Analyzing SMEs and Entrepreneurship

The assignment provided is a compilation of various research studies and publications related to Small Medium Enterprises (SMEs) and entrepreneurship. It includes a list of references from academic journals, books, and online sources that discuss the impact of SMEs on the economy, business practices in developing countries, human resource management, and more. The summary highlights the importance of SMEs in the UK, their economic impact, and the need for further research in this area.

UNIT 9 Entrepreneurships

Table of Contents
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
Different types of entrepreneurial ventures and their relation to the typology of
entrepreneurship..........................................................................................................................1
QUESTION 2...................................................................................................................................3
The similarities and differences between entrepreneurial ventures...........................................3
QUESTION 3...................................................................................................................................6
Micro and small businesses impact on economy........................................................................6
QUESTION 4...................................................................................................................................8
Important small businesses and business start –ups will contribute to the growth of the social
economy after ‘Brexit’................................................................................................................8
QUESTION 5.................................................................................................................................10
Characteristics, traits and skills of two successful entrepreneurs.............................................10
QUESTION 6.................................................................................................................................11
Background and experience can hinder or foster entrepreneurship..........................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Entrepreneur is person which critically evaluate the business environment and design
products to satisfy clients need (Scarborough, 2016). SME play’s crucial role in growth and
development of the economy because it generates employment opportunities and increase living
standard of people. This project discuss about different types of entrepreneurial ventures and
their relation to the typology of entrepreneurship.
Further this report discuss about two successful entrepreneurs and their characteristic.
Personality like risk taking, creativity, passionate which affect the motivational mind set of the
entrepreneurs. Mark Zuckerberg who is the chairman and cofounder of leading social website
Facebook. Steve Jobs an American entrepreneur and business magnate. Apart from this, report
covers contribution made by business start –ups towards the growth of social economy after
‘Brexit’ and it covers impact of SME on UK economy.
QUESTION 1
Different types of entrepreneurial ventures and their relation to the typology of entrepreneurship
Entrepreneurship: Entrepreneurship is defined as process of designing product and performing
all activities required to start up business at initial stage (Kirzner, 2015). It is capability of
individual to manage business venture and take risk to earn rewards such as profit.
Entrepreneurial activity: This is an activity performed by businessmen in order to generate
value by creating and expanding economic activities. Ventures critically analyse and evaluate
environment and on the basis of above observation they develop products and procedures.
Enterprise: Enterprise deals with buying and selling of products in order to generate money to
encourage living. Person who is operating business is responsible for all debts and liabilities
which are incurred in this process.
Differences between serial entrepreneurs, intrapreneurs and owner managers
Basis Serial entrepreneur Intrapreneurs Owner managers
Description Entrepreneur that
manage all operation
Intrapreneurship is an
activity performed by
Owner managers are
individual holding job
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of small business and
implement new ideas
and innovative
techniques to increase
profit (Drucker, 2014).
individual while
working within a large
business association.
in in enterprise, which
is managed and
controlled by them.
Seen as They are seen as
leader which use
innovative ideas and
technology in business
process.
Business process is
monitor by and are
responsible for every
commercial activity,
thus they can be seen
as a manager.
Manager and leader
both characteristic are
seen in them.
Independence Businessmen are
independent because
all decisions are taken
by them.
They work for other
person or company,
hence dependable.
Partially independent,
as they work for the
business but control all
operation.
The typology of entrepreneurship
Lifestyle and growth firms: Individuals start up business with and objective of changing
lifestyle and enjoying their passion. These enterprises have limited scope of growth and
development because they do not want to spoil lifestyle. Products are designed according to
customer’s requirement, which satisfies entrepreneur that are termed as reward of lifestyle
business (Parker, 2018). It is dependent of the skills and potentials of founder, they deliver
quality products and services. For example Marks and Spencer, Apple, etc.
Entrepreneurship in a corporate or public sector: This sector consists of both private and
public sector enterprises like infrastructure, military, police, etc. Business sector with main
objective of maximising profits is known as private sector. Social sector main emphasis is on
serving society, they look after welfare of people and deliver them with quality products and
services. For example Fannie Mae and Freddie, PBS, etc.
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Micro, small and medium-sized organisations. : Organisation which has less than 250
employees working under it, is termed as micro, small and medium sized enterprise. This is play
key role in growth and development of the countries' economy. They are responsible for poverty
alleviation by generating income and job opportunities all round the world. For example Wiser,
Sun Microsystem Virtual etc.
