Entrepreneurial Ventures and Their Impact on the Economy: A Report

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ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT

INTRODUCTION
Entrepreneurship can be considered as the activity of running and setting a business in which an
entrepreneur takes responsibility for risk and reward in the hope of profit. Today there are many
small, medium and large businesses are coming into the market to sell their services with the aim
of earning a profit. Any person can be an entrepreneur if he has sufficient characteristics of
entrepreneurs like smarter thinking to develop new ideas. This assignment report is briefly going
to explain about the entrepreneurial ventures and their relation with entrepreneurship typology
and also the differences and similarities exist between them. This report will also make an
analysis of the impact of small businesses on the economy by highlighting its impact on the
global-local and national economy. Further, the key aspects like traits, characteristics and skills
of entrepreneurs will be discussed to know its reflection on entrepreneurial mindset and
motivation along with with this the influence of personal experience and background factors on
the entrepreneurship will be analyzed in that assignment report.
LO1
P1
Different type of entrepreneurial ventures and their relationship with the typology
Entrepreneurship
it is the process of starting a new business and also includes a study of how business is created.
In the entrepreneurship, an entrepreneur generates a new idea to develop some new product and
those products are sold in the market with the aim of profit making.
Type of entrepreneurial ventures
There is a different type of entrepreneurial ventures formed in the market by bringing new idea
and innovation with the aim of achieving some objectives. Some types of entrepreneurial
ventures are as follows:
Small business entrepreneurship
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Small businesses are operated on a small scale and are less profitable. Due to their access to a
small geographical area, they are not able to attract venture capitalist. They aim at earning profit
to fulfil their family needs and funded via friends or family or other government loans. Examples
are electricians, plumbers, carpenter etc.
Scalable startup entrepreneurship
In this kind of ventures, entrepreneurs’ believe that their idea and vision will bring changes in the
world and funding source of these ventures is venture capitalist. Their goals are to find out a
scalable and repeatable business model. There are high risk and outsize return in that venture.
Example are Facebook, online shopping portals etc.
Large company entrepreneurship
Large companies focus on innovation and they are offering new products in the market. Large
companies develop new products and services through partnership or acquisition of a new
company and using a large scale of operation to provide services in the market. Examples of
large businesses are Google, Samsung, and Microsoft etc.
Social entrepreneurship
In this type of venture, the entrepreneurs only develop those products and services which are
useful for public and they do not aim at profit-making through an exchange of services and only
want to make the world a better place by maintaining the welfare of the society. The social
entrepreneurs are focused upon social interest rather than self-interest Example safe point trust
organization and James Dyson Foundation.
Relationship with entrepreneurship typology
Individual entrepreneurship
This kind of entrepreneurship is done by a single entrepreneur who solely takes responsibility for
all market gains and losses. Small business entrepreneurs use this typology in their
entrepreneurship.
Corporate Entrepreneurship
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In this typology, entrepreneurs deal with the existing corporation to get higher profit. Large
company’s entrepreneurs use this corporate typology
Social entrepreneurship
Social enterprises apply this typology of entrepreneurship because they work for society and
provide their society to create the wealth of the public.
P2
Similarities and differences between entrepreneurial ventures
Similarities
Small, scalable, large and social entrepreneurial ventures are operating their business to gain
some kind of profit like social services or monitor items. All these ventures contribute to
economic development and they organize business activities by putting some finance and other
resources in business. New idea and innovation are required by all these ventures to start their
business in the market. All ventures provide their offerings in the market and serve a community
group to receive the profit. These ventures are established by entrepreneurs or group
entrepreneurs with their smarter thinking and innovation and also these ventures requires some
infrastructure to operate business functions
Differences
Area small business
entrepreneurship
Scalable startup
entrepreneurship
Large scale
entrepreneurshi
p
Social
entrepreneurship
meaning Small businesses
are smaller in
their size and
operate their
business at a very
small scale to
fulfil their
financial needs
These ventures
focus on the
repeatable and
scalable business
model and bring
great idea and
innovation to
attract different
Large scale
businesses utilize
large scale to
operate their
business and serve
a large number of
the public with
their offering to
In this venture,
the business is
operated to
provide social
services and they
do not aim at
earning profit
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venture capitalist gain higher
market share
aim They mainly aim
at small profit
making to fulfil
their family needs
They aim at
growing business
with high
investment
They want to gain
higher market
share and higher
profit
They just want to
maintain the
welfare of the
general public and
facilitate them
with social
services
funding They get fund
from family or
friends and small
business loans
The funding
source of these
ventures are
accelerators and
venture capitalist
Funding is done
by government
banks and
stakeholders
Funding from
government or
social authority,
donation
Growth and
scope
Their growth is
slow and scope is
limited to a
geographical
market
Higher growth
through higher
investment and
innovation
These ventures
are growing and
developing and
expanding their
business at the
global level
The scope is
limited and they
are growing very
fast due to the
high involvement
of social
entrepreneurs
example Grocery stores Instagram, twitter
etc.
