Entrepreneurship and Small Business Management Report

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Entrepreneurship and Small Business
Management
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Contents
Introduction......................................................................................................................................3
Lo1...................................................................................................................................................3
Different type of entrepreneurial ventures and how they related to the typology of
entrepreneurship..........................................................................................................................3
L02...................................................................................................................................................7
Impact of micro and small business on the economy..................................................................7
Lo3.................................................................................................................................................11
Determination of traits and skills of a successful entrepreneur that differentiate them from
other business managers............................................................................................................11
LO4................................................................................................................................................14
Examination, using relevant examples, how background and experience can hinder or foster
entrepreneurship........................................................................................................................14
Conclusion.....................................................................................................................................16
References......................................................................................................................................16
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Introduction
There are different types of entrepreneurial ventures in the UK that includes small, medium,
large and other social ventures. The development and growth of these ventures are very fast due
to availability of skilled entrepreneurs. These ventures have a great impact on the national
culture and economy and are playing an important role in the world's economy (Kirzner, 2015).
This report is going to include different type of entrepreneurial venture their growth and
development, how they relate to the typology of entrepreneurship and the similarities and
differences between these ventures and also the impact of the small business has on the local,
national and global economy.
This report will also describe the traits and skills are required in entrepreneurship and small
business management by exploring the skills and mindset required by an entrepreneur for a
successful entrepreneurial venture and how their personal background and experience influence
them in their entrepreneurship. People will also understand how businesses are started and grow
in the market.
Lo1
Different type of entrepreneurial ventures and how they related to the typology of
entrepreneurship
Entrepreneurship
It can be defined as doing an act of entrepreneur, in which a person puts his financial resources,
innovation and efforts to start a business with the aim of generating profit and that person is
called entrepreneur who takes responsibility of all the business functions (Drucker, 2014)
Entrepreneurial ventures
This includes those ventures which are organized, developed and managed by a person who has
willingness and capability to start a business and use own plan and limited resources for
operating start-up venture. That person takes responsibilities of all the risks and rewards
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achieved by a venture with the idea of providing new product and services in the market
(Drucker, 2014).
Types of Entrepreneurial Ventures
There are four types of Entrepreneurial ventures described as follows:
Small business entrepreneurship
They are the one who owns and run their business at small scale using the limited resources to
earn some profit in the market the aim of these businesses to feed their family and satisfy their
personal needs, they provide the fund to their business with the help of friends and family or
business loans. Some of the examples are: hairdressers, grocery stores, travel agents, consultants,
carpenters, electricians etc. the growth and development of these ventures depending upon the
availability of the resources (Scarborough, 2016)
Scalable startup entrepreneurship
These entrepreneurs start a business with aiming to change the world and they attract big
investors to invest in their ventures like venture capitalists and they always search for a scalable
and repeatable business model and when they find it, their attention towards scale requires more
venture capital to fuel rapid growth of the business (Mason and Harrison, 2017). Some of the
scalable start-ups in innovation clusters are New York, Bangalore, Silicon Valley, Israel,
Shanghai.
Large company entrepreneurship
Large entrepreneurial venture operate and manage their venture at large scale and serve a large
market through sustaining innovation and offering new product among the marketplace. Changes
in technology or government rules create pressure on this companies for more disruptive
innovation and require a large company to offer a new product. The existing company do this by
acquiring a new venture or create off-base innovation in their organisation. These companies are
large in size and culture. These ventures are developing and growing very fast with a huge scope
in the market (Storey, 2016).
Social entrepreneurship
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The goal of social entrepreneurs to make the world a better place, they create those products and
services which help in solving a social problem and satisfying social needs with great innovation.
These ventures can be non-profit or profit or hybrid. These ventures are growing very fast. For
example NGO'S and other public utility sectors of government. The main aim of these ventures
is to provide social services and maintaining the welfare of society as a whole (Dees, 2017).
Typology of entrepreneurship
Typology can be defined as the classification of entrepreneurship on the basis of nature and size
of the employees in a particular venture. These ventures apply typology in terms of their
organisational structure, nature and size.
The typology of entrepreneurship classifies entrepreneurship in two types
Corporate entrepreneurship- this is undertaken within the structure and context of an existing
organisation. And there are many entrepreneurs works in it and usually large scale ventures and
scalable ventures adopt this typology(Meyers and Pruthi, 2011).
