Entrepreneurship and Small Business Management Report

Desklib provides solved assignments and past papers to help students succeed.

Entrepreneurship and Small Business Management
1

Executive Summary
Entrepreneurship is the ability to develop and manage new business venture, which involves
financial risks. Different types of entrepreneurial ventures are conducted by entrepreneurs, with
different purposes and functions. The following report has elaborated this typology with suitable
examples. In addition, the role of these entrepreneurial ventures, most of which are small
businesses, in the national economy has also been discussed in the report. Entrepreneurship is
affected by several factors like the traits of his or her personality along with the culture from
which he or she descends and his or her beliefs. An entrepreneur must have leadership skills so
that he or she does not fear from taking risks and try to offer innovative services to people.
2

Table of Contents
LO1, LO2.........................................................................................................................................4
Introduction......................................................................................................................................4
Explain different types of entrepreneurial ventures and how they relate to the typology of
entrepreneurship..............................................................................................................................4
Explore the similarities and differences between entrepreneurial ventures....................................7
Interpret and assess relevant data and statistics to illustrate how micro and small businesses
impact on the economy....................................................................................................................8
Explain the importance of small businesses and business start-ups to the growth of social
economy.........................................................................................................................................11
Conclusion.....................................................................................................................................11
LO3, LO4.......................................................................................................................................13
Introduction....................................................................................................................................13
Determine the characteristic traits and skills of successful entrepreneurs that differentiate with
other business managers................................................................................................................13
Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation and
mind-set.........................................................................................................................................15
Examine, using relevant examples, how background and experience can hinder or foster
entrepreneurship............................................................................................................................16
Conclusion.....................................................................................................................................19
Reference List................................................................................................................................20
3

LO1, LO2
Introduction
Entrepreneurship is referred to the capacity and willingness to develop, organize and manage a
business venture, which includes financial risk, for the purpose of gaining wider profit. The most
obvious example of entrepreneurship is initiating new business, start-up businesses or SMEs.
Individuals, who undertake such initiative, are referred to the entrepreneurs. Entrepreneurs are
continuously contributing in the national and international economy. There are different types of
entrepreneurial ventures, undertaken by the entrepreneurs, which are shaping the industrial
trends (Burns, 2016). The entrepreneurship is having significant impact upon small business,
contributing in the economy. Entrepreneurship is also contributing significantly in local
employment. In the following report is being developed for the growing SME, Pacific
Computers Ltd, UK, with a key emphasis is upon understanding different types of
entrepreneurial ventures and typology of entrepreneurship. In order to understand the types and
importance of entrepreneurial ventures, the case of Starbucks coffee company would be explored
in the report. Further, the importance of small businesses and start up businesses in the growth of
social economy has also been demonstrated in the following report. Further, how the
characteristics or personality of entrepreneurs are influencing entrepreneurship, has also been
demonstrated here.
Explain different types of entrepreneurial ventures and how they relate to the typology of
entrepreneurship
There are different types of entrepreneurial ventures, based on the typology of entrepreneurship,
which is demonstrated below. Based on the size of the entrepreneurial ventures, the following
categorization is done.
Scalable Start-up entrepreneurship – These are mostly start-up businesses, which have
significant potential for innovation. These start-up businesses are referred to the innovation hub,
which are finding new market orientation, through modifying the existing activities in the
industries. Instead of their small size at the initial stage, these businesses have significant
4

potential to gain large profit within less time. Usually, these firms take enough risk to ensure
large profit within certain period, which helps them to sustain their scalable growth in market.
For example, an online fashion retailer, ASOS was founded in 2000, with huge potential it has
achieved £1.1 billion revenue/year (DeSantola and Gulati, 2017). Starbucks is also considered in
this category, through its scalable business idea, it has revolutionized the coffee business, while
handling approximately 50 million weekly transactions.
Small businesses – Small businesses are the ventures mostly run by families or single
entrepreneur, which emphasizes upon sustaining the business in the industry and shaping the
business, so that it can contribute to the owner’s investment. While the independent ownership is
focused upon gaining profits, the funding is usually gained from bank loans or angel ventures. In
UK, approximately 70% of the private sector is contributed by small businesses.
Large organizations – These entrepreneurship ventures has witnessed strong growth and market
share, which has expanded the size of the business continuously, based on the environmental
influences. These ventures are continuously attempting meet the market needs, meeting the
consumers’ demands, while devising strategies to earn profit. Although the number of large
organizations is less compared to the small ones in the industry, these are contributing
significantly in national GDP growth (Drucker, 2014). For instance, Apple Inc. is such a large
organization contributing highly in nation’s economy.
Based on the function or purpose of the entrepreneurial ventures, the categorization has been
done below.
Global entrepreneurship – Through innovation, these types of entrepreneurial ventures has
reached the global platform. The global entrepreneurship indicates the potential of the
entrepreneurial ventures to lead the global market through its growth potential and innovative
approach. Mark Zuckerberg is said to be such a global entrepreneur, whose entrepreneurial
venture, i.e. the social media platform “’Facebook” has become the most known global
communication platform. It has been revealed that with its wider popularity, the venture is
contributing approximately 6 million USD to the national economy, while creating a large
amount of local and global employment. Similarly, Starbucks is another key example of global
entrepreneurship (Fouzdar and Sachdev, 2017). Howard Schultz, the CEO of Starbucks, like
5

