily requirement. These company does not want to
expand their business and increase their profitability. For example Craft Gin Club is a
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surviving company in UK which provides subscription services to help consumers (Cole,
2018).
 Large growth venture: Business having high growth ventures are small designed. The
main purpose of conducting the business is to achieve high profits and grow company
rapidly. To meets its organisational objectives and goals, these business develop their
products and services according to the need of customers and build promotion strategies
to attract investors in providing capital for the business. These business ventures want to
expand globally to increase its market share. For example Hotel Hilton in UK is a high
growth venture. It aims at increasing its market share by expanding in the market (Dunne
and et.al., 2016).
 Medium growth venture: These are medium size venture which focus on recovering
their capital invested in starting of the business. The main purpose of these ventures is to
sustain in the market for longer period. These business survive in the market to earn
profits which will cover their cost. These firm spend their time in market by observing
and then try to increase its market share by expanding slowly. For example, Smith
brothers which is a contacting company.
 Public ventures: This type of ventures are publicly traded. Its ownership is distributed
among public and government bodies in the form of shares. It is formed by legal systems.
The main purpose of this venture is to maximize the value of shareholders and provide
benefits to public socially. It is essential for companies to prepare annual reports and
appoint independent director. Public limited companies need to be registered under stock
exchange. Public companies contribute a large part of their earnings in CSR activities to
protect the interest of public, customers, shareholders etc. For example Tesco is a public
company in UK which protect the interest of its stakeholders(Goss, 2015).
 Private ventures: This type of company is owned by private owners or non-
governmental organizations. There shareholders are less than public company. The main
purpose of this venture is to develop the economy of the country. Private companies
have of 4 types of legal structure, i.e., sole proprietorship, partnership, limited liability
company and corporations. In this company, there is a restriction of in transferring of
shares. There is no need of preparing annual reports and appoint independent director.
For example Unilever.
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Typologies: It is a classification of business on the basis of their nature. There are
various type of typology (Karadag, 2015).
 Lifestyle typology: It is a typology where owner set an expected level and enjoys to
fulfil it. The main purpose is to achieve the expected level so that sufficient income is
generated by the businessman. Middle or managed growth ventures follow lifestyle
typology because their main motive is to develop the business but they are restricted and
their potential to develop their products demolish their lifestyle(Spence, 2016).
 Scalable Venture: This type of business venture are capable to expand its market share
globally by bring new technologies or by investing capital in the business. High growth
ventures follow scalable typology because they have capability to increase their profits
and meeting objectives of organisation. They build such strategies that attract investors to
invest in their business. They develop their products according to needs of customers.

P2 Similarities and differences of entrepreneurial venture
Differences
High growth
venture
Survival
venture
Managed
growth
venture
Public
venture
Private
venture
Annual
growth Rate
The annual
growth rate of
this venture is
more than 20%.
The growth
rate is
nominal
because they
fulfil there
daily
requirement.
Its growth
rate is in
between 10-
15% as they
monitor the
market to
expand their
business.
The growth
rate of
public
company in
UK is
approximate
ly 18.4%.
The annual
growth rate
of private
company is
approximatel
y 63%
(Staniewski,
2016). It
provides
development
to economy.
Time It takes 2-5 It is a day to It takes 1-2 It depends They are one
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Horizon
years to
expands its
business.
day process. years. on the
company's
nature that
how much
time they
take in
creating
value.
of the fastest
growing
ventures.
Managerial
focus
Managers of
company focus
on expanding
their business
in global
markets.
Manager
focus on
selling
everything
that company
produce.
Managers
focus on
building
strategies to
increase its
business.
Managers
focus on
social
benefits.
Managers
focus on
development
of economy
and company
as well.
Entrepreneur
orientation
High growth
venture possess
high
orientation
Survival
ventures
possess
very--low
orientation
Managed
growth
venture
possess
moderate
entrepreneur
ial
orientation(
Storey,
2016)
Low
orientation
as it is
owned by
government
bodies
High
entrepreneuri
al orientation
Technology
Investment
There is a high
technological
investment in
these business
ventures.
There is no
technological
investment.
There is a
moderate
investment
in the
technology.
There is
average
investment
in
technologies
.
There is high
investment
in
technologies.
Exit These ventures For survival They Public Private
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approach
sell, go public
or merge with
other countries.
ventures
there is only
one option
for exit is
shut down
the
company(Ya
n and Yan,
2016).
transfer or
merge with
other
companies.
company
covert into
private
company.
company go
for joint
venture,
takeovers or
acquisition.
