Business Entrepreneurship and Small Business Management Report

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BUSINESS ENTREPRENEURSHIP AND SMALL
BUSINESS MANAGEMENT
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Table of Contents
Introduction................................................................................................................. 3
LO1............................................................................................................................. 4
LO2............................................................................................................................. 7
LO3........................................................................................................................... 10
LO4........................................................................................................................... 13
Conclusion................................................................................................................ 15
Reference List...........................................................................................................16
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Introduction
An entrepreneurship plays a vital role in the economy of nation. In this discussion,
different aspects related to entrepreneur and entrepreneurship will cover important
factors that make the business of start-up efficient and effective. Different topology of
entrepreneurship and its interrelationships with entrepreneurial ventures will be
discussed in this context. This will also explains the similarities and differences
between entrepreneurial ventures. The importance of SMEs in the economy will be
evaluated considering the effect of small scales enterprises in the UK economy
through SMEs statistics.
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LO1
P1 Examine different types of entrepreneurial ventures and explain how they relate to
the typology of entrepreneurship.
Introduction
This context includes the discussion regarding the entrepreneurial ventures and related
topology of entrepreneurship. The discussion starts with definition of entrepreneur and
entrepreneurship.
Definitions
In the context of Oviatt and McDougall (2015), entrepreneurship is defined as the
process where an individual or group create an idea or opportunities in the context of
economical, social and political sector.
As opined by Ogden and Valley (2017), an entrepreneur is defined as an individual
whose is self-employed. In other words, entrepreneur is an individual that takes all risk in
order to run its business efficiently to achieve the rewards from its business process.
Analysis of topology of entrepreneurship
Topology means a classification of something into different parts and in this context,
entrepreneurship are classified into Individual entrepreneurship, corporate entrepreneurship
and Public sector entrepreneurship (Zhao, 2017). In this part, ownership will be focus of the
discussion that explains different types of entrepreneurships. Individual entrepreneurship
is kind of business that is started by individual in order to achieve a better lifestyle.
Public sector entrepreneurship is a business strategy implemented by government for
incorporating better services in the existing one. Corporate entrepreneurship is an
entrepreneurship where innovative ideas and strategies are used by enterprise in order to
expand its existing market. In Corporate entrepreneurship, the access of competitive
advantage, profitability and overtaking target market are important motives for an enterprise.
New development, franchisee, acquisition, start-up, joint venture and public-private
entrepreneurship are different entrepreneurial ventures. Thus, these entrepreneurial
ventures are discussed below:
New Development
New development is actually an addition of new business or project in the existing project of
organisation. Usually, this new business is found by Research and Development of
organisation. Large multinational companies or public sector companies do new
development in its project. For example, Brexit Ministerial Department is new incorporation
of UK government that handle the concern trade activity in the public-private sector.
Franchisee
Franchisee is a kind of venture that requires permission for producing, selling and
distributing the products of another enterprise. Usually, this entrepreneurship is costly but it
brings a less risk in conducting its business because products are belongs to brand
organisation whose services are famous and known for people (Nyadzayo et al., 2016).
For example, buying a MacDonald’s franchisee or Toyota’s car dealership is Franchisee
entrepreneurship.
Acquisition
An acquisition is a type of venture where an individual or enterprise buys another business
or enterprise established by someone else. The extent of risk is low as the business is
already set-up in the market. The business, which is being bought by another enterprise
usually, has trusted customer, workforce and good relation with bank. Therefore, acquisition
is very costly to buy for an individual or corporate.
Start-up
Start-up business is newly established firm which never existed in the market before. The
founder has performed the responsibilities of manager, as workforce is less in start-ups.
Start-up is a type of venture where investors are very less and therefore, owner has to take
business loan from financial institute. This is most common form of business, which is
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conducted by individual entrepreneur. The best example of start-up is new restaurant
starting in London that will contain few employees to manage its business.
Joint venture
Joint venture conducts its business with the help of two or more organisation collectively.
This concept of business brings two competitors together to conduct a same business.
Usually, joint venture is conducted by corporate and partially conducted by public sector.
Sony-Ericsson is joint venture where Sony and Ericsson handle a project together.
Public Private Venture
The public private venture is a kind of business or project that is handled by private and
government sector together. There are many schools and hospitals are built up with the help
of public private venture business activities.
Interrelations of topology with ventures
 Joint ventures, New Development and Public private ventures are interrelated with
the Public sector entrepreneurship.
 Acquisition, joint ventures, New Development and Public private ventures is also
interrelated with corporate sector entrepreneurship.
 Start-up and Franchisee is interrelated with individual entrepreneurship.