Social enterprise: it is an organisation which implement strategies to improve financial, social
and environmental factors which is essential for society well-being. It operates with and intention
to serve society and provide them with good services (Kazanjian, Drazin and Glynn, 2017). It is
significant to combine social and business goals to promote changes in the society. For example
Big Issue, the Eden Project, etc.
QUESTION 2
The similarities and differences between entrepreneurial ventures.
Similarities
Basis of similarities Public sector Micro, small and medium-sized organisations Social
enterprise
Profit They perform all activities and objectives for maximising profit and
minimising their cost of operation.
Objective Their main objective is to deliver quality products and services to
consumers and operate within economies of scale.
Management All activities of business are managed and controlled by the
entrepreneur, they undertake various activities which in order to satisfy
need and requirement of customers.
Values The implement innovative strategies in order to enhance its productivity
and establish good relations with clients.
Financial motive Entrepreneur aim at reducing cost of operations and increasing its
efficiency which will provide growth opportunities to business.
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Key factors of success All Business use effective management practices and standardised
technology in order gain competitive advantage.
Stakeholder Management look after need and requirement of stakeholders and
motivate them to work in a desired manner to achieve its mission
Resources The effectively utilise all resources of business to provide valuable
services and maximise its output with the capacity of the allocated
financial resources.
Differences
Basis Lifestyle and
growth firms
Public sector Micro, small and
medium-sized
organisations.
Social enterprise
Definition Entrepreneur start
up business with
objective
optimising their
lifestyles and
emphasis on
personal growth
goals (Cooper and
Folta, 2017).
Lifestyle
entrepreneur are
more concerned
about status quo,
implement
various strategies
It consists of both
public and private
sector economy,
with main
emphasis on
serving valuable
services along
with increasing
profits.
SME play crucial
role in developing
countries, it
provides
employment to
people living in
backward areas,
thus increasing
their standard of
living. It
implements
creative ideas
which help in
maintaining level
of competition.
These enterprise
are known as
NPO, main
objective is to
serve society and
provide them
valuable services.
It has set of
environmental
objective which
they communicate
to stakeholders.
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related to grow
business at faster
rate.
Leadership In order to
improve
efficiency and
productivity this
skill is
significant.
Leadership trait is
significant to
coordinate the
efforts of
employees
towards common
direction in order
to accomplish the
goals and
objectives.
They have an
innovative idea
which will
enhance their
performance level
and overall
revenues and
income.
The influence
people to work as
a team towards
growth of the
society,
entrepreneur
assure welfare of
the society and
community.
Skill set
Entrepreneur has
an actual vision
of identifying
future
requirement of
customers and
design products
according to it.
They critically
evaluate business
environment and
design products
on the basis of
clients demands,
this will increase
sale and revenue.
Small and m
micro business do
not have enough
capital to develop
new products,
they modify
existing products
to capture market.
Social
entrepreneur
focus on
delivering quality
products and
minimizing the
usage of
hazardous
products in its
manufacturing
process (Storey,
2016).
Business
environment
Businessmen are
passionate about
starting up new
They follow
systematic
hierarchy for
SME business
are operating in
small scale, and
Their main
objective is to
serve society, it is
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venture, they
have flexible
business
environment.
communicating
important
messages and
ideas.
has limited
working hours.
essential to have
decentralised
decision making
procedure.
Examples Marks and
Spencer, Apple,
etc.
Fannie Mae and
Freddie, PBS, etc.
Wiser, Sun
Microsystem
Virtual etc.
Big Issue, The
Eden Project
QUESTION 3
Micro and small businesses impact on economy
Micro and small scale business has positive impact on economy the country as it provide
employment to large scale of people. Entrepreneur critically evaluate business environment and
develop products and services to satisfy desire of customers. Sustainable growth and
development of SME is improving standard of living and providing them with various
employment opportunities. In UK, there are 92% business which are of small and medium size,
operating with less than 250 people. It has contributed to almost 65% in generating new jobs.
Small business is significant for growth and development of countries economy,
according to research conducted by national endowment for science, it was founded highest
growth rate of 6% (Ojokuku, Sajuyigbe and Ogunwoye, 2014). Government has reduced tax
break in order to encourage employment, research and development, thus it can be said above
mentioned policy play crucial role in development. Individual having minimum capital can start
up small venture and undertake public offering.
SME get direct support from the government financial institution, which boost up
economic growth and development. This has been termed as poverty alleviation tool because, it
is labour extensive economy. UK has reduced poverty by 50% and has become one of the 20
largest world economies, therefore it can be said that entrepreneurial development play crucial
role. In 2014, it was estimated that 5.2 million business were operating in UK out of which
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99.8% were considered as SME. The main objective of enterprise is to satisfy customers
requirement and improve employee engagement in order to maintain sustainable environment.
