Entrepreneurship, Small Business, and Economic Impact Analysis

This report delves into the multifaceted world of entrepreneurship and small business management, exploring various types of entrepreneurial ventures, including small-scale businesses, scalable startups, large businesses, and social enterprises. It examines the similarities and differences between these ventures, highlighting the importance of innovation, creativity, and risk-taking. The report further analyzes the significant impact of micro, small, and medium-sized enterprises (SMEs) on local, regional, national, and international economies, emphasizing their role in job creation, income generation, and economic stability. The report also discusses the characteristics, traits, and skills of entrepreneurs, addressing whether these qualities are innate or acquired, and how individual backgrounds and past experiences influence entrepreneurial behavior. Furthermore, it underscores the importance of small businesses and startups in fostering social and economic growth, providing insights into the challenges and opportunities within the entrepreneurial landscape. This comprehensive analysis offers a valuable resource for understanding the dynamics of entrepreneurship and its vital contribution to economic development.

Entrepreneurship And Small
Business Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Different Type of Entrepreneurial Ventures and Their relation with types of
entrepreneurship.....................................................................................................................1
P2 Similarities and Differences between Entrepreneurial Ventures......................................3
P3 Impact of Micro and Small Business on Economy:..........................................................4
P4 Importance of Small Business and Start-up's for Growth of Social Economy.................5
TASK 2............................................................................................................................................6
P5 Characteristics, traits and skills of Entrepreneurs and they are Made or Born?...............6
P6 Reflection of Entrepreneurial Personality on Entrepreneurial Motivation and Mind-set. 7
P7 Individual Background and Past Experience Hinders or Fosters Entrepreneurship.........8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Entrepreneur is a person who instead of working for someone else, runs a small business
and is ready to bear all the risk as well as rewards of the ventures, idea, products and services
that are offered by him for exchange of money (Agarwal, Audretsch and Sarkar, 2010).
Entrepreneurship is an activity of establishing a business while taking responsibility for all the
financial risk as to earn higher rate of profit. It is a concept that attracts young professional and
creators of public rules and regulations at par. But it is a rare phenomenon that makes
entrepreneurship more important and significant. This report will state about various traits and
qualities entrepreneurs have. It will also cover different typologies (types) and ventures run by
these self-made individuals. There are certain benefits of entrepreneurship to the local, regional,
national and international economy, as well as the factors which hinders or fosters behaviour of
these individual will also be stated.
TASK 1
P1 Different Type of Entrepreneurial Ventures and Their relation with types of entrepreneurship
Entrepreneurship refers to a process that includes designing, launching and running an
enterprise which is initially considered as small business and offers products as well as services
in return of money. The individuals behind these type of firms are known as entrepreneurs. It has
been described by researchers as a willingness and capacity to develop, organise, and manage a
venture while carrying all risk as to earn profits in future (Barringer, 2012). While all the
definitions have praises for entrepreneurship, there are significant number of start-ups which are
forced to close due to three reasons, lack of funding, bad business decisions and an economic
crisis. That is why entrepreneurs need intra-preneurs who are as skilled as the promoter of
business, but they agree to work for him and do not prefer to take any risk. The difference
between these two is stated below:
Basis Entrepreneur Intra-preneur
Definition Entrepreneur refers to the individual
who sets his own business enterprise.
Intra-preneurs are employee of an
organisation and they take care of
different types of products and
services.
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Approach They use intuitive approach They use restorative approach
Resources They use their own resources They utilise resources of organisation
Risk Liable for all the risk All the risk is taken by company and
not individual
There are various activities which are undertaken by an entrepreneur. These activities
assist in running organization smoothly and efficiently. They also aid in achieving all the desired
goals and objectives (Bosma and Levie, 2010). These activities are: Problem solving, Market
trend analysis, Operation management, Strategy formulation and implementation.
