Entrepreneurial Ventures: Types, Traits, and Economic Impact (BUS101)

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Entrepreneurship and Small Business Management
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Table of Contents
Introduction......................................................................................................................................3
Task 1 (LO1, LO2)..........................................................................................................................4
LO1 (P1, P2)....................................................................................................................................4
LO2 (P3, P4)....................................................................................................................................8
Task 2 (LO3, LO4)........................................................................................................................12
LO3 (P5, P6)..................................................................................................................................12
LO4 (P7)........................................................................................................................................16
Conclusion.....................................................................................................................................18
Reference list.................................................................................................................................19
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Introduction
Entrepreneurship is the ability of taking the adequate amount of risk to start up a new business
venture and to continue the business in proper manner. In simple words, entrepreneurship is
regarded as both the study of how new business venture is created and the appropriate process of
beginning a new business. Entrepreneur is the individual, who has the courage of undertaking the
creation, ownership, organization and adequate amount of calculated risks. Entrepreneurs take
risk and conduct other business activity to sustain and gain competitive advantages in the market
place. In current scenario, several types of entrepreneurial ventures in the market place that
contribute towards the growth of national economy as well.
This study will outline different types of entrepreneurial ventures along with their similarities
and dissimilarities. Additionally, the contribution of SMEs across the UK towards the growth of
the economy and social development will be discussed in this portion of the study. Successful
entrepreneurs have different traits and skills that create differentiation with other ordinary
persons. Those traits and skills will be added in this paper. Furthermore, the impact of different
environments over fostering or hindering entrepreneurship will be evaluated in this paper.
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Task 1 (LO1, LO2)
Introduction
This portion of the study will outline different types of entrepreneurial venture such as public
entrepreneurship, private entrepreneurship, scalable start up entrepreneurship, large company
entrepreneurship and others. Similarities and dissimilarities among those different types of
entrepreneurial ventures will be discussed in this task as well.
LO1 (P1, P2)
P1 Examine different types of entrepreneurial ventures and explain how they relate to the
typology of entrepreneurship.
Entrepreneurship is not just about conducting business activities. It is the process of designing,
building and running a successful business venture, which is generally a small size business firm
(Drucker, 2014). Entrepreneurs are those responsible persons, who create new business ventures
in the market place (Kirzner, 2015). Entrepreneurs are capable of taking adequate amount of
calculated risk in business with the aim of generating high revenues in business. Government
bodies also encourage entrepreneurship as they contribute towards the growth of the social and
national economy.
Different types of entrepreneurship
Small business entrepreneurship
The overwhelming number of startups and entrepreneurs across the UK are still small businesses.
This is the most popular entrepreneurship type, in which most of the business organizations start
their entrepreneurial journey. Small businesses are hairdressers, grocery stores, travel agents,
plumbers and others. Most of the small-scale business starts with 1-10 employees. In UK, 99.7%
business organizations are listed in the SMEs that contribute for the growth and development of
the country. This type of entrepreneurship has great scope in future to extend their overall
structure of the firm through making progress in business field.
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Large company entrepreneurship
Large organizations have finite life cycles. This type of entrepreneurship mainly focuses upon
hardcore innovation and manufacturing new products for meeting the demands of the customers
through which they generate their profits (Kuratko et al., 2015). Most of the large organizations
across the UK are listed in the private sector that such has great scope in present and upcoming
future as well. Large companies can employ more than 250 employees as they have high amount
of cash flow.
Scalable startup business
Scalable startup takes a complete innovative idea as well as looks for a repeatable and scalable
business model, which will turn this into high growth, development and profitable firm (Picken,
2017). This scalable business enters a large market and takes share away from the incumbents or
they build a new market as well as rapidly expand it. In UK, several scalable startups are crucial
for the UK economy as well.
Social entrepreneurship
Social entrepreneurship refers to organizations those mainly concentrate upon creating products
to solve social issues and needs. They are likely to work for making this world a better place
unlike the scalable startups or other private firms those work for generating profits. Government
bodies also support social entrepreneurship (Dees, 2017). Therefore, this type of
entrepreneurship such has great scope in current and upcoming days to extend their business
functions.
