Entrepreneurship and Small Business Management: A Report

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ENTREPRENEURSHIP AND SMALL BUSINESS
MANAGEMENT
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Table of contents
Introduction......................................................................................................................................2
LO1..................................................................................................................................................3
P1- Analysis of types of entrepreneurial ventures and relationship to typology of environment3
P2-Dissimilarities and similarities of entrepreneurial ventures...................................................4
LO2..................................................................................................................................................6
P3-Statistical analysis of SMEs impact on economy...................................................................6
P4-Importance of SMEs and start-ups for the growth of social economy...................................8
LO3..................................................................................................................................................9
P5-Comparison of traits and skills between successful entrepreneurs and business managers...9
P6-Assessment of aspects of entrepreneurial personality reflecting motivation and mindset...12
LO4................................................................................................................................................14
P7-Analysis of background and experience for hindering or fostering entrepreneurship.........14
Conclusion.....................................................................................................................................15
Recommendations..........................................................................................................................15
References......................................................................................................................................16
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Introduction
Entrepreneurship and small business are essentially two different aspects of a new business
venture. In this report, a role based analysis would be conducted. Self would in the role of a
management consultant. This report would include major recommendations to the client
regarding the feasibility of the potential business enterprise in London. Prior to the
recommendation statement, a seven part segmented analysis would be conducted. The first
necessary topic would be the examination of the different types of ventures in an entrepreneurial
form. The second segment would the comparative analysis of the mentioned ventures. The third
segment would be in the form of statistical analysis regarding micro and micro business (SMEs)
impact on economy. The fourth segment would include the identification of the impact of the
SMEs on growth of social economy. The fifth segment would include the identification of the
traits of a successful entrepreneur and comparison of same with business managers. The sixth
and seventh segment includes the aspects of entrepreneurial personality and impact on
background on entrepreneurship.
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LO1
P1- Analysis of types of entrepreneurial ventures and relationship to typology of
environment
This segment would include brief definition of the terms ‘Entrepreneur’ and ‘Entrepreneurship’.
It would additionally include analysis of typology of entrepreneurship coupled with the analysis
of variable types regarding entrepreneurial ventures. It would additionally include the
identification of the relationship among the ventures. A small brief about the life cycle associated
with an entrepreneur would be considered.
Entrepreneurship is defined as the setting up of a business or a combination of multiple
businesses for the sole purpose of acquiring a positive turnover in the financial domain (Lupo et
al. 2018). However, this includes the financial risks due to the initial investments or seed funding
required for the establishment of the business. Similarly, an entrepreneur is essentially defined as
that individual that sets up and runs one’s own business in the hope for a positive turnover
(Schaper, 2016). It is characterized by the sole dependency of all rewards and risks associated
with the business on the entrepreneur itself.
One typology of entrepreneurship would include individual entrepreneurship. This type of
entrepreneurship is essentially started by an individual based on seed funding. Also called
lifestyle entrepreneurship, this business is essentially concerned with the individual benefit of the
entrepreneur (Lim et al. 2016). Some of the business approach or ventures that falls under the
same include start-ups, franchise and acquisitions. Start-ups are an organization that is newly
established which is characterized by seed funding by the founder or by investors. These are the
most common in London. However, franchise includes the marketing and selling of a product
that essentially belongs to another organization (Wu, 2015). This type of venture is essentially
executed by entrepreneurs that act as individuals only. Similarly, acquisition includes the buying
of an existing business. It is characterized as being less risky but more expensive in the short run.
The start-ups are the most common types that are associated with individual entrepreneur
whereas the acquisitions are associated with both individual and corporate entrepreneurs. A
franchise however is mostly associated with individual entrepreneurs. The relationship between
the three includes in every aspect individual entrepreneurs are eligible to initialize the business.
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Figure 1: Life cycle of entrepreneurial firms
(Source: isbe.org.uk, 2019)
To summarize, it could be deduced that individual entrepreneurs are associated with most of the
entrepreneurial ventures. Additionally, life cycle of entrepreneurial firms is dependent on the
entrepreneur in the long run.
P2-Dissimilarities and similarities of entrepreneurial ventures
This segment would include the differential analysis relative to three main ventures like lifestyle,
high growth and small profits. Additionally similarities of the same would be discussed. A brief
discussion regarding entrepreneurships coupled with social entrepreneurship would be taken into
consideration.