There are different types of entrepreneurship that exist. As every individual have
different trait then others. There are basically four types of entrepreneurs which are mentioned
below:
 Innovative: these are the type of entrepreneurs who invent or improve something new or
existing technique which assist in solving a major issue that is existing in business world.
 Imitating: They are the ones who copy others idea’s instantly. They imitate the innovative
entrepreneurs.
 Fabian: These type of people do not believe in inventing and is satisfied with usual
business activities.
 Drone: These entrepreneurs are old fashioned business man. They run business as per
their mind set which can be changed.
There are different types of enterprises run by these types of entrepreneurs. They are divided into
four major types:
 Small scale business/ lifestyle business: These are the enterprises which are run by single
owner or a family. The entrepreneur has all the authority as a well as decision making
power (Dacin, Dacin and Matear, 2010). This type of venture lacks funds and usually
entrepreneur uses his own savings or loans as to run business. The aim is to earn profit.
 Scalable start-up: These are the companies which are totally different from small business
enterprise. These are run by entrepreneurs who know that their idea or vision can change
the future. There is possibility of high returns in short period which attracts more
investment.
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 Large business: These are the companies which are outgrown their own scope. They have
been through a finite life cycle and via introducing new products and services they are
able to stick in market.
 Social enterprise: These are the enterprises which are developed as to address various
social issues that are hampering people life and working.
P2 Similarities and Differences between Entrepreneurial Ventures
There are certain similarities and differences between various types of entrepreneurship.
Basically, any business is based on three basic concept, innovation, new business creation and
risk taking (Delgado, Porter and Stern, 2010). These concept or factors need to be analyzed by
entrepreneur as to earn profits in future. Every individual has a different point of view and they
perceive things differently. This is what differentiated entrepreneurs, as they are able to spot
opportunities as well as grab them to earn profits. The similarities between various types of
business ventures are:
 Innovative and Creativity: This is the basic factor behind any entrepreneurial activity. As
an entrepreneur is able to utilize various things as to attract and fulfil various needs and
wants of people in a very creative and effective way.
 Challenging and Risk taking: An entrepreneur is a risk taker who is always ready to
exploit opportunities. He like to face new challenge (Drucker, 2014). The company is run
by him while overcoming various issues in a set period of time.
 New Business creation: The Company started by an entrepreneur and it is considered as a
new creation. Every activity conducted by firm is new and assist in developing new
products, services and job.
There are certain differences between these entrepreneurial ventures:
Basis Small business Enterprise(Private) Social Enterprise(voluntary)
Type of Firm Small businesses are started with
forward-looking ideas of an
individual who ready to take risk.
Social enterprises are basically
charitable non profitable
government funded organisation.
Definition These are the non-dominant firm
which are held by entrepreneurs.
These enterprises focus is on
building a better social environment
and fix issues with innovation.
Goal Their aim is to develop them selfThey help in making a effective
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into large corporation (scalable
characteristics required)
sustainable structure and also
promote good ethics and culture.
Kind of Business Majorly seem in form of
restaurants, construction firm, retail
store,etc.
The firms address following issues
like health, environment, education,
etc
Level of Growth High development rate is only
likely if the firm features scalable
enterprise characteristics.
These are the group which are based
on community matters and have
growth chances limited by the
issues.
P3 Impact of Micro and Small Business on Economy:
In last few decades the interest in entrepreneurship is growing at a very fast speed. It is due
to the government efforts and success of the various business houses in western world that lead
to rise in entrepreneurial activity (George and Bock, 2011). It has been highlighted by various
agencies such as OECD stated that micro, small and medium level organizations are becoming
pillar to the whole economic activity in the world. Today these firms are occupying more than
90% of total business activity in United Kingdom. As described by confederation of British
industry, if all the SME’s are allowed to be developed to their full potential then they will
contribute more than 20billion pound in the British economy. The micro and small scale industry
is divided on the following basis:
Category Headcount of Staff Balance Sheet Total Annual Turnover
Micro-Enterprises <10 ≤ £2 m ≤ £2 m
Small Companies <50 ≤ £10 m ≤ £10 m
Medium sized firms <250 ≤ £50 m ≤ £43 m
The SME’s are an active example of being a transmitter of cultures as they assist in
boosting trade at local, regional, national and international level. They are the ones which take all
the risk and contribute a lot more to the economy (Jones, Coviello and Tang, 2011). SME’s are
also responsible for providing various opportunities to people to raise their standard of living.