Source of
finance
Through bank,
financial
institutions,
public markets.
They invest
their own
savings.
Through
family,
private
investors
and friends.
Issuing IPO By selling a
part of
business, or
go public.
Similarities
 Funding from some venture capital: All the entrepreneurial ventures need to be funded
at their initial level. All the ventures need investors to invest in their business.
 Creative idea: All the entrepreneurs generate creative idea in order to conduct their
business. Entrepreneurship is the process of generating unique ideas.
 Create brand image: Every company want to create its positive brand image by making
its brand unique and different from its competitors.
LO 2
P3 Data and statistics for evaluating the impact of small and micro businesses on the economy.
Micro and small businesses pose a major impact on the economy of the country. As per
the statistics, small businesses accounted for 99.3% in whole private sector industry. These stats
are from the beginning of year 2018, where as small and medium size businesses together
resulted in 99.9% of all the private sector. It also developed the employment of the nation as total
employment by small and micro businesses was 13.6 million which can be calculated as 60% of
all the private sector employment in United Kingdom. This helped UK in improving the low
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productivity level which was the key challenge for the nation for generating growth in the
economy of the country (Zahra and Wright, 2016).
In the year 2018, there were around 1.4 million of employing businesses with more than
4.3 million of non employing businesses, which shows that more than 75% of businesses does
not employ anyone other than owner of the businesses. The overall population of business in UK
consist of three major legal forms which includes three main aspects. Firstly, the sole
proprietorships calculated were 3.4 million which was 59% of the total. Secondly, companies
were calculated to 1.9 million of all which was 34% of total and lastly it includes ordinary
partnerships which were estimated to 405,000 that was 7% of all(UK SME data, stats & charts,
2018) .
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Illustration 1: UK SME Data, Stats & Charts
( Source: UK SME Data, Stats & Charts, 2018)
There was a recent trend in the business population of UK between the year 2000 to 2017
as there was a sustained increase in the business populations every year, whereas in a recent
period of time there was a fall of around 27,000 of businesses which can be calculated around
0.5%, this took place in between of year 2017 to 2018. There were still a growth showed in year
2000 in businesses as around 2.2 million more businesses were found than in 2000 which was a
increase of 63%. Since year 2000, majority in growth of population was notices which accounted
for around 87% of the overall increase due to non employing businesses. These statistics and
data play a significant role in development of economy of UK. In the year 2017 and 2018, there
was a increase in number of business which provide employment opportunities on a large scale,
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these businesses are counted to 23,000 , which leads to fall in non employing business that were
50,000 which results in decrease of 27000 of overall businesses (UK Small Business Statistics,
2019).
There was a increase in number of companies in the year 2018, 31000 of companies were
increased that can be calculated to 2% of overall. This results in decrease in number of sole
proprietorships and ordinary partnerships. Sole proprietorships fell by 49000 which were 1% in
total and ordinary partnerships fell by 9000 which was 2%. These impacted the economy of UK
a lot. There was a sudden growth in GDP of the country and there was a fall with the fall in
businesses of UK. Small and micro businesses were accounted 99.5% in all the sectors which
shows that how major their impact is on increasing the economy of UK. Around fifth of all the
small and micro businesses operates in construction that is compared with less than 1% in
mining, utility sector and quarrying.
P4 Importance of business start-ups and small businesses to the growth of social economy
Small businesses and start-ups play a significant role in growth of social economy of the
country. It is important fore the nation to encourage and promote new start-ups and small
businesses which can help in generating employment opportunities. Importance of these
businesses are also beneficial for the local economies as local firms in rural areas are seen in
economic benefits of shopping locally. There are several benefits of small businesses for growth
in social economy which includes growing small businesses in UK, adaption of changing
climates, generating employment for local workers and contribution to local government with the
taxes(Burns, 2016).
Growing small businesses in UK
There were 99.3% of small businesses calculated in UK in the starting of year 2018.
These small businesses are being increased in a recent period of time which help the social
economy in increasing the variety of products in the market and with the more competitors the
prices of products also vary which give the local consumers a choice of selection of business and
have a wide range of products in the market for local consumers.
Generating Employment Opportunities to local workers
New start-ups and small businesses helps the local economy by generating employment
opportunities and bringing growth and opportunities for the local economy in which the
businesses are bring established. They also provide opportunities to those individuals who are
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not employed by the larger corporations due to no experience, Small scale businesses allow those
individuals to work with them and earn experience with them and then work with larger scale
organisation. These small businesses helps the local large scale industries by supporting them in
their functioning and completion of various business functions are being outsources by large
scale businesses(Spence, 2016).