Apart from that, there are also several types of entrepreneurship like necessity entrepreneurs,
lifestyle entrepreneurs, serial entrepreneurs and others.
Types of entrepreneurial ventures
Survival ventures
This type of entrepreneurial ventures helps entrepreneurs to provide basic substances. In many
cases, this has been observed that survival venture conducts their business operations without
any permission. These types of firms exist for helping those individuals who have left nothing
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for reinvestment. They provide basic financial needs and funds to the individuals. Small business
organizations and startups are interlinked with this type of entrepreneurship as startups get finical
support and additional benefits from the survival ventures.
Managed growth ventures
These business ventures look for stable growth and they have a workable business model. They
always look for improving their overall business performance as well as extending the market
shares through expansion and launch of new products (Bastesen and Vatne, 2014). They focus on
managing their operation to improve their profitability and growth. Both of the scalable business
entrepreneurship and large-scale business entrepreneurship are linked with this type of managed
growth ventures as they always believe in entering new market and launching new products for
managing and extending business operations and performance simultaneously.
P2 Explore the similarities and differences between entrepreneurial ventures.
Different types of entrepreneurial ventures have many similarities as well that are as follows:
 All types of entrepreneurial ventures are used to take calculated risk for generating profits or
for sustaining in the market place.
 Different entrepreneurial ventures use different business strategies to perform their various
business functions (Kellermanns et al., 2016). The ability of appropriate selection of business
strategy is added in every type of entrepreneurial ventures.
 Entrepreneurial ventures are innovative and they all use innovation approach in their
business. Therefore, they have great scope in current and upcoming days to extend their
business functions.
Apart from few of the similarities, these different types of entrepreneurial ventures also have
several differences or dissimilarities.
Social enterprise Small business enterprise Large business enterprise
Social enterprise conduct
business operations to
enhance the social condition
and for development of the
Small business enterprise
manufactures products to
attract and sell to customers.
Generated profit they use for
Large company manufactures
products to meet the
expectations of customers and
to sell a huge amount of
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community (Ridley-Duff and
Bull, 2015).
development of the firm. products. They mainly focus
to generate maximum amount
of profits instead of making
products for development of
the social economy.
Social enterprises mainly
have volunteers those work
for the organizations.
However, they also have few
of workers for conducting
other operations across the
firm.
Small business enterprise can
employ 1-10 employees and
medium size enterprise can
employ up to 50 employees
(Schaper et al., 2014).
Large companies can employ
250 employees or more than
the figure. Many of the large
companies such as Tesco,
Primark and others have
almost 100000 employees.
The government bodies and
donations mainly fund social
enterprises.
Small enterprise mainly uses
their own capital or takes
bank loans for gathering
funds for the business.
Large organizations have
several active investors those
are always ready for
providing financial assistance
to the company.
Table 1: Differences between social enterprise, small and large enterprise
(Source: Created by learner)
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LO2 (P3, P4)
P3 Interpret and assess relevant data and statistics to illustrate how micro and small
businesses impact on the economy.
According to the recent UK statistics, SMEs are responsible for the growth of UK economy.
Additionally, high contribution of SMEs towards the development of the social economy of UK
is another important consideration. As per the survey of the last year, in UK, there were more
than 5.7 private organizations down by 28,000 than 2017. Since 2000, this increasing number of
new business ventures fall in 2018 for the first time. UK has 2.2 more businesses than in 2000
(Rizos et al., 2015). Additionally, along with the increasing number of SMEs, rate of
employment also increases. Due to this reason, SMEs are responsible for the majority of gross
job creation since last five years. However, these 5.7 million private organizations are equal to
99% of the exhaustive business organizations of the UK. In 5.7 million private companies
majority of the organizations are micro business those have the capacity of employing maximum
9 employees. This type of micro businesses are accounting for 96% of the total businesses.
Figure 1: Private sector business in UK
(Source: Sainidis and Robson, 2016)
All these business originations have great scope in future to expand their business functions due
to high demand in the current market place. They are improving their business functions to meet
the expectations of the customers. Additionally, they contribute for the growth and development
of the UK economy (Giaoutzi et al., 2016). As per the consideration of the UK statistics, SMEs
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contribute almost 45% of the total UK employment and 33% of the GDP. The combined annual
turnover of the UK based SMEs was £2.2 trillion that is equal to the 53% of the total private
sector turnover.