Basically the impact of micro, small and medium enterprises on local, regional, national and
international level can be stated in the following manner:
Impact of Micro on Small business on
Economy
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Local
 Making new jobs
 Generating income
 Raising standards of living
 Supporting Local community
National
 Adding more into national GDP
 Increasing per capita income
 Stabilising the economy
Regional
 Acts as a means of financial growth
 Regional development of culture
 Augmented revenue generation
International
 Global poverty reduction
 Reducing the gap between poor and
rich
 Faster growth of global economy
Today SME’s are playing a major role in the growth of economy. They account for more
than 99.3% of overall activity taking place in the private sector. They provided employment to
more than 15.7 million people, it makes up to 60% of total employment in private sector (Karlan
and Valdivia, 2011). The combined annual turnover of SME’s was approximately 1.9 trillion that
is almost 48% of total private sector turnover in United Kingdom.
Source 1BPE statistical release, 2016
The number of registrations for VAT and PAYE is also rising, the office of National
Statistics recorded a rise of 2.5 million business which makes it approx. 45% of overall private
sector. Still more than 3 million enterprises are non-registered with the office (Kirzner, 2015).
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Out of these 2.5 million registered business 14% are sole proprietorship while 53% are
partnerships.
P4 Importance of Small Business and Start-up's for Growth of Social Economy
Entrepreneurship is a concept that has changed the whole business environment. At the
beginning it was very difficult for individuals to start a business and run it profitably but with
globalisation and less government control, it has become easy and convenient today. Also that
time there was a threat of insolvency where a person use to lose everything he owned. Now
SME’s are funded by government and they also assist in managing these companies. Today these
organisations are playing a very significant part in growth of economy as well as communities
(Light, 2011). In United Kingdom more than 90% business activity is done by these small and
medium enterprises. They provide stability to the economy just like they did in 2008 when
recession hit UK. There are various programmes ran by government as to ensure that all these
micro, small and medium organisation grow to their full potential.
Today more than the total turnover of these SME’s has reached to 1.9 Trillion pound. The
authorities are trying to create an environment in which these organisation can function smoothly
and flourish. Currently, SME’s are employing approx (Morris, Kuratko and Covin, 2011). 15
million people that is almost 47% of total employed force of private sector. There are more than
5.5 million business which are registered for VAT and PAYE that assist in increasing revenue of
government. There are various benefits of MSE’s that are stated below:
 Creation of job and opportunities: New business assist in creating more job as every
enterprise needs human resource to complete job.
 Generating higher revenue: More sales results in more revenue.
 Economic development of economy: Faster growing SME’s contributes more in
economy in form of taxes.
 Reduction of poverty: Provides job to unemployed which takes them out of poverty.
 Minimising economic gap: Assist in minimising the economic gap that exist in between
rich and poor.
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TASK 2
P5 Characteristics, traits and skills of Entrepreneurs and they are Made or Born?
The business show 2017 was a great learning event that assisted in gaining higher quality
of knowledge. There are many observation which were taken from the event (Oosterbeek, Van
Praag and Ijsselstein, 2010). There are different skills, abilities and traits that are held by various
entrepreneurs as observed. There were many speakers present who stated how they conquered
the market and survived the hardships while growing at higher rate simultaneously. The speakers
stated various methods which can assist in developing entrepreneurial capabilities in people.
Most of the entrepreneurs disagreed with the fact that great leaders and entrepreneurs are born.