Difference between the main three entrepreneurial ventures includes the following:
Lifestyle Smaller profit High growth
1-Expansion of the same is
executed through debt
financing (Masurel and
Snellenberg, 2017)
Poorly concentrated on
expansion
Characterized by high growth
and maximization of profits
and market expansions
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2- The major attributes
includes the development of
the hobbies and personal
interests in a business
venture.
Major attributes includes
being content with a decent
living (York et al. 2016).
Major attributes includes
pushing of 'the envelop'
coupled with large scale
expansion coupled with
innovation.
3-Requirement of existence is
for the support for the owners.
Requirement of existence is
for the support for making a
decent living for the business
owners and employees.
Requirement of existence is
for the development of
innovation and business
development in terms of self
organization and associated
companies (Huggins and
Thompson, 2015)
Table 1: Difference between the main three entrepreneurial ventures
(Source: Created by author)
Similarities between the main three entrepreneurial ventures include the following:
Segment Lifestyle Smaller profit High growth
New ideas All the mentioned ventures include the development of new and
innovative ideas.
Risk All the mentioned ventures are characterized by the potential more
risks than that associated with normal organizations.
Entrepreneurs of open
mind
Characterized by risk taking abilities coupled with ventures and
investments in uncharted territories.
Innovation Business modules involve more innovative approach and products that
had been not in use or circulation in the current market.
Success probability In the event that the venture becomes successful, the success is much
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greater relative to those organizations which are not entrepreneurial in
nature.
Table 2: Similarities between the main three entrepreneurial ventures
(Source: Created by author)
Intrapreneurship is essentially defined as the acting of an individual as an entrepreneur who is
employed in a larger organization (Baruah and Ward, 2015). Such individual are characterized
by high self motivations, proactive attitudes and action oriented approaches. The primary target
of such individuals includes the development of innovative products or services within the parent
organizational frame. Social entrepreneurship includes the development of business for social
purposes. Target areas of same include the development management of social issues coupled
with improvement of the communities associated with the same.
It could be concluded that similarities and dissimilarities of entrepreneurial ventures would be
essentially be influenced by the industry it is servicing in the long run.
LO2
P3-Statistical analysis of SMEs impact on economy
This segment would include a statistical based approach to identify the impact of the SMEs in
the UK economy and world economy.
Figure 2: Quantum of persons involved in SMEs across nations
(Source: Papadopoulos et al. 2018)
From the above figure, it is evident that more than 50% of the employees in the nations of
Sweden, Norway and Denmark. This figure projects a growing boom of SMEs in these nations.
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In the segment of finance, these percentages of SMEs individuals provide most of the
commercial and income taxes to the respective nation. Additionally, more number of SMEs leads
to the development of the probability of foreign direct investments in the nation which in turn
leads to development of economy of the respective nation (Majocchi et al. 2015).
Figure 3: Impact of SMEs in UK economy
(Source: market-inspector.co.uk, 2019)
From the above figure, it is evident that SMEs provide major share to the economy of the UK. In
the terms of business, it is evident that 99.3% of the business in UK is incorporated into the
SMEs. As a result, this sector would provide most of the tax shares to the government. However,
due to the small nature of the organization, the turnover is essentially less than large organization
which makes the UK less susceptible to multinational organizations in terms of factory
development.
Concluding, it could be deduced that SMEs essentially project a positive impact on the
organization in the long run. This includes development of the GDP along with the development
of FDI for a particular nation as well as UK.
P4-Importance of SMEs and start-ups for the growth of social economy
This segment includes the identification of the impact caused by SMEs in the social economy of
a nation. The social economy is characterized by the inclusion of those SMEs that falls under the
not for profit segment. Additionally, in this segment, the growth of the social economy as an
effect of the SMEs development would be discussed.
Social economy is defined as the branch of economy that extensively focuses on relationships
among social behaviours, economics and societal gains (Moulaert, 2016). The branch enables the
examination of the ethics, social norms as well as social philosophies that are responsible for
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influencing consumer behaviour. Social enterprise is defined as those organizations that exist as
business organization for the social purposes. Their main aim includes the tackling of the social
problems that exist in modern world.
Corporate social responsibility includes the multiple acts that are executed by organizations for
environment in a sustainable manner (Sheehy, 2015). The social economy results in the
development of the CSR activities which sometimes is tagged as ‘green initiatives’ by multiple
organizations.
In the domain of social economy, the SMEs play a positive role across multiple forms. In
economic form, the SMEs provide more financial support for social causes as they are more near
to the ground reality of social issues. In operations perspective, SMEs enable the growth of the
social economy by providing more services and manpower for social causes (Jamali et al. 2017).
