Impact of Micro and Small Businesses on the UK Economy: An Analysis

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ENTREPRENEURSHIP AND
SMALL BUSINESS
MANAGEMENT

TABLE OF CONTENTS
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................2
LO1 & LO2......................................................................................................................................3
P1 Examine different types of entrepreneurial venture and explain how they relate to the
typology of entrepreneurship.......................................................................................................3
P2 Explore the similarities and differences between entrepreneurial ventures...........................5
P3 Interpret and assess relevant data and statistics to illustrate how micro and small businesses
impact on the economy................................................................................................................7
P4 Explain the importance of small businesses and business start-ups to the growth of the
social economy..........................................................................................................................10
LO3 & LO4....................................................................................................................................12
P5 Determine the characteristic traits and skills of successful entrepreneurs that differentiate
them from other business managers..........................................................................................12
P6 Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation
and mindset................................................................................................................................16
P7 Examine using relevant examples, how background and experience can hinder or foster
entrepreneurship........................................................................................................................19
Conclusion.....................................................................................................................................22
References......................................................................................................................................23

LIST OF FIGURES
Figure 1: SME's growth in employment..........................................................................................7
Figure 2: City with highest number of SME...................................................................................8

LIST OF TABLES
Table 1: Distinction within entrepreneurial ventures......................................................................5

Executive Summary
Businesses now-a-days requires huge knowledge and understanding of market as compared to
earlier times due to tough market competition. There are numerous firm follows specific motive
and approach to start over new businesses that are determined as entrepreneurship. The person at
initial stage has few resources and funds to set business by taking risks are entrepreneurs. With
the rapid speed in changing technologies and consumer preferences business setup requires huge
dedication and ability with entrepreneur to perform successfully in market. The growth of small
firms is limited, but skills and traits of person by understanding market makes easier for owners
to manage business within competitive market. The report has discussed example of Starbucks
that bought concept for starting retail coffee shop 1984 (Scarborough, 2016). It was started at
that time when nobody was interested in such business and people engaged in such firms were
having limited growth. In case of Starbucks, CEO has aimed on revolutionising coffee industry
by establishing 13000 store of coffee. In year 2008, it employed 160000 people within 17000
stores across 49 countries.
Thus, the study will determine entrepreneurship significance and its activities in small firms that
will help in growing by starting various types of business and firms. The businesses with new
ideas and small size grow efficiently if carries differentiated services and products or innovation
and invention that attract people. So the report has discussed about small businesses that plays
major role in our day to day lives (Burns and Dewhurst, 2016).
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Introduction
Small businesses have taken huge growth in current market place that has made stiff competition
for earning higher revenues and profits. The current study will describe different entrepreneurial
ventures and its typologies from an intern of CafePod Coffee Co and further explore differences
and similarities within entrepreneurial ventures. It will assess important data and statistics for
determining impact on country’s economy from small and micro firms. The study will mention
significance of start-ups and small businesses that helps in growing social economy. Moreover, it
will discuss skills, traits and characteristic of successful entrepreneurs for differentiating by other
manager. It will express how entrepreneurial personality reflects mindset and motivation. At last,
the study will discuss entrepreneur’s experience and background that impacts practises of small
businesses.
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LO1 & LO2
P1 Examine different types of entrepreneurial venture and explain how they relate to the
typology of entrepreneurship
The term entrepreneurship is determined as process of running, designing and launching of new
firm which is at its initial stage called as small business. It contains capacity and willingness for
developing, organising and managing certain firm to gain profits by taking risks. Such ways of
firms are created by entrepreneurs with limited resources and funds. There are various qualities
in entrepreneurs that consist of creativity, conviction, zeal and insight. The UK has differentiated
small sized firms that deal in variety of sectors. For instance, CafePod Coffee Co is type of small
business that is growing slowly in economy of UK. It is known as independent coffee firm that is
located in South London that holds motive of making strong, and exciting coffee to the people
that like adventure drinks (Birley and Stockley, 2017). It combines and uses originality dose and
serous roasting expertise that provides great quality to customers.
It was founded in 2011, by 2 friends from South Africa named as Brent Hadfield as well as Peter
Grainger that is created with innovation and quality excitement. It is stating on seventh position
and wants to mention on first position in UK for top retail brand of coffee. The two founders of
the firm were identified as entrepreneur that has created new innovation that has attracted global
customers. Entrepreneur are defined as people that takes risk to own and operate business with
aim on receiving revenues and rewards by vision of developing new techniques, products, steps
and opportunities with realistic activities.
Entrepreneurship Typologies
The term entrepreneurship is expressed differently by different authors that have created variety
of typologies within small businesses (Jin, et.al, 2017). As an intern, the various typologies by
different authors include craftsman and opportunist by Smith, independent and administrative by
Collins and Moore, small business owner manager by Carland, Hoy and operators and visionary
by Filion etc. According to different firms and operations there are various types of
entrepreneurial firms and ventures that are listed below:
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Corporate Entrepreneurship – In this, the person has ability to handle large firms by owning
shares and employees in professional way. It is determined as public or global listed firm.
Social Entrepreneurship – The person and manager under this type of entrepreneurship has aim
to transform stable mindset into realistic activities and operations.
Private Entrepreneurship – Such types of firms are independent in which business owner aims
on managing all operations that has motive to include in profitable functions.
Serial Entrepreneurship – In this, the person regularly starts fresh venture or enterprise with
motive of disposing new firm at later stage.
Lifestyle Entrepreneurship – The aim of such venture is to establish and manage business entity
using passionate approach for gaining certain lifestyle and after gaining profits and revenues. It
gives huge development to sector or country (Fouzdar and Sachdev, 2017).
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P2 Explore the similarities and differences between entrepreneurial ventures
The CafePod Coffee Co was started to provide drinks to such people that has adventure kind of
attitude in trying new things that has helped in gaining higher market and customer value. Being
an intern in firm, it was found that innovation and experience has given success to idea of firm.
In modern era of businesses there are various types of firms that are distinguished based on size,
scope, features, objectives and development that have impacted on business in effective way?
(Day and Mody, 2017) Thus, following are differences as well as similarities related to
entrepreneurial ventures that are listed below:
Table 1: Distinction within entrepreneurial ventures
Entrepreneurial
Ventures and its
Significance
Aims and Objectives Goals for Growth and
Development
Examples
Macro
Entrepreneurship – The
firms are created and
planned by founders
that carries motive of
improving or changing
any industry by gaining
huge revenues and
shares with dream of
achieving leader’s role.
The activity of firm is lead
by owner by depicting firm’s
strong and weak points to
team and employees. The
aim of such firms includes
operational strategies and
plans for completing targets
and gaining success in
competitive market.
The development and growth
aspects of firm are highly
dependent on higher market
shares, segments as well as
reputation.
The example
of Richard
Branson for
starting own
firm to capture
market.
Micro
Entrepreneurship – The
firms in this category
manages over small
level with low funds
including approx 10
members that help in
obtaining 100000
pounds as profits.
The firms work on single
product line and aims on
developing team knowledge
and efficiency. The
operations and role tasks are
major priority in such type of
firms by entrepreneurs.
It has growth plans for
earning higher revenues and
profits and do not matter how
tough the competition is
(Welsch, 2017).
Shebeen and
Spaza shops.
5