They kept on repeating that they are made. A person upbringing, knowledge and experience.
The main icon of the whole show were Jack Ma of Alibaba and Kristy Worthenshaw
founder of Kristy (Santos, 2012). These two entrepreneurs stated various abilities and skills
which are required as to be successful in market. Also after observing their methods, there are
certain traits which have been identified. These traits are:
 Passion: This is what leads a person in his life. If an individual do not have a proper level
of passion then he won’t be able to do anything in his life.
 Vision: An entrepreneur is driven by his vision. He knows where he sees himself in the
future. These are his long term goals which states about an imaginary position where a
person wants to see himself in future.
 Self-Belief: An entrepreneur is a confident individual who knows what he is doing and
how he is doing it. He is 100% sure about his actions.
 Flexibility: If an individual is not flexible and adaptive then he won’t be able to survive
in long run. Entrepreneur needs to learn and lead as to be successful.
 Rule Breaking: Entrepreneurs are rule breakers and they do not follow the set paths as
they like to create their own for achieving success in life.
 Risk taker: Entrepreneurs are risk taker as they know that by taking risk they will be able
to earn higher level of profits. They know that if they are investing money today then it
will have higher rate of return in future.
 Craves learning: Entrepreneurs keep searching for the opportunity to learn new things as
to increase their level of knowledge and ensure that business runs smoothly. This also
allows him in overcoming various issues and uncertainties in future.
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P6 Reflection of Entrepreneurial Personality on Entrepreneurial Motivation and Mind-set
Personality of an individual describes his level of motivation, attitude and also mind set.
An entrepreneur has different types of traits, skills and abilities which differentiates his
personality from others (Storey and Greene, 2010). There are different types of programs which
can used for developing personality of an individual. Entrepreneur does everything as per his
mind set and attitude and it differs from everyone. Basically as stated above by famous
personalities there are certain traits which can be developed in an individual as to become a
successful entrepreneur in future. There are various aspect in an entrepreneur personality that
reflects his motivation level and mind-set. They are stated below:
 Upbringing: If a person has a good upbringing then he tends to adopt various
entrepreneurial qualities more easily than others (Von Graevenitz, Harhoff and Weber,
2010). Parents are the first teachers who teach their kids about the core values on which
we lead our life.
 Lifestyle: Every one belongs to a different type of lifestyle and background which
develops a different perception and mind-set in people.
 Experience: People have different type of experience in their life which changes their
thinking and way of perceiving things.
 Culture: This is a major social factor that changes a person thinking, ethics, values and
mind-set. It can be stated that culture has a major role in development of entrepreneur
personality.
 Environment: An individual acts as per environment around him, if it is favourable then
entrepreneurial quality will be boosted.
These are the factors which have impact on entrepreneurial personality. They change
individual mind set completely. It depend on a person as how he takes various negative factors
positively and develops better skills and qualities (Oosterbeek, Van Praag and Ijsselstein, 2010).
The personality development programmes are used as to ensure that all the qualities are
developed as requirement and no effort is wasted. The entrepreneur personality, his behaviour
and actions are the one which states about his mind-set and motivation level. If he is not
confident while taking decision then it shows that he lacks motivation.
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P7 Individual Background and Past Experience Hinders or Fosters Entrepreneurship
The entrepreneurial qualities and abilities cannot be developed in a short period of time.
It take a lot of time, efforts and environment as to develop these skills. A person passion,
motivation, background and past experience play a major role in fostering these qualities. They
define how an entrepreneur will approach various opportunities as well as issues. An individual
background is made up of upbringing, cultural values, environment, lifestyle and experience that
he had in past. If he had a past that was supportive and positive then he will be able to foster
various entrepreneurial qualities. These factors assist in fostering entrepreneurship qualities in an
individual if he is positive and futuristic.