Tax contribution to government
Small businesses and start-ups helps the local government by providing taxes and
supports the social economy. When consumers are purchasing a product from to area they are
significantly returning the money back to their local economy by paying the taxes to small
businesses and start-ups. These business also contribute in form of sales tax contribution for the
growth of social economy. A local small business can generate higher level of revenue which
can lead to resulting in paying higher level of taxes for the growth of social economy.
Easily Adapts Changing Climate
Small businesses and start-ups are usually customer oriented which helps them to
determine the needs and wants of the consumers and they can easily implement the change for
generating high revenues. They earn more revenue in crises also as they know what all things are
need to be changed because they are involved with the customers and consumers also prefers that
bushinesses which are close to them and have a hood relationship with the businesses and stay
loyal by purchasing their products by them only. As small businesses have less revenue than
large corporations, they have less things to loose in the time of economic crises(Storey, 2016).
LO 3
P5 Skills and characteristic traits of a successful entrepreneur
Tom mercer and Elizabeth are both successful entrepreneurs who have earned a lot of
wealth with fame by performing the skills which a successful entrepreneur must have. There are
several characteristics of a successful entrepreneur which includes passion, strong work
ethics,determination, strong people skills and many more (Burns, 2016).
Characteristics of Tom mercer
 Strong Work Ethics : The reason behind the success of an entrepreneur is strong work
ethics, this makes the entrepreneur to be on time and be loyal with the work. Tom mercer
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always had mind in work which make them work accordingly and achieve the targets and
goals.
 Determination : The entrepreneurs who are not impacted by the starting failures are the
most successful entrepreneurs now. Failure is like a success story for them which make
them work for the success and Tom mercer was the one who had the determination to be
successful in life and show everyone that goals are being achieved because of failures, as
a man learns the most by the failures not by the success(Karadag, 2015).
Skills of Tom mercer
 Creativity: It is skill which is necessary for a successful entrepreneur as creativity brings
innovations to the products which make them unique and different from another products
in market, that results in more attraction of customer which can significantly result in
more productivity of the company, and profits of the entrepreneur can be achieved as per
the objectives.
 Courage and risk taking: For harnessing the power of creativity, an entrepreneur must
have courage and risk taking skill, which make them successful and allow them to take
risks in the market and achieve the goals and targets. Tom mercer had that courage to
take risks in market by offering new products and after some failures, he achieved
success.
Characteristic of Elizabeth Gooch
 Confidence : To become a successful entrepreneur confidence is the key characteristic
for achieving success. A successful entrepreneur never asks any questions or keep doubts
in mind about their failure or success. They are confident enough for the success which
make them work more effectively and achieve their targets. Elizabeth had confidence
inside which make him to become a successful entrepreneur.
 Passion : The most important characteristic which a successful entrepreneur should have
is being passionate towards work and passion for working and being successful.
Elizabeth become successful as they love what they do and put all the extra hours into the
work to make the business successful(Cole, 2018).
Skills of Elizabeth
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 Ambition : the major reason of resistance of a successful entrepreneur is they do not give
up at the time when the things are getting tough. Elizabeth wants to be successful and
then thrived for reaching smaller milestones which were the stepping stones to the main
goal and objective.
 Perseverance : The most successful person are the one who faced the highest number of
failures. Most of the entrepreneurs faces failure but only they are successful who never
look behind and move forward and achieved success. Elizabeth never looked behind and
works forward after several failures and achieved success in life(Zahra and Wright,
2016).
P6 How entrepreneurial personality point out entrepreneurial motivational
Through OCEAN model it is identifies that how entrepreneurial personality point out
entrepreneurial motivational.
Openness: It is define as appreciation of emotion, curiosity to experience new things and
do adventurous things. Entrepreneur need to be open to experience new things and take risk.
These type of people are more creative and are ware of new changes in the market. People with
high openness are tend to be self-actualization by their experience. Person with low openness are
close minded people ho do not want to take risk instead follow the old procedures. Both Tom
mercer and Elizabeth possess openness to experience new things and take risk. This personality
trait has motivated them to be a successful entrepreneur(Staniewski, 2016).
Conscientiousness: It is defines a the tendency of self-discipline and achieve goals
against outside expectation. It is a process in how people regulate, control and direct
organisation. Low conscientiousness means people are flexible and spontaneous but along side
they are reliable. Whereas high conscientiousness people are tend to plan things before the
action. Tom mercer and Elizabeth posses moderate conscientiousness as they are flexible,
spontaneous and schedule all the activities before so that all the work is done on time. This
personality trait motivate them in finishing their work on time and achieve goals by regulating
properly.