Independent entrepreneurship
When an existing business run by an individual or team of individuals uses this kind of typology
this can be seen at small scale venture and social venture (Meyers and Pruthi, 2011).
Differences between entrepreneurial ventures
Area of
differences
Small business
entrepreneurshi
p
Scalable startup
entrepreneurshi
p
Large company
entrepreneurshi
p
Social
entrepreneurshi
p
meaning Small businesses
are operated and
managed by
single
entrepreneurs
with the aim of
making a profit to
Scalable start-up
are managed by
individual or
teams of
individuals with
the aim of
expanding a
These ventures
are managed by a
number of
shareholders and
operated at a
large level
These ventures
sale only those
product and
services which
satisfy social
needs and welfare
of the society
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fulfil their daily
needs
business model so
that it could be
scalable and
repeatable
Scale level These include
small scale level
to perform
business activities
These include a
scalable platform
to operate their
business
Large scale level
used by them to
provide their
services
Large or medium
scale level used
by them
Number of
entrepreneur
s
These ventures
include one or
two entrepreneurs
These include a
number of
entrepreneurs
with some
venture capitalist
A large number
of shareholders
2 or more than
that depends upon
a venture's size
investors An entrepreneur
himself is
responsible to
invest in his
business
Venture capitalist
are attracted to
invest in ventures
Investment is
done by a large
number of
shareholders
Investment is
done by the
government or
public
aim The aim of small
business owners
is to generate
profit to feed their
family
Their aim to
create wealth and
gain market share
for the venture
The aim of the
company to
change the world
as per the
requirement of
time
The aim of these
venture to solve
problems of
society and
satisfy their social
needs (Catalina,
2013)
Growth and
development
There are fewer
chances of
development at
small scale
These ventures
collect market
share and are
growing very fast
The growth and
development of
these ventures is
very fast because
they are managed
and operated at a
These ventures
are also growing
rapidly to
maintain the
welfare of the
public.
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large scale
examples Hairdressers,
carpenters,
grocery shops etc.
Scalable start-ups
in Silicon Valley,
Bangalore
quantum and
photonics
technologies(UK)
NGO’s, public
utilities or any
social group etc.
Similarities between entrepreneurship ventures
The differences between these ventures are described but there are some similarities also can be
seen between these ventures like they all are running a business activity to sell product and
services in the market. Large companies and the scalable startup aim at profit-making as well as
gaining market share the small scale ventures and social entrepreneurship focuses on the welfare
of society by providing their service to fulfil their needs. The main aim of the large, small and
scalable startup is to earn the profit. And all these ventures are expanding their business with
great innovation.one of similarity between these ventures is that they are owned by an
entrepreneur or a team of entrepreneurs and they put their ideas and efforts to achieve their
business goals
L02
Impact of micro and small business on the economy
Impact on the national economy
Small businesses are playing a significant role in the growth of the economy. They are the
backbone of the UK economy. They create the job, opening new marketing, driving growth and
therefore their contribution is high and plays a vital role (Burns,et.al, 2016). The small business
represents 99.3 business at the start of 2016, and 99.9% were small or medium ventures in UK
plc.as per a report established in 2015, most of the jobs that are available in developing market
created by the small businesses and accountable for employing over 60% of all private sector.at
any given point of time, the scale ventures created 33 % of the national income. There were 5.6
small businesses at the start of 2018 (Burns, 2016). The combined annual turnover of small
business was £2.0 trillion in which 52% was all private sector turnovers. In the year 2018, there
were 1.4 million employing business and 4.3 million non-employing business small businesses is
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accountable for 99.5% of the business in every main industry sector. Thus small businesses play
a crucial role in the success of the national economy by providing employment opportunity and
economic development
Impact on the global economy
Small business and start-ups are playing an important role in the global economy. There are 25-
27 million small business in the U.S that is accountable for 60% to 80% of all jobs in the U.S. as
per the report of 2015 approximately 600 million jobs would be required over the 15 years across
the world, most of the job created by small business in developing markets it has created 45%
employment in developing countries and that is how small businesses are given considerable
importance in the world economy (Carree and Thurik, 2010). Supporting growth and
development of small businesses is essential for innovation and progress in all over the world.