Life cycle of Entrepreneurial firm
Figure 1: Life Cycle of Entrepreneurial venture
(Source : Salamzadeh and Kawamorita, 2015)
The above figure shows different stages of entrepreneurial ventures that analysed from birth
of a company to its maturity stage in the business context. According to different stages,
managerial skill required to manage the business and other factor related with enterprise
business. In the first stage, collection of resources and making relationship with different
stakeholder is taking place. Second stage requires a knee evaluation to finances and profits
making through business strategies in life cycle of entrepreneurial venture. In the maturity
stage, manage need to implement business strategies in order to sustain and expansion of
business.
Conclusion
In the above context, mainly three topologies of entrepreneurship is discussed along with
different entrepreneurial ventures. These topologies and entrepreneurial ventures
interrelated with the scenario of businesses in London, UK. It shows that all ventures
business scope and size is different and how much a government is involved in its business
process for development of nation.
P2 Explore the similarities and differences between entrepreneurial ventures
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Introduction
This context comprises of analysis of three types of entrepreneurial ventures those
are lifestyle venture, small profit venture and high growth venture. The differences
and similarities among the ventures clear out many factors involved in their business
process.
Differences between entrepreneurial ventures
Lifestyle ventures
Small companies that run its business in order to achieve a better lifestyle come
under the category of lifestyle venture. Usually, start-up companies and micro
business runs this kind of business to fulfil personal requirement. In this business,
owner can follow any attire to attend meeting and can conduct meeting in any hours
of time. Thus, the flexibilities are more in the business environment of lifestyle
venture. Lifestyle venture gets the capital from debt financing (Neumeyer and
Santos, 2018).
Small Profit venture
Many features of small profit venture are similar to lifestyle venture such as size and
scope of business. Small profit venture conduct its business in order to sustain in the
existing market. This venture does not have any intention to make millions of dollar
from its business. These companies are excessively large and run its business to
lead a decent life (York et al., 2016).
High Growth Venture
These ventures conduct its business in order to achieve business goal for an
organisation. The main motive behind its business is to make high profit in revenue
generation and it want to grow the business of organisation. These ventures extend
its business by incorporating its innovative idea in the business strategies. Large
multinational organisation comes in this category attract small lifestyle ventures for
investing in its business (Brown and Mawson, 2016).
Similarities between the ventures
There are few factors exist in business process of all these ventures mentioned
above which is common are described below:
 All the ventures irrespective of their scope and size have new idea to start its
business. Thus, it can be said that driving factor behind conducting business
is same for all type of ventures.
 All type of entrepreneurial ventures faces financial risk and non-financial risk
while conducting its business. However, small and lifestyle venture faces the
financial risk more than high growth venture but large-scale organisation also
faces financial issues sometime in their business.
 Open-minded person can do entrepreneurship only as an entrepreneur has to
think out of box in order to start business and manage its existing business.
These features are found in owners of all type of ventures.
Intrapreneurship and Intrapreneurs
Intrapreneurship is an entrepreneurship inside the organisation. In other words, it is
a process where employee takes risk in order to resolve the issue related to
business process inside the organisation.
Intrapreneurs is an individual in an organisation who have potential to take initiative
regarding business in order to produce innovative product and quality services.
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Conclusion
In this context, different entrepreneurial ventures is discussed which conveys the
motive behind conducting the business. The analysis of differences and similarities
among the mentioned entrepreneurial ventures reveal few common and distinct
factors in business process.
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LO2
P3 Interpret and assess relevant data and statistics to illustrate how micro and small
business impact on the economy.
Introduction
This context analyse the statistics of impact or influence on the economy of nation
due to micro and small businesses. It also explains the impact of SMEs in the
economy of London, UK specifically.
Contribution to SMEs to economy
Small and micro business influences the economy of nation with its output. SMEs
output contribute in the gross domestic product enhancement. Considering the
economy of UK, 60 to 70 percent of employment is provided by small enterprises.
This scenario is also has been observed in other nations in the global context. Due
to financial crisis happened in past decade, it affected the business of large
organisation badly. This effect downsized the large organisation and it directly affects
outsourcing. Consequently, the weight of SMEs increased in the economical context
in a nation. Productivity and innovative idea are mostly come from the small-scale
enterprise. It can be said that SMEs help government to reduce the poverty in the
economy.
Until the year 2018, the micro business enhanced to 96 percent, which is 5.3 million
micro businesses, has been established in UK market.
Figure2: Establishment of SMEs until 2018
(Source: Al and Khan, 2018)
Role of SMEs in economy of UK
This discussion mainly focuses on the statistics of England that present the role of
SMEs in the economy of UK. It is calculated that 88 percent of SMEs are located in
the England only of United Kingdom and 33 percent of business enterprise is located
in South East.