This is because of the fact that modern production modules and the privatization of the
government services would require more manpower to meet the social services projected and
proposed by UK government as well as multiple national governments.
Post the analysis of the importance of SMEs, it could be concluded that the major importance
would be in the domain of operational support. This would be because development of
operational factors would result in financial development for the organization as well as social
causes.
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LO3
P5-Comparison of traits and skills between successful entrepreneurs and business
managers
This segment would include the identification and comparison of the skills and the traits
associated with successful entrepreneurs. Additionally, this section would include comparisons
of the same skills and traits between managers and the successful entrepreneurs. Four common
personal characteristics as well as four common skills for successful entrepreneurs would be
discussed. Examples of successful entrepreneurs such as Richard Branson and Jamsetji Tata
would be taken into consideration for the development of this segment.
Personal characteristics are defined as those characteristics that are projected by an individual in
a particular and tense situation (Woods, 2017). Some of the examples of personal qualities for a
budding entrepreneur would be patience and outspoken. Skills are defined as those abilities that
are acquired by an individual or an entrepreneur through deliberate effort over a short or long
tenure. Some of the skills that are in demand include effective communication and presentation
skills.
Four personal characteristics relative to successful entrepreneurs include the following:
Characteristic Description
Need for achievement This characteristic is associated with the taking
of risk in the business venture coupled with
having a target oriented attitude for achieving
the required target.
Self confidence This is most basic characteristics that every
entrepreneur must have. A successful
entrepreneur essentially project high self
confidence in the risk taken as well as the
potential outcomes associated with a decision.
Motivation A successful entrepreneur is always highly
motivated. This enables the entrepreneur to
influence the potential clients coupled with the
influencing of the seed funders.
Acceptance of fair criticism A successful entrepreneur always accepts fair
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criticism of all the ventures invested in. The
fair criticism is turned into potential sources of
information that may influence the decision of
the entrepreneur in the long run.
Table 3: Four personal characteristics relative to successful entrepreneurs
(Source: Created by author)
The common skills of successful entrepreneurs include the following:
Skills Description
Business Business skills are the most common skills
associated with a successful entrepreneur. This
includes the management skills and extensive
and concise presentation of business related
information to a potential client or a business
incubator.
Technical Technical skills would be common for those
entrepreneurs that are involved in information
technology. However, for those successful
entrepreneurs involved in the servicing
industry, technical skills would include
knowledge and practical expertise of the use of
analytical tools such as MS Excel, Big Data,
and ERP.
Communication Effective communication involves the concise
and effective presentation of required
information to the clients as well as the
employees (Yildiz, 2017). Every successful
entrepreneur possesses efficient
communication techniques.
Human relations Positive human relation skills are the bedrock
of any successful entrepreneurs. Every
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entrepreneur is found to possess excellent
human relations that enable the individual to
stay afloat in the market even in tough times.
Table 4: Four personal skills relative to successful entrepreneurs
(Source: Created by author)
An entrepreneur is essentially made. This would be because of two reasons in the following
order:
 An entrepreneur is developed based on the need of the society and the upbringing one’s
childhood and family tradition. For example, Jamsetji Tata essentially broke the family
tradition of being priests that resulted in the current TATA group.
 Initial attitude of the individual leading to the teenage years. For example Richard
Branson started being an entrepreneur early in his career. Initially being subjected to
failed ventures, the first successful entrepreneurship venture came at the age of 16 for the
individual in the form of ‘Student Magazine’
In short, it could be concluded that major self confidence and communication skills are the most
dominant characteristics of a successful entrepreneurs. However, managers may not project the
same due to their employment status or poor will to act with confidence.
P6-Assessment of aspects of entrepreneurial personality reflecting motivation and mindset
This segment includes the definition of the mindset and the analysis of the aspects that influence
motivation. It would additionally include the identification of four mindsets and situational
factors shaping an entrepreneurial mindset.
In the entrepreneurial domain, a mindset could be defined as the attitude of an entrepreneur in a
particular situation. This includes the modus operandi usually taken by the individual in the
development of the business in the long and short run (Rae and Melton, 2017).
Four mindsets of successful entrepreneurs include:
Mindset Description
Money is secondary This mindset is found in almost all the
successful entrepreneurs. This is because, such
individuals concentrates on innovation and
excellence. This results in the development of
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