Social
Entrepreneurship – The
firm is highly indulged
in such type of business
or practise that provides
security and safety to
society with full
satisfaction. It consists
of society, people and
betterment progress by
using variety of steps.
The aim of such firms is to
provide improvement and
changes in three sections
such as community,
environment and humans
that helps in gaining huge
growth and success.
The goods and products in
such firms are developed
with a manner that is gives
establishment method to
influence or improve
ongoing situation of
environment, people’s living
standards and society
upbringing. The benefit
given to people and society
helps in gaining success,
growth and revenues (Julien,
2018).
In 1988,
Hollender
developed
firm of
seventh
generation that
was started for
cleaning paper
and personal
care products.
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P3 Interpret and assess relevant data and statistics to illustrate how micro and small businesses
impact on the economy
The small business and start ups now-a-days has taken over the market as trend for small firms in
UK has been grown at immense speed. The CafePod Coffee Co was also started business at tiny
level and now it has expanded over country by serving different taste and quality in coffee for
the regular and interested drinkers that do not hesitate while changing and trying new taste given
from various firms. The UK containing stable economy is growing because of small and micro
firms that has adopted huge market space with quality and attractive innovation and creativity
that has helped in achieving business results.
According to surveys and statistics, it was found that UK has 5.7 million businesses out of which
99.9% are listed as small and medium sized firms that are determined as SME’s (Burns, 2016).
Therefore, role of SME’s in UK has higher importance as it is increasing stability and economy
every year. The data for employees on types of UK businesses are listed below:
Figure 1: SME's growth in employment
(Source: Business Statistics, 2019)
 The SME’s businesses in UK are 99.9% with limit of 249 employees in firm.
 The medium size firm are carrying ratio of 0.6% with 50 to 249 employees.
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 The small businesses are less than 4% with 10 to 49 employees.
 The micro businesses are more than 95% with approximately of 9 employees.
Based on above data, it can be seen that people in UK are not highly working under some firms
or people as organizations are hiring limited number of employees because current generation in
country is showing back to jobs with 9 to 5 by aiming to set up or opening their own firms and
businesses. The small business set ups are now in UK starting with plumbers, entrepreneurs,
freelancers and small ecommerce stores. Based on survey, 82% of people fall under category of
non-employees group (McKenzie and Woodruff, 2015).
Surprisingly, London has highest number of ratio in SME’s that is identified by comparing firm
number per 10000 adults. It was found that 1563 businesses are present for each 10000 people
that are much higher from national average. In UK, the ratio is 1509 over 10000 adults. Thus, it
is clearly specified that SME’s are ruling over UK with highest ratios in firms and people that is
beneficial for country’s growth and strong economy. Further, 74% firms are falls under service
industry category and 18% in construction businesses. In year 2016, it was found that £1.9
trillion was annual turnover of SME’s. Thus, the firms that got successful in maintaining their
employees have boosted annual profit margins within 2016.
Figure 2: City with highest number of SME
(Source: Catharine Paddoc, 2016)
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