There are different examples of people who had a different type of background and they
excelled in their field to become world’s most successful entrepreneur. In this list comes the
name of world’s richest person name, Bill Gates (Santos, 2012). He was a small town boy who
always dreamt to be a big successful entrepreneur. He had a passion in information technology
which was trending at that point of time. He grabbed an opportunity and converted it into
Microsoft. Today he owns various organisation under the name Microsoft alone. He is the richest
person alive on planet earth. The second example can be Jack ma who is a founder of Alibaba.
He had a stressful life but he had passion which drove him to become successful. There are few
factors which fosters entrepreneurial qualities in a person:
 Education
 Family support
 Environment
 Network
 Experience
If a person uses these factors in an effective manner then he will be able to accomplish
every single task given to him. An entrepreneur needs to take risk and keep moving forward
instead of following people (Welter, 2011). He needs to be innovative and creative in his
approach so that he can present his ideas in a very effective way. It will assist him in attracting
more investment and customers.
CONCLUSION
As far as conclusion is concerned, it can be stated that entrepreneurship is a very
important activity that assist in stabilising economy from any market shocks as well as it aids in
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developing the communities. There are various methods which can be adopted by government as
to boost these activities. Today these SME’s have an activity level of more than 90% in United
Kingdom which makes them significant. In the second part of report, it is covered that there are
various traits which are required to be developed in a person as to ensure that he takes
entrepreneurial activities in a right way. Also his upbringing and past experience assist in
developing these qualities overtime.
REFERENCES
Book and Journals
Agarwal, R., Audretsch, D. and Sarkar, M. B., 2010. Knowledge spillovers and strategic
entrepreneurship. Strategic Entrepreneurship Journal. 4(4). pp.271-283.
Barringer, B., 2012. Entrepreneurship: Successfully Launching New Ventures, (2012).
Bosma, N. and Levie, J., 2010. Global entrepreneurship monitor: 2009 global report.
Dacin, P. A., Dacin, M. T. and Matear, M., 2010. Social entrepreneurship: Why we don't need a
new theory and how we move forward from here. The academy of management
perspectives. 24(3). pp.37-57.
Delgado, M., Porter, M. E. and Stern, S., 2010. Clusters and entrepreneurship. Journal of
economic geography. 10(4). pp.495-518.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
George, G. and Bock, A. J., 2011. The business model in practice and its implications for
entrepreneurship research. Entrepreneurship theory and practice. 35(1). pp.83-111.
Jones, M. V., Coviello, N. and Tang, Y. K., 2011. International entrepreneurship research (1989–
2009): a domain ontology and thematic analysis. Journal of business venturing. 26(6).
pp.632-659.
Karlan, D. and Valdivia, M., 2011. Teaching entrepreneurship: Impact of business training on
microfinance clients and institutions. Review of Economics and statistics. 93(2).
pp.510-527.
Kirzner, I. M., 2015. Competition and entrepreneurship. University of Chicago press.
Light, P. C., 2011. The search for social entrepreneurship. Strategic Direction. 27(6).
Morris, M. H., Kuratko, D. F. and Covin, J. G., 2010. Corporate entrepreneurship & innovation.
Cengage Learning.
Oosterbeek, H., Van Praag, M. and Ijsselstein, A., 2010. The impact of entrepreneurship
education on entrepreneurship skills and motivation. European economic review. 54(3).
pp.442-454.
Santos, F. M., 2012. A positive theory of social entrepreneurship. Journal of business ethics.
111(3). pp.335-351.
Storey, D. J. and Greene, F. J., 2010. Small business and entrepreneurship. Financial
Times/Prentice Hall.
Von Graevenitz, G., Harhoff, D. and Weber, R., 2010. The effects of entrepreneurship education.
Journal of Economic Behavior & Organization. 76(1). pp.90-112.
Welter, F., 2011. Contextualizing entrepreneurship—conceptual challenges and ways forward.
Entrepreneurship Theory and Practice. 35(1). pp.165-184.
Online
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