Figure 2: Share of business in UK
(Source: Blackburn, 2016)
In 2018, exhaustive employment in SMEs was 16.3 million that is 60% of the exhaustive private
sector employment across the United Kingdom. As per the records of 2018, UK has only 1.1
million companies, where more than 36% of the total UK employment is employed and this is
fact that this number is increasing day by day. Due to high demand of products and services, the
number of companies, especially SMEs is raising rapidly to meet the expectations of the
customers. In London, business in the retail sector accounted for 34% of all turnover and 19% of
employment. In addition to this, the manufacturing firms in the London accounted for 14% of
turnover and 10% of employment (Ayandibu and Houghton, 2017). Furthermore, in London,
17% of all businesses accounted for construction business sectors, nevertheless only 8% of the
turnover and 8% of the total UK employment. There are also many of the organizations across
the UK such as Nevel group that contributed 10% of its profits towards the development and
betterment of the community.
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P4 Explain the importance of small businesses and business start-ups to the growth of the
social economy.
Small size business organizations are the majority of the UK business industry that covers more
than 93% of the total business industry. Additionally, SMEs contribute for the social growth and
development as well. Many of the UK organizations share their profits with charities and social
enterprises for influencing the development of the community. However, SMEs provide
employment to the local people and an opportunity to enhance their life leading style.
Figure 3: Businesses by region
(Source: Harrison and Baldock, 2015)
As per the statistics, in 2018, there were 1563 businesses per 10,000 residents in the London.
Total London has more than 1.1 million of businesses; most of them are start ups. However,
these all organizations are responsible for gross job creation in the locality. This allows
influencing the GDP rate of the country and positive economic as well as social growth. Due to
massive increase in employment since last 5 years, UK has successfully represented itself as one
of the economic developed country. However, compared to last year the employment rate in
London has increased by 2.3% that is also good sign for future of the UK economy (Giaoutzi et
al., 2016). These exhaustive UK based SMEs have already contributed huge amount towards the
social development. Approximately, the combined contribution of the SMEs across the UK is
£2.2 trillion for bringing positive changes throughout the community.
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Conclusion
From the above discussion, this can be concluded that entrepreneurship is all about selecting the
appropriate business strategy and implementing the strategy at the right place. However, several
types of entrepreneurial ventures can be found in the current market place including large
company entrepreneurship, scalable business entrepreneurship and others. Similarities and
differences have been added as well.
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Task 2 (LO3, LO4)
LO3 (P5, P6)
P5 Determine the characteristic traits and skills of successful entrepreneurs that
differentiate them from other business managers.
Successful entrepreneurs like Mark Zukerberg, Richard Broanson and Bill gates have different
characteristics and personality from each other that separates them from other normal people.
They have in born talents, which help them to become successful in their market place. However,
there are other entrepreneurs, who do not have the same skills and traits like those successful
entrepreneurs (Premand et al., 2016). However, every successful entrepreneur has some
characteristics and traits that differentiate them from simple business manager. Skills of different
entrepreneurs have been described below:
Communication – Any business organization can face several problems in their organizational
activities if they failed to represent good communication traits in their organization. It is the
common nature and trait of different entrepreneurs that they always make good communication
with their different employment base in order to move up the efficiency and affectivity of their
entire organization at certain extension. As an instance, Steve Jobs is a very good communicator,
which helps to determine the need of his consumer and employment base without having much
difficulty.
Teamwork and interpersonal skills – Almost every single entrepreneur has good interpersonal
and team working skill since they know that they cannot control a big organization all by
themselves (Marques et al., 2018). They include their employees in different teams and after
that; they engage those teams with several integral parts of those organizations. Entrepreneurs
always make good relationship with their teams since they know that it is the key of enhancing
the productivity of any organization. They also evaluate the performance of different teams by
their interpersonal skills in order to provide rewards for appropriate employers.
Planning and managing – Every entrepreneur generally conducts some planning process before
taking any kind of important decision. They plan different process for recruitment and selection
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