Entrepreneurship & Small Business Management: UK Economy Impact

This report provides an analysis and evaluation of entrepreneurship and small business management. It begins by explaining four major types of entrepreneurial ventures (Survival, Lifestyle, Managed Growth, and Aggressive Growth) according to entrepreneurship typology, highlighting the differences between them. The report then assesses the impact of small businesses on the UK economy using relevant data and statistics. It further explores the mindset, characteristics, and skills required for a successful entrepreneur, and examines the environmental and other factors that foster or hinder entrepreneurship. The report concludes by summarizing key findings and reinforcing the importance of understanding these aspects for effective entrepreneurship and small business management.

Running head: ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Entrepreneurship and Small Business Management
Name of the Student
Name of the University
Author’s Note

1ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Executive Summary
The main aim of the report is the analysis as well as evaluation of different aspects of
Entrepreneurship and the management of Small Businesses. The first part of the report involves
in the explanation of four major kinds of entrepreneurial ventures along with their explanation as
per the entrepreneurship typology. The later part of this section draws the present differences
among these four types of entrepreneurial ventures. After that, the report involves in the
assessment of the impact of the small businesses on the economy of United Kingdom with the
help of the analysis of relevant data and statistics. The next part of the report takes into
consideration the analysis of the required mindset, characteristics and skill sets of a successful
entrepreneur. The last part of the report assesses the effects of different environmental and other
factors in fostering or hindering entrepreneurship.

2ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
1. Entrepreneurial Ventures.............................................................................................................4
Different Types of Entrepreneurial Ventures and Their Relation to Typology...........................5
Similarities and Differences between Entrepreneurial Ventures...............................................10
2. Assessment of the Impact of Small Businesses on the Economy..............................................12
Interpretation of How Micro and Small Businesses Impact on the Economy...........................13
Importance of Small Businesses and Business Start-ups to the Growth of Social Economy....16
3. Determination and Assessment of the Key Aspects of an Entrepreneurial Mindset.................18
Determination of the Characteristics, Skills and Traits of Successful Entrepreneurs...............18
Assessment of How Personality Reflects Entrepreneurial Motivation and Mindset.................21
4. Examination of Different Environment to Foster or Hinder Entrepreneurship.........................23
Examination of How Background and Experience can Hinder or Foster Entrepreneurship.....23
Conclusion.....................................................................................................................................25
References......................................................................................................................................27

3ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Introduction
In today’s evolving business world, Entrepreneurship is considered as one of the major
aspects as entrepreneurship can be considered as the process to design, launch and run new
businesses; and the people who create these new businesses are called the Entrepreneurs1. In the
simple words, entrepreneurship is the act to create businesses with the aim to generate profit. On
the more specific basis, the meaning of entrepreneurship involves an entrepreneur taking some
specific actions with the aim to change the world. In the process of entrepreneurship, the
entrepreneurs take a specific idea with the aim to execute it in order to give it the form of a
business2. For this reason, entrepreneurship is considered as all about the execution of the ideas.
Hence, according to the definition of entrepreneurship, it is the ability and willingness for
developing, organizing and managing a business venture along with the risks involved so that
profit can be made. In this context, it needs to be mentioned that the entrepreneurs start their new
businesses in the form of small businesses3. For this reason, the entrepreneurs are needed to take
into account all the aspects of managing their small businesses. Management of small business
demand the alignment as well as coordination of multiple activities and for this reason, it is
needed for the entrepreneurs to obtain the required management skills for the accomplishment of
the goals and objectives of the small businesses4.
1 Burns, Paul. Entrepreneurship and small business. Palgrave Macmillan Limited, 2016.
2 Drucker, Peter. Innovation and entrepreneurship. Routledge, 2014.
3 Kirzner, Israel M. Competition and entrepreneurship. University of Chicago press, 2015.
4 Schaper, Michael T., et al. Entrepreneurship and small business. 2014.

4ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
It needs to be mentioned that there are different types of small businesses and they are
considered as the entrepreneurial ventures. The presence of small businesses has major impact on
the economy of the countries as they help in improving the economic condition in different ways.
In the presence of all these aspects, the governments of the countries are taking major initiative
for the improvements of the small businesses5. The main aim of this report is the analysis and
evaluation of different aspects of the entrepreneurship and small business management. Different
parts of the report focus on different aspects of entrepreneurship like range of entrepreneurial
ventures and difference among them; analysis of the impact of the presence of small businesses
on the economy of the countries; analysis of the required aspects for entrepreneurship mindset
and analysis of different environmental factors for fostering and hindering the aspects of
entrepreneurship.
1. Entrepreneurial Ventures
It can be seen from the above discussion that an entrepreneur is a person involves in
starting and running the new businesses in the presence of limited resources and with the help of
effective planning; and this new business is regarded as entrepreneurial venture. It needs to be
mentioned that there is the presence of some specific types of entrepreneurial ventures can be
seen; and they are Survival Ventures, Lifestyle Ventures, Managed Growth Ventures and
Aggressive Growth Ventures6. The following discussion shows the analysis and examination of
these four types of entrepreneurial ventures.
5 Storey, David J. Entrepreneurship and new firm. Routledge, 2016.
6 Brooks, Alison Wood, et al. "Investors prefer entrepreneurial ventures pitched by attractive
men." Proceedings of the National Academy of Sciences 111.12 (2014): 4427-4431.

5ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Different Types of Entrepreneurial Ventures and Their Relation to Typology
Survival Ventures: The main objective of this type of entrepreneurial venture is to ensure the
survival as well as meeting the financial obligations of the entrepreneurs. The engagement of
many start-up businesses can be seen with the survival ventures with the long-term aim to stay in
the business for making profits. There is not any hardcore obligation on the survival ventures to
get registered, and they do not have any business premise with few assets for conducing the
business operations7. There is not any scope for the process of re-investing in this kind of
entrepreneurial ventures due to the fact that they exist for ensuring the survival of the
entrepreneurs. The presence of push factors can be seen behind the establishment of this type of
ventures; and these businesses operate in highly competitive, price-based and undifferentiated
markets. It needs to be mentioned that there are certain characteristics of survival ventures; such
as cost cutting, laying off the employees, freeze of employment, the fear of the commitment to
the future plans, a mindset to prevent the present state of affairs and others. The presence of all
these aspects can be seen in survival ventures8.
Lifestyle Ventures: According to the point of view of economic theory, the main reasons for
establishing lifestyle venture is the understating of the business activities that the entrepreneur
prefers and to ensure a certain level of production activity that can ensure the sufficient amount
of income of the entrepreneur9. Thus, it can be stated that the lifestyle ventures provide the
entrepreneurs with a stable amount of income based on the workable model of business and a
7 Hiatt, Shon R., and Wesley D. Sine. "Clear and present danger: Planning and new venture
survival amid political and civil violence." Strategic Management Journal 35.5 (2014): 773-785.
8 Klotz, Anthony C., et al. "New venture teams: A review of the literature and roadmap for future
research." Journal of management 40.1 (2014): 226-255.

6ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
maintenance approach to the management. In this kind of entrepreneurial venture, there is a need
for modest amount of reinvestment in order to maintain the competitiveness in the local market
in which they operate. The presence of single location premise can be seen under this types of
ventures, but there is not any scope for business expansion. It has constant number of employees.
As this types of venture has limited capacity, the entrepreneurs face difficulties in achieving the
economies of operation. It needs to be mentioned that the good quality of lifestyle works as a
major motivation to the entrepreneurs for setting up this kind of entrepreneurial venture. For this
reason, the owners of this kind of venture have the tendency to work long hours10.
Managed Growth Ventures: The difference of managed growth entrepreneurial venture can be
seen from the above two entrepreneurial ventures. The adoption of a workable business model
can be seen under this kind of entrepreneurial venture. Under this venture, the main aim of the
entrepreneurs is to ensure the stable growth of the business over time; and this can be achieved
with the introduction of new product into the market, entry into new business market, steady
business expansion and others11. The presence of more than one location can be seen for this kind
of ventures with more number of employees as compared to the above two ventures. One major
characteristic of managed growth venture is ongoing reinvestment in the business in the presence
of continuous as well as moderate business growth and business development. In the presence of
9 Morris, Michael H., Xaver Neumeyer, and Donald F. Kuratko. "A portfolio perspective on
entrepreneurship and economic development." Small Business Economics 45.4 (2015): 713-728.
10 Henry, Colette, et al. "Entrepreneurial leadership and gender: Exploring theory and practice in
global contexts." Journal of Small Business Management 53.3 (2015): 581-586.
11 Birley, Sue, and Simon Stockley. "Entrepreneurial teams and venture growth." The Blackwell
handbook of entrepreneurship(2017): 287-307.

7ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
all of these aspects, more stability and less aggressiveness can be seen in this kind of
entrepreneurial ventures while running the business operations. In other words, the main aim of
the owners of this kind of venture is to manage different business operations in order to fetch
stable sales, profit and growth. The presence of large number of managed growth ventures can be
seen in the world12.
Aggressive Growth Ventures: This type of entrepreneurial venture is considered as gazelles. The
major characteristic of this type of venture is that they are largely dependent on technology in the
presence of strong innovation capabilities and these aspects help in ensuring exponential growth.
The majority portion of funding of this kind of entrepreneurial venture comes from equity
capital13. The launching of this kind of venture is driver by business opportunities as one of the
major aims of the founders is the creation of new markets. Aggressive growth entrepreneurial
ventures typically focus on the business expansion in the national and international market.
Often, this kind of entrepreneurial venture is considered as the candidates for IPO (Initial Public
Offerings) or business acquisition. In this context, it needs to be mentioned that this type of
entrepreneurial ventures required large initial investment and there is large scope for
reinvestment for their growth and expansion. The presence of some specific characteristics can
be seen in this entrepreneurial ventures; such as expansions of the business operations, specific
facilities like cash flows as well as credit line of finance, humans resource with the required
12 Grilli, Luca, and Samuele Murtinu. "Government, venture capital and the growth of European
high-tech entrepreneurial firms." Research Policy 43.9 (2014): 1523-1543.
13 Baum, J. Robert, Michael Frese, and Robert A. Baron. "Entrepreneurship as an area of
psychology study: An introduction." The psychology of entrepreneurship. Psychology Press,
2014. 33-50.

8ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
knowledge and skills and others. These factors are needed to be considered in aggressive growth
entrepreneurial venture14.
The term ‘Typology of Entrepreneurship’ is a general term that is used for providing
description of the classification of the types of entrepreneurial ventures. The following table
shows the typology of entrepreneurship based on the personal financial risks.
Figure 1: Typology of Entrepreneurship Styles
(Source:15)
14 Katz, Jerome A. "Education and training in entrepreneurship." The psychology of
entrepreneurship. Psychology Press, 2014. 241-268.

9ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
The contents of the above figure can be used for the classification of the above-discussed
entrepreneurial ventures. The above discussion shows the presence of four types of
entrepreneurial ventures. As per the characteristics of survival ventures, it can be seen that the
entrepreneurs under this venture seek low risk along with low business activity and they want to
earn minimum amount of profit for the purpose of survival. After that, under the survival
venture, the entrepreneurs have the tendency to accept moderate amount of risk and activity for
the purpose of earning profit. According to managed growth entrepreneurial venture, the aim of
the entrepreneurs is to avoid high amount of risk and earn profit with the help of business
activities. Lastly, under the aggressive growth entrepreneurial ventures, the aim of the
entrepreneurs is to accept high amount of risk with the aim to earn high amount of profit16.
Similarities and Differences between Entrepreneurial Ventures
The following discussion shows the similarities and differences among the above-
discussed four types of entrepreneurial ventures.
Basis for
Differentiation
and Similarities
Survival Lifestyle Managed Growth Aggressive
Growth
Annual rate of
Growth
Time Horizon
Nominal growth
rate can be seen
under this venture
Day to day
business activities
Less than 5% rate
of growth can be
seen in this
venture
Business
The rate of growth
for this venture is
10 to 15%
One to two years
business
The growth rate
for this
entrepreneurial
venture is more
than 20%
Long term
15 Hunter, Murray. "A typology of entrepreneurial opportunity." Economics, Management and
Financial Markets 8.2 (2013): 128.
16 Schaltegger, Stefan. "A framework and typology of ecopreneurship: leading bioneers and
environmental managers to ecopreneurship." Making Ecopreneurs. Routledge, 2016. 95-114.

10ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Focus of the
Management
Style