Current productivity level of UK is encouraging because it is contributing maximum part
to employment scenario. According to the report which was published in 2015, it can be said that
600 million jobs will be created worldwide over next 15 years (Elena and Tatiana, 2015). Most
of the formal jobs were created by establishment of SME, despite of consisting of major part in
the economy, 50% of SME is lacking in investment.
In current scenario, this sector has contributed to almost 33% to the national income and
45% of employment opportunity in the developing countries.
ADVANTAGE
 SME has led to remarkable growth and development in the economy and has created job
opportunities thus by increasing living standard of people.
 Establishment of ventures has increased level of competition, every organisation is
struggling to bring out the best and quality products. This has led to positive situation for
both service providers and receivers, increasing economic efficiency and effectiveness.
 SME come up with innovative ideas and strategies to capture large consumer base, SME
has made high growth as compared with other industries operating globally (Kara,
Spillan and DeShields, 2015). The prior advantage of this sector is its capacity to
generate job opportunities with low capital expenditure.
 This sector plays crucial role in dealing with the economic recession by evaluating with
changing environment. Almost in every country, SME compromises of large section. In
developed and developing countries, it is improving employment rate, by developing
more jobs.
 SME provide services on form of raw materials and also manufacture finished goods.
Thus, it is significant to maintain coordination between agriculture sector, manufacturing
and industry.
 Sector is adapting dynamic changes in environment, by dealing with goods and services
online. They have main objective of satisfying customers demand by rendering them with
valuable services at affordable cost. This has improved living standard of people, they
have variety of options to choose from.
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(SMEs in the UK, 2018)
QUESTION 4
Important small businesses and business start –ups will contribute to the growth of the social
economy after ‘Brexit’
Understanding social enterprise,
social entrepreneurs and the growth of the social
economy
Social enterprise are the businesses which are trading with a aim of tackling social issues
or problems, improving communities and providing people access to training and employment.
These organisations reinvest the money earned by selling goods or services into their business or
local community. An social entrepreneur is a person who establish an organisation with a goal of
solving social problems within the community or influencing social change. As the number of
social organisations are increasing due to increase social challenges, social economy is growing
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Illustration 1: SME impact on economy

with a high rate. The social economy is mostly taken to be a third sector of mixed capitalist
economies distinct from the private and public sectors. The main reasons for growth in social
economy is that government is highly supporting to social organisations and corporate social
responsibility of large companies are being delivered by small social organisations.
Britain has voted to leave Referendum, which was held on 23rd June 2016, this has
negatively affected economy of the country. UK government issued article 50 of the treaty on
European Union to incorporate with the existing law (Storey, 2016). Membership was confirmed
by referendum in 1975 to encourage UK to joined European Communities.
SME are more concerned, when it comes to decision of leaving European Economic Area
(EEA). According to academics study of University of St Andrews, 10000 of new firms were
established after the Brexit. This has been termed as one of the potential impact on economy.
There were some of negative consequences also like capital investments were reduced, which
has hindered the growth and development of this sector.
Brexit has negatively affected the productivity, economic growth and development
because of low capital development. High tech and service related industry were also affected by
the uncertainty of Brexit. This situation is highly complex and unpredictable in nature, which has
resulted institutional instability (Glover and Kusterer, 2016). Sending employees to work abroad
is expensive procedure because SME do not have enough resources to provide luxury and
investigate for the same. Engaging business activities outside the countries help in establishing
good trading relations across the countries.
UK consist of 5.7 million SME out of which 99% are the private and provide
employment to 60% of the total population. It has created job opportunities of about 2 million in
2010. Brexit is likely to affect future strategic plans of business, as per the economic forecast
which is based on the real views and opinions of entrepreneur (Allen and Truman, 2016). It can
be seen that Brexit has been an obstacle for growth of commercial activities. This impact can be
related to trade internationally both import and exports.
According to 38% entrepreneurs, introducing trade tariffs were the biggest reason behind
loss of EU labours. Due to special Brexit clauses, financial institutions and big organisation have
lost their European customer's. It was suggested to take industry seriously while negotiating with
the exiting deals. Business were motivated to expand their operations and take more order from
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other countries in order to boost up their productivity in UK economy. Due to Brexit, it became
difficult for entrepreneur to invest in the project development plans and proposals.
It was found that above mentioned strategy was attracting new customers, in order to
increase sales and expand their business activity across the world. Firms were reducing their
prices to attract investments which can subsequently lead to boom in the manufacturing sector. It
was noticed that the biggest expansion of manufacturing sector was in the year 2014.