Mark Zuckerberg, has also achieved global reach, by his revolutionary contribution in the global
coffee industry. The organization has engaged more than 160000 employees in approximately
17000 stores, operating in approximately 49 countries throughout the world.
Social entrepreneurship – Social entrepreneurship is a type of entrepreneurship, which is
working for supporting the social needs or resolving a social issue. It ensures that the
entrepreneurs and their ventures are growing fund, not for their own profit, but for the social
wellbeing. For instance, Bill Drayton is a social entrepreneur, who reshaped the term “social
entrepreneurship”, while establishing the charitable organization “Ashoka: Inovators for public”.
This venture is empowering social entrepreneurs through the world (Ribeiro-Soriano, 2017).
Public sector entrepreneurship – These types of entrepreneurial ventures exist in public sector,
resulting in innovative activities, like development of new and existing services or strategies and
risk taking procedures. These are serving for mitigating local unemployment issue.
Lifestyle venture – This type of business is run by the founders, with the purpose of sustaining a
significant level of income or to offer a foundation from which a particular lifestyle could be
enjoyed. The most common lifestyle venture is online stores, i.e. Amazon, which has grabbed
wider pool of tech-savvy customers, by considering their lifestyle choice (Sauka and Schneider,
2016).
Aggressive growth venture – An aggressive growth venture has the purpose of representing huge
growth and expansion rate in the industry, to achieve and maintain the leading position in the
market, which is often done by embracing technology advancement and change management.
Survival venture – Several micro-organizations are attempting to emphasize upon strategies and
practices, which are helping them to survive in the competitive market. These ventures are
running less financial transaction, with no or minimal growth potential.
Managed growth venture – Such entrepreneurial ventures are attempting to manage a consistent
market growth, with the use of effective business model. In order to develop and manage
continuous and steady growth, these ventures are often introducing new products or innovation
promotions, which are helping to maintain brand image (Scarborough, 2016).
6

Explore the similarities and differences between entrepreneurial ventures
There are several similarities and differences among the types of entrepreneurial ventures,
discussed above. Considering some key aspects, the similarities and differences between these
ventures are discussed below.
Similarities
 One major similarity of all the ventures is that these ventures start with innovative vision
 In addition, small to large, all entrepreneurial ventures are contributing in local
employment
 The small, large and medium size entrepreneurs are contributing in the local as well as
national economy growth
 The social entrepreneurial ventures are ensuring social welfare by mitigating social
issues; similarly, private entrepreneurial ventures are helping to reduce local
unemployment, thereby contributing in social welfare; on the other hand, public ventures
are serving for ensuring that the quality of services are improved, to meet public’s needs,
thereby contributing in social welfare too (Duening and Metzger, 2017)
Differences
Small scale / start up
businesses
Large / global
entrepreneurship
Social
entrepreneurship
Public sector
entrepreneurship
Key objective is to
sustain the business
and bring innovation
in the industry
Key objective is to
gain leading position
in market, through
taking risk, increasing
profit and market
share
Key objective is to
work for society and
eliminate social issues
by raising fund
through the
entrepreneurial
venture
Key objective is to
earn profit while
contributing to the
community
development and
improved living
standard of people
The key function is to
run the business at
small level,
supporting the
The key function is to
identify the growth
opportunities as well
as threats, devise
The key function is to
identify the social
issues and remedy for
the issue, based on
The key role is to
work for public and
meet their needs,
through enhancing the
7

survival of the
business, while
contributing in local
employment and
innovation
strategies, meet
market needs,
employment and earn
profit (Kazanjian et
al., 2017)
which fund is raised
to resolve it for social
wellbeing
quality of service
offered to public
Usually get peer to
peer lending, family
funding or crowd
funding for financial
resources
Gets bank loans,
overdraft, investors or
shareholders and other
financial institutes for
financial resources
Funds are raised by
the volunteers or
public (Morris et al.,
2018)
These ventures are
supported with
government funding
Although these
organizations are the
ideal house for
innovation, but due to
scarcity of resources,
often cannot
maximize
Innovation is
considered as the key
to success for these
organization
Innovation and
technology
advancement are
continuously
embraced for
improving social
conditions and
ensuring social
welfare (Franco et al.,
2018)
The level of
innovation is
comparatively low in
the public projects,
compared to the
private ones
Interpret and assess relevant data and statistics to illustrate how micro and small
businesses impact on the economy
The micro and small businesses are contributing highly in the local, regional and national
economy of a country like UK. According to the recent statistics, 5.6 million small businesses
are in the UK. It has been revealed from several reports that in UK, approximately 99.3% of the
total private sector businesses are filled with small businesses and 99.9% are SMEs, which
include micro businesses also. Further, in every key business sectors in UK, 99.5% bysinesses
are covered by SMEs (fsb.org.uk, 2018). These are having a high contribution in the overall
GDP growth of the UK. It is also noteworthy from the reports on SMEs that the number of small
8