Small businesses also achieve economic growth corporate empires like Wal-Mart, ben & jerry's
all began as a small business but now growing in the international market. The medium and large
businesses are also greatly accountable for providing job opportunities, national income and
economic development at the global level (Stokes and Wilson, 2010).
Impact on the local economy
Small business accounts for between 60-80% of all U.S jobs since the year 1995 and they are
also responsible for paying out 44% of the total U.S private payroll. Small businesses are the
engine for growth and the citizens and government to acquire the services they need to grow.
Small business contributes to the local economy by bringing the innovation and development to
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the community. Small business helps in providing employment opportunities to those who are
not able to get employment in large companies and attracts that talent who are capable to create
innovation. Many large organisations also depending upon small business to complete their day
to day business activities small business possesses their ability to adapt to changing economic
climates. Small businesses are also responsible for giving money back to their community. If a
small business generating higher revenue it will be able to pay a higher tax to the government
including local property tax. The sale tax collection by the small business also impact the local
economy (Szirmai,ett.al, 2011).
Hence small businesses have a great impact on local, national as well as the global economy.
They facilitate employment opportunity, innovation through new ideas and economic
development of the world. Today small businesses are growing very fast and many banks
providing loans facilities to the small business owners to expand their business. Government is
also providing tax deduction facilities according to the tax cut and job act 2017 the government
has given 20% deduction on qualified income (Taiwo,et.al, 2012). There is a reciprocal
relationship between small business and economy Development of economy helps in the creation
of more small business and small businesses are beneficial in economic development. There
might be some negative impact of small businesses on the economy like a number of small
businesses die before surviving the 5 years into the market and this results in unemployment
again. Sometimes small business owners cannot afford the amount of capital needed in
expanding their business and it becomes a barrier in their business development. Small
businesses also face taxation issue if the government does not pay attention to fair tax policies.
Thus, Small businesses have both advantages and disadvantages (Kelley,et.al, 2012).
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10

Lo3
Determination of traits and skills of a successful entrepreneur that differentiate
them from other business managers
There is not a particular set of skills and traits for an ideal entrepreneur personality who is
successful. But an entrepreneur must have those skills which differentiate him from other
business managers. An entrepreneur must be innovative, sociable as well as analytical. However,
there are some common traits and skills which is essential for a successful entrepreneur (Ahmad,
2010)
Passion
An entrepreneur should be passionate about his work. A successful entrepreneur loves what he
does and puts his all efforts and time to flourish and expand his business. It is a pleasure for him
to see the results of his efforts and he does not focus on money received (Antončič, 2010).
Self-discipline
This trait should be possessed by an entrepreneur to become successful he should be flexible to
do all work whether he feels like it or not. Self-discipline includes self-control, self-
responsibility, self-direction, and self-mastery. Successful entrepreneurs even do those things
they don’t like to do(Antončič, 2010).
Integrity
The most valued and respected quality an entrepreneur must have absolute integrity. He should
remain honest in all business activity. All successful business is based on trust and successful
entrepreneurs possess the trait of integrity build to an environment of trust and honesty.
A clear sense of direction
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An entrepreneur is required to set a clear set of goals and he should also give direction to the
people working with him and this will lead him towards great success. a successful entrepreneur
always follows a path and uses a clear sense of vision.
Risk taker
An entrepreneur must be capable to take the risk in his business. If he won't be able to take the
risk he cannot achieve success. All successful entrepreneurs take the market risks and try to find
out the opportunities among those risks. They take it as a challenge, not as risk
Motivation
An entrepreneur must have enough motivation to do hard work and achieve business goals. A
successful entrepreneur stays highly motivated in all the business situations and also takes
responsibility for motivating other workers.
Decisive and action oriented
Entrepreneurs must have the ability to think and take a fast and accurate decision. And they
should take action and carry out the decision they took. Successful entrepreneurs are deceived
and they always do more than what others do. they believe in quick action taking and they do not
wait for an opportunity they create it.
Competitive spirit
Successful Entrepreneurs are always keeping themselves ready to take challenges and to win.
They must possess their capability to take challenges and win over the competitors. They do not
get stress from a challenge instead of this they take it as an opportunity to grow their business
High level of confidence
An entrepreneur must have a higher level of confidence to complete the work even in stressful
situations. He should understand that big challenges breed big rewards. A successful
entrepreneur takes the challenge as an opportunity
Determination
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