Microsoft and
Dell
British red cross
society
M1
Understanding of entrepreneurship in both the public and corporate sector
Public sector entrepreneurship
In the public sector entrepreneurship, there is more innovation possessed by the entrepreneurs
and the development of new technology is done to increase economic development. Public
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entrepreneurs act with the government and provide public services with new ideas and better
innovation technique. They focus on building government capacity for public innovation and
leading across the private and public sector. In the public sector, the entrepreneur utilize their
skills, knowledge and entrepreneurial oriented behaviour to make effective decision in the
organization with full government support that encourages innovation in the public sector
business
Corporate sector entrepreneurship
It includes the type of entrepreneurship which is done inside of an organization and also called as
Intrapreneurship. It is a process of developing a new process, products inside of a company that
helps in the growth of a company by bringing the actions and thoughts of an entrepreneur. A
corporate entrepreneur works with an organization and does an act of entrepreneurship for
development and growth of an organization. There are three factors that enable Intrapreneurship
 People (entrepreneurs who possess skills and knowledge in the organization)
 Process (process and system of the organization which facilitates entrepreneurship)
 Place (an environment that enables learning and growth through entrepreneurship)
LO2
P3
Impact of micro and small business on the economy
Micro and small businesses are providing a significant addition to the economy of the world.
Today they are creating employment and providing jobs to unemployed people. They are also
contributing to the GDP of the nation to improve the growth level. In the starting of 2018, there
were more than 5.5 million small businesses in the UK. The private sector employment increased
by 2% and private sector business failed by 0.5%. in the total private sector businesses the small
businesses accounted for more than 99.2% and at the starting of 2018 almost 99.9% business
was small and medium-sized. Small businesses were accountable for creating 16.2%
employment which was 60% total private sector employment. SME’s have provided more than
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51% of total annual turnover which was almost £2.2 trillion. In the developing nations of the
world, SME's are contributing 32% to the national income and 44% in total employment.
Hence, the micro and small business sector are providing its huge support to the economy by
decreasing unemployment rate and increasing the revenue for the government. Government is
helping micro and small businesses by providing various small business loans facility to expand
and grow in the market. There is a reciprocal relationship exist between small business and the
economy. The developed economy of a nation provides benefit to the small businesses to get
more developed while the small businesses also contribute to the growth of the local, national
and international economy of the world.
Role of the small businesses in the economy
The size of small and medium-sized businesses is quite small because they are employing less
than 250 people in their organisation. SME’s are creating social value and social security through
rapidly increasing the employment rate in the country. They sell their offerings in the market to
satisfy the social needs of the community.
 At the end of 2018, the annual turnover of the SME's increased by more than by £2.2
trillion
 Due to rapid growth and expansion of small and medium enterprises almost 16.3 million
people received employment in the UK
 The foreign exchange rate and tax improve by an increment of 10%. The private sector
especially micro and small businesses are providing higher tax to the UK’s government
 The SME's are creating a wealth of the general public by reducing poverty in the nation
 The economic development of the UK enabled small and medium businesses to expand
their business at the global level through globalization trading.
P4
Importance of small business and start-ups in the social economy
Start-ups and small businesses are playing a big role in creating innovation, employment,
adaptability for the local public of the country that is empowering the social economy of the UK.
The social economy of the country is getting improved day by day through the availability of the
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number of jobs, social security, products and services for social use and social amenities and
today many small businesses and start-ups are entering the market with their innovative offerings
that satisfy social needs and improves the social wellbeing of the people. some estimation can be
like that, the employment rate is increased by almost more than 0.6% and more than 10% of
sales increased by share of new start-up businesses. Small businesses are providing strength to
the UK economy to stay competitive in the market that would help in attracting more visitors and
investor of the world. Start-ups businesses are offering 33% employment while at the initial
stage they have employed less than 10 employees in their organisation. Large businesses are
largely depending upon the products and services offered by the small business because they
help in operating their day to day activities.
M2
Impact of small, medium and large businesses on the economy
Micro businesses
According to the business population report of 2018, Micro businesses are employing between 0-
9 employees in the organisation and generating 21% annual turnover and they are accountable
for providing 33% employment by contributing 96% business in the private sector.