and scalable start-up businesses is increasing in UK industries, which are having high potential
for earning profit. With the increased number of small and medium size businesses, the
frequency of employment opportunities is also increasing in the local and regional areas.
Usually, the small and micro businesses have less than capacity of 250 employees; however, as
the number of total SMEs number is increasing, the capacity of employing the unemployed
workforce is also increasing. From the recent statistics, it has been estimated that approximately
16.3 million people are employed in different sectors of UK’s local, regional and national level
industries, which has been estimated as 60% of all employment in the UK’s private sector.
Further, in terms of annual turnover, it has been estimated that the annual turnover of SMEs was
£2.0 trillion, which is 52% of the turnover from all the private sector (Wright et al., 2015).
Figure: SME value added UK economy
(Source: fsb.org.uk, 2018)
Further, recent statistical findings by Hampshire Trust Bank (HTB) identified that in the top 10
cities of UK; the small and micro businesses are forecasted to contribute £241 billion to the
nation’s economy by 2015. It is indicating 19% increase from the contribution of SMEs in UK’s
economy in 2016 (fsb.org.uk, 2018). In this regards, the contribution of London’s business
industry is inevitable in UK’s economy growth. It has the largest number of SMEs, with the
9

highest contribution in the UK’s economy. The SMEs in London have contributed approximately
£152 billion to the UK economy’s gross value added figure (GVA) in 2016. It is also forecasted
that this amount is projected to show a rise by 19% in 2025, reaching £181 billon. The growth of
London’s SMEs has been identified to contribute in 27% growth of UK’s economy in 2018.
Whereas, the 60% employment of UK is contributed by SMEs, 40% are contributed by the large
firms. However, compared to the large firms, which are only 0.1% of the total UK industry have
created 53% turnover rate, the SMEs contributed 19% turnover rates. The SMEs have been
projected to grow by further 20% by 2020, with the inclusion of 5 million more micro businesses
in UK industry (Hulbert et al., 2015).
Figure: Top 10 UK cities by SME contribution to the UK economy
(Source: Hulbert et al.,2015)
10

Explain the importance of small businesses and business start-ups to the growth of social
economy
The small businesses and start-up businesses are highly important for the growth of social
economy. One of the most crucial aspects indicating the importance of small business and start
up businesses in the social economy growth is by their contribution in creating local employment
and contribution in community development. The rising number of small businesses is increasing
the scope or opportunities for the employees, who have less skills or eligibilities to be employed
by the large firms, to get an employment. In current economic and political environment in UK,
Brexit is a significant consideration, which has shaped the industrial and social aspects also.
After Brexit, a significant downturn in the business economy of UK market has been noted.
Thus, the UK government should help in increasing new businesses to revive the nation’s
economy, along with social development. In this regards, these small and start-up businesses are
playing the vital role. These are creating local employment as well as earning profits, which are
helping the nation to revive its economic situation after Brexit (Do and Smallbone, 2017).
In addition, it is also noteworthy that these small and start-up businesses are the sole source of
innovations and technology advancement, some of which are revolutionary often, which are
modifying the industrial ways to run the business. Considering the industrial trends or customer
preferences, the visionary entrepreneurs are often promoting the living standards of the
population as well as contributing in the community and regional development. Offering a range
of innovative options to the consumers, these organizations are influencing consumer’s buying
behaviour also (Kirzner, 2015). Additionally, by contributing to the reduction of unemployment,
the growth of small businesses and start up businesses are also contributing in reduction of social
issues like poverty and improving social economy.
Conclusion
In the above report, the key emphasis was upon understanding the key concept of
entrepreneurship and its role in business. In this regards, with the help of different examples, like
Starbucks coffee company, a range of entrepreneurial ventures have been discussed in this
report. Further, from the report, the key similarities and differences among these entrepreneurial
ventures have also been identified and discussed. In this regards, it has been understood that the
11

entrepreneurial ventures are dissimilar in several aspects, but all of these ventures are attempting
to represent something new or innovative through the business venture, in order to start or
improve the business. Further, the report also helped to understand the significant economic and
social contribution of the SMEs and entrepreneurial ventures.
12