Extraversion: It is define as people who posses these trait are extrovert in nature. They
engage with outside world and interact with them. They are perceived with full energy. People
perceiving these personality trait helps them in developing their business. They are very
enthusiastic and action-oriented person. Both the entrepreneurs Tom mercer and Elizabeth are
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extrovert as they are open to outside world. They are action-oriented people which keeps them
motivated. These entrepreneurs have visibility which helps in achieving goals. They talk on
social issues and help them in resolving them(Dunne and et.al., 2016).
Agreeableness: This trait defines individual difference in dealing with general issues.
These kind of people are tend to be kind, generous, trustworthy and helpful in nature. This type
of personality possess in few people only from which these 2 entrepreneur possess this traits.
They maintain a good relationship with others and also possess leadership skills. Both the
entrepreneur are kind and generous. They work and coordinate their team so increase their
performance and meet expected requirement.
Neuroticism: It is known as an emotional instability. They are anger, depression because
they may have experience negative feeling. Those who have high neuroticism are easily stressed.
They are usually in bad mood. But both they are able to control over their emotions and turn
negative things into positive direction.
LO 4
P7 Background of entrepreneurs
Elizabeth Gooch
She is the successful female entrepreneur of United Kingdom (Goss, 2015). She has
started working in bank in the age of 18 year, she worked there for 12 months. She got to know
how to manage cash and what are the best cash management strategies. She learnt many things
from there that experience has helped her to become a successful entrepreneur. She has used that
experience at the time when company was not doing well. She has float business on AIM rather
than going to any venture capitalist. This supported the firm in controlling over business and
generating more revenues. She always got support from family, love affection from family
members have helped her to move in the right direction and become a successful entrepreneur.
Tom Mercer
Tom has completed his education from Cambridge university, since his childhood he was
thinking for his dreams. He wanted to become a business man. (Cole, 2018) he always looked
upon the others and society members and try to know their needs. As he was having a great team
those who were supporting him. The experience and family support of Tom has helped him to
become a successful entrepreneur.
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CONCLUSION
From the present report it can be concluded that small and micro business play a
significant role in growth of economy and social economy of UK. Entrepreneurship skills and
characteristics play a major role in success and failure of an enterprise. This reports concludes
that there are different entrepreneurial ventures that relates to the typology of entrepreneurship
with the similarities and differences between the entrepreneurial ventures. Further this report
concludes that small and micro businesses impact the economy with the help of data and
statistics and, small and micro businesses impact on social economy by providing several
benefits to the economy of UK, there are several benefits of small and micro businesses which
includes employment generation, tax contribution and many more. Lastly, this report concludes
skills and characteristics of a successful entrepreneur which differentiate them from other
managers in a business and the aspects of entrepreneurial personality which reflects mindset and
motivation of entrepreneurial.
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REFERENCES
Books and Journal
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conditions of global competition: possibilities and threats. European Research Studies.
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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.
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).
Dunne, T.C. and et.al., 2016. The impact of leadership on small business innovativeness. Journal
of Business Research. 69(11). pp.4876-4881.
Goss, D., 2015. Small Business and Society (Routledge Revivals). Routledge.
Karadag, H., 2015. Financial management challenges in small and medium-sized enterprises: A
strategic management approach. EMAJ: Emerging Markets Journal. 5(1). pp.26-40.
Spence, L.J., 2016. Small business social responsibility: Expanding core CSR theory. Business
& Society. 55(1). pp.23-55.
Staniewski, M.W., 2016. The contribution of business experience and knowledge to successful
entrepreneurship. Journal of Business Research. 69(11). pp.5147-5152.
Storey, D.J., 2016. Understanding the small business sector. Routledge.
Yan, J. and Yan, L., 2016. Individual entrepreneurship, collective entrepreneurship and
innovation in small business: an empirical study. International Entrepreneurship and
Management Journal. 12(4). pp.1053-1077.
Zahra, S.A. and Wright, M., 2016. Understanding the social role of entrepreneurship. Journal of
Management Studies. 53(4). pp.610-629.
Online
UK Small Business Statistics.2019 [Online] Available through <https://www.fsb.org.uk/media-
centre/small-business-statistics>
UK SME data, stats & charts.2018 [Online] Available through
<https://www.merchantsavvy.co.uk/uk-sme-data-stats-charts/>
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