Small businesses
These are employing between 10-49 employees and accounted for 15% employment. They are
generating an annual turnover of 15% and total business is limited to 4% in the overall private
sector
Medium businesses
They are employing more than 50 employees and less than 249 and responsible for an annual
turnover of 15% and their offering in employment rate is 13% but they are limited to only 1% of
private sector business
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Figure 1 business population estimates 2018
Source: (gov.uk, 2018)
Large businesses
These are the businesses that are operating a business on a large scale. They are large in terms of
their size and scope. Large businesses are employing more than 250 employees and accountable
for creating 40% employment in the UK. Annual turnover generate by them is 40% and they
have no contribution to the private sector business it is almost 0% of the total private industry.
Hence, the small, medium and large businesses have a great impact on the economy as they play
an important role in the economic development of the country by increasing the GDP of the UK
and also increasing the employment rate and consisting a big part of private sector business
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LO3
P5
Characteristics, skills and traits of successful entrepreneurs
There are some attributes represent the effective entrepreneur personality and it has been
differentiating with other organizational managers. They have effectual skills characteristics and
traits which is helpful to perform their entrepreneurial responsibilities (Leitch and Volery, 2017).
There are some set of characteristics and skills of entrepreneurs are followings:
Self-Motivated
Self-motivation is the most important traits in entrepreneurs when they want to achieve
something the push their limits and grabs all the opportunities. These peoples are not bounded to
give an answer to any one of their actions. Effective entrepreneurs are forecasted and dedicated
to their procedure and look forward to achieving success (Leitch and Volery, 2017).
Taking Risks
Effective and potential entrepreneurs have that analysis to take the risk of achieving an efficient
result. Nobody get success without taking a risk and facing challenges, they have their mindset
for performing according to their plans and take the risk to achieve more. Calculation of risk and
achieving more with effective plans are the most important part of an entrepreneur (Leitch and
Volery, 2017).
Flexibility
Every potential entrepreneur is keen to make changes and willing to change in their way of doing
work and achieving tasks (Leitch and Volery, 2017). Entrepreneurs are top of the organization
and they are always ready to make changes in their process and products as per the requirement.
Flexibility is sometimes helpful for identifying issues and also makes preventions for them.
Passion
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Efficient entrepreneurs are passionate about their goals and objectives, they keen observe to their
products and services which has been provided by them to customers and make effective changes
to grow them. They are dedicatedly following their principles for achieving path and make
effective changes to grab opportunities (Viinikainen et al., 2017).
Network building
A successful entrepreneur has a proper analysis that the importance of making effective networks
and connection in the corporate world which can be helpful of collaboration and getting useful
resources. Networking is the prime part of entrepreneurship which leads to success by managing
various tasks and activities (Lin, 2017).
SKILLS OF ENTREPRENEURS
In this corporate world, there are various entrepreneurs who have various skills to manage their
activities and tasks for achieving success (Mukherjee, 2016). There are various abilities which
must be in entrepreneurs to achieving their oriented objectives and these skills and qualities are
following:
Excellent communication
Effectual Communication is most important to convey information and on the point of view of
entrepreneurs, communication is the leading skills which represent the attentiveness of
businessman. Communication is required to make effective interactions with other peoples and
also useful for influencing as per the requirement. This process is also useful for an entrepreneur
to set up an effective image on the premises (Mukherjee, 2016).
Ability to raise fund
Successful entrepreneurs must have the ability to raise funds in any situation, it helps to build
self-confidence in them to grab and achieve more in their business (Mukherjee, 2016). It is the
thumb rule of business that, if the businessman is not able to raise fund they can't manage the
business. They must have the ability to collect and generate money for managing business
activities.
Assertiveness and confidence
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Everybody knows that the listing process is very necessary to take effective decisions. Every
entrepreneur should have that ability to listen and make effectual wining opinions in the
conversation. All these opinion and ideas are necessary to build a tremendous reputation of the
entrepreneur in the business. The learning process is also considered in this ability which helps to
grab essential information about the business tactics (Al Mamun and Ekpe, 2016).
Risk taking ability
Risk taking ability is most important skills of entrepreneurs, they know that safe playing activity
is not the way of success, it is necessary to have to take some risks points and these are effectual
for achieving objectives. They have to promote their own innovative ideas and new views for
application in their procedure to achieving more (Al Mamun and Ekpe, 2016).
Decision- making the ability
Entrepreneurs should have logical and critical thinking ability to solve various problems in the
organization and take effective decisions against them. In today's world, every entrepreneur has
necessary to make effective decisions for welfare and development of their business and their
employee and they should not have to be regretted their decisions (Al Mamun and Ekpe, 2016).
Problem-solving skills
Entrepreneurs must have analytical skills which help to identify the issues and problems in the
business. They should have to be able to get analyzing issues in different ways and also provide
effectual cracking solutions to manage business or finance problems. Entrepreneurs should have
to use their skills and knowledge to resolve organizational problems (Mühlböck et al., 2018).
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