Implementation of subsidy has increased the export of country by 43%, which could be termed
as positive impact. According to the current study from Oliver Wyman, the annual cost of UK
exporters is £27 billion, although various steps has been taken to mitigate the cost (Goffee and
Scase 2015). The prices were continuously rising, in order to control this scenario, it is essential
to monitor export tariffs to minimise its impact on the profit margins of post-Brexit phase.
Further, it can be said that exporting of SME have optimistic impact and in future, it is expected
to rise by 15%.
Moving ahead with this situation, in past five years, 44% of UK’s SME expanded its
operation to Europe, Britain is still in favour of expanding business activities into the closest
market.
QUESTION 5
Characteristics, traits and skills of two successful entrepreneurs
Mark Zuckerberg is a successful American technology entrepreneur and philanthropist,
who was born on 14 May, 1984 at White Plains, New York. He is the chairman and cofounder of
leading social networking website, Facebook. He started his business from dormitory room on
4th February 2004 with roommates named as Dustin Moskovitz and Chris Hughes. Initially, he
launched his business in the college campus which eventually has expanded one billion users by
2012. Mark Zuckerberg decided to make public with the majority of shares on 2012 (Ward,
2014). Net worth of the company was estimated US$67, which was decreased up-to 19%. Some
of his characteristic, traits and skills are mentioned below.
Confidence: confidence is defined as a way of handling difficult situations and making future
predictions implement actions in the most effective way. This character play significant role in
the rise of entrepreneur, he was caption of the fencing team that boost up his confidence level.
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Zuckerberg decide to start up business at young age and became the most influential
businessmen.
Passionate: It is an optimistic feeling which help individuals in achieving their goals and target
in a desired manner. Zuckerberg was passionate about building games, which has helped in
developing famous social website named as Facebook. At 12 installed a messaging program
using Atari Basic that was named by ZuckNet. Without this skill it would have been difficult to
accomplish the goal of 2 billion active user by April 2008.
Critical Thinker: This is termed as intellectual process of analysing and synthesising the
important message which was gathered by observing various situations (McKenzie and
Woodruff, 2015). Zuckerberg critically evaluated the business environment and implemented
innovative strategy to deals with the dynamic nature of environment.
Another example of successful entrepreneur was Steve Jobs an American entrepreneur
and business magnate. He was the chairman, chief executive officer and co-founder of Apple
Inc. and a member of Walt Disney Company board of director. Entrepreneur was born in San
Francisco, California. He studied at Reed College in 1972, after that he dropped his studies and
started his career as an entrepreneur. Jobs and Wozniak together founded Apple in 1976.
Unbelievable imagination: Steve Jobs design products and services on the basis of customers
requirement, this provide them with competitive advantage. He conducted research in order to
identify the demands of customers and implemented his observation in the manufacturing
process in order to capture market share.
Uncanny ability: He designed products according the advanced technology which helped
business to grab the attention of its potentials buyers (Nguyen, Newby and Macaulay, 2015). In
order to become successful, it is important to identify the needs of customer's. This has resulted
in competitive advantage for the Apple.
Entrepreneurial personality reflecting motivation and mind set of entrepreneurs
There are various personality traits like risk taking, creativity, passionate which affect the
motivational mind set of the entrepreneurs like Mark Zuckerberg and Steve Jobs. It is important
for businessmen to be passionate towards their work this will increase their efficiency and
productivity. They must critically evaluate the elements affecting business environment and on
the basis of above observation to develop the products.
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From the above, it can be said both Mark Zuckerberg and Steve Jobs have focused on
motivating and transfer confidence to become successful and to deal with various complex and
difficult situations. Effective communication skills help them to gather feedback and deliver
information about products to clients. Flexibility is another important traits which affect the mind
set of businessmen, they should be willing to modify existing products according to changing
circumstances.
QUESTION 6
Background and experience can hinder or foster entrepreneurship
Factors that foster the growth and development of entrepreneur
Economic circumstances of entrepreneur: Capital is an essential factor which help in
establishing a business. Steve Jobs effectively combined all factors of production like land,
labour and raw materials to deliver quality services and products to customers. Manufacturing
process is difficult without allocating the capital (Boswell, 2014). Mark Zuckerberg increased its
investment which has resulted in maximising profitability of the business. Technological
advancement can be implemented with help of capable and efficient work force, this will
minimise wastage and increase productivity.
Education: Entrepreneur understand the business environment on basis of skills and knowledge
they have. Education is essential in designing the products and services in order to satisfy
customers. Steve Jobs has set of development skills, which help him to grab opportunities and
operate in an effective working environment. Mark Zuckerberg’s main objective was to achieve
profits by decreasing the cost of operations. Thus, management education play crucial role in it.