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Figure 2: Statistics of impact of Small and Micro enterprise in UK
(Source: Rhodes, 2016)
According to the data, London has 45 percent of employment, as there SMEs are
less than South West of UK. In few areas of England such as London and West
Midland, the priority of large-scale organisation is more than small enterprises. This
is the reason of less employment rate in the London where mostly large organisation
conducts their business.
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Impact of SMEs on London Economy
Figure 2: Impact of SMEs on London
(Source : Aristovnik and Obadić, 2015)
According to data of 2012, total SMEs in London was 80,085 that gave business
around 99.8 percent in the business sector. In that year, SMEs provide employment
around 49.8 percent in London itself, which was 2.3 million in number (Burns, 2011).
Conclusion
This part mostly included statistics, graphs and table to show the impact of small
businesses on the economy of UK. From this context, the data cleared that SMEs is
responsible for employment growth in the UK’s different parts. This discussion
concentrated on the impact of SMEs on England’s economy and London’s economy
specifically.
P4 Explain the importance of small businesses and business starts-ups to the
growth of social economy
Introduction
In this section, meaning of social economy is defined and corporate social
responsibilities will be described.
Meaning and Usefulness of Social Economies
Social economy is an economical concept, which states the relationship between
social behaviour and economics through ethics of an enterprise. This concept
influences the behaviour of consumer toward the enterprise business activity.
Usefulness of Social Economies
The social economies benefit the customer by motivating the social economical
enterprise such as Voluntary organisation to provide service to people. These
benefits are mentioned below:
 Enterprises implement projects that relate to welfare of people and society.
 Social issue will be reducing by social activities of enterprise and people’s life
will change in a positive way (Nitsch, 1990).
 The most important aspect that benefits the society is employment of
vulnerable group that enhance the economical growth in society.
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Importance of SMEs on CSR
SMEs effect the Corporate Social Responsibilities by providing the employment to
people that would enhance their financial status. In this way, people would become
able to meet their daily requirement. Thus, SMEs reduce the poverty in the society,
reduce youth unemployment and increases the economical sustainability.
Conclusion
By analysing the meaning of social economies and social responsibilities of
corporate, it is understood that complete economical and social structure can be
changed with business activities of social enterprise.
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LO3
P5 Determine the characteristic traits and skills of successful entrepreneurs
that differentiate them from other business managers.
Introduction
This section shall discuss personal skills and characteristics of entrepreneurs.
Characteristics including self-confidence, openness to change, highly motivated and
others are the points of discussion.
Personal characteristic is an individual’s qualities that show an entrepreneur’s
personality (Edwards-Schachter et al., 2014). Skill is the capacity and ability of an
individual acquired through systematic, sustained, and deliberate effort used to carry
out complex activities.
Successful entrepreneurs have following personal characteristics.
Openness to change
It refers to an individual’s conscious awareness and level of acceptance that change
is required across a range of scenarios and situations. Entrepreneurs identify and
accept needs for change. They support people, who are willing to facilitate a change.
They have a drive or appetite for involving in change process. A successful
entrepreneur brings change in three areas such as process, context and content.
Self-confidence
Successful entrepreneurs have trust in their judgement and abilities, which enable
them to express opinions and knowledge openly without any difficulties (Kaur and
Bains, 2013). They are confident in all fluctuating situations. They build self-
confidence after suffering consecutive failure. Self-confident entrepreneurs create a
lasting impression on customers, suppliers and other stakeholders.
Highly motivated
Entrepreneurs are self-motivated, as they are ready to gain opportunities and desire
to meet certain business standards. They are optimistic that make them keep going
and accomplish goals. They can find a reason to complete a task without needing
others’ encouragement to do the same. They surround themselves with catalysts
that can make them achieve great things. Accepting challenging tasks and involving
completely is another characteristic of highly motivated entrepreneurs.
Need for achievement
It involves a person’s desire to accomplish something with a high standard.
Entrepreneurs put repeated, intense and prolonged efforts to achieve something
difficult and earn success (Achchuthan and Kandaiya, 2013). Internal drivers or
intrinsic motivation drives this characteristic. Highly motivated entrepreneurs tend to
perform difficult tasks to achieve success and growth.
Entrepreneurs have following key skills that make successful in a professional
career.
Communication skill
Communication is a way to interact with people. Entrepreneurs try to improve
communication skill consistently, as they have to work with employees, clients,
suppliers and others. Having an effective communication skill help an entrepreneur
to accomplish presentation, training, elevator pitches, and project explanation
successfully. Communication skill is important for entrepreneurs to listen deeply,
state differentiation and value, manage non-verbal cues and manage expectations of
employees.
Decision-making skill
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