Education motivate entrepreneur to utilise resources in order to implement creative and
innovative ideas.
Rewards of profit: Mark Zuckerberg started his career with a messaging site, which gained
popularity. After that, he developed social networking site known as Facebook. Implementation
of innovative ideas play crucial role in increasing profits. Thus, it can be said that creative ideas
is essential to attract attention of potential buyers.
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Factors hindering growth of entrepreneurs
Low income generation: Establishing of the business is a complex process. There is no
guarantee of income generation. So, it is important to be determined and motivated at initial
stages. Mark Zuckerberg faced many failures in the process of developing social media
(McKenzie, 2015). In order to establish good relations with clients, Steve jobs identified the
demands of future generation and designed computers on basis of it.
Dependency on skilled and capable employees: Both entrepreneurs find difficulty in selecting
capable and skilled employees, which is required in performing all business activities. Steve Jobs
was capable of selecting employees who were not efficient and productive.
CONCLUSION
This project concluded that all activities of SME are controlled and managed by single
person. Entrepreneurial activities is performed by businessmen in order to generate valuable
services and expanding its operations. Further, this project explains about social enterprise that
make use of strategies to improve financial, social and environmental factors which is essential
for well-being of society. UK has reduced poverty by 50% and has become one of the 20 largest
world economies. Therefore, it can be said that entrepreneurial development play crucial role. In
2014, it was estimated that 5.2 million business were operating in UK out of which 99.8% were
considered as SME.
Mark Zuckerberg is a passionate and confident entrepreneur, which has started his
business at early age of 12. From the above it can be said that entrepreneur should be motivated
and confident to become successful and deal with various complex and difficult situations.
Effective communication skills help them to gather feedback and deliver information about
products to clients.
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REFERENCES
Books and Journals
Allen, S. and Truman, C., 2016. Women in business: Perspectives on women entrepreneurs.
Routledge.
Boswell, J., 2014. The Rise and Decline of Small Firms (Routledge Revivals). Routledge.
Canova, F. and Hamidi Sahneh, M., 2017. Are Small-Scale SVARs Useful for Business Cycle
Analysis? Revisiting Nonfundamentalness. Journal of the European Economic
Association .16(4). pp.1069-1093.
Cooper, A. and Folta, T., 2017. Entrepreneurship and high‐technology clusters. The Blackwell
handbook of entrepreneurship, pp.348-367.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
Elena, C. and Tatiana, S., 2015. Event tourism in Russian region: Opportunity for small-scale
business growth. Procedia Economics and Finance .26. pp.183-187.
Glover, D. and Kusterer, K., 2016. Small farmers, big business: contract farming and rural
development. Springer.
Goffee, R. and Scase, R., 2015. Corporate Realities (Routledge Revivals): The Dynamics of
Large and Small Organisations. Routledge.
Kara, A., Spillan, J.E. and DeShields Jr, O.W., 2015. The effect of a market orientation on
business performance: A study of small‐sized service retailers using MARKOR
scale. Journal of small business management .43(2). pp.105-118.
Kazanjian, R.K., Drazin, R. and Glynn, M.A., 2017. Implementing strategies for corporate
entrepreneurship: A knowledge‐based perspective. Strategic entrepreneurship: Creating
a new mindset, pp.173-199.
Kirzner, I.M., 2015. Competition and entrepreneurship. University of Chicago press.
McKenzie, D. and Woodruff, C., 2015. Business practices in small firms in developing countries.
The World Bank.
McKenzie, D., 2015. Identifying and spurring high-growth entrepreneurship: experimental
evidence from a business plan competition. The World Bank.
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Nguyen, T.H., Newby, M. and Macaulay, M.J., 2015. Information technology adoption in small
business: Confirmation of a proposed framework. Journal of Small Business
Management, 53(1), pp.207-227.
Ojokuku, R.M., Sajuyigbe, A.S. and Ogunwoye, A.B., 2014. Human resource management
practices and small scale business performance: Evidence from Osun state, south western
Nigeria. Journal of Emerging Trends in Economics and Management Sciences .5(7). p.1.
Parker, S.C., 2018. The economics of entrepreneurship. Cambridge University Press.
Scarborough, N.M., 2016. Essentials of entrepreneurship and small business management.
Pearson.
Storey, D.J., 2016. Understanding the small business sector. Routledge.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
Online
SMEs in the UK. 2018. [Online]. Accessed through;
<https://www.market-inspector.co.uk/blog/2017/05/facts-about-small-medium-
businesses-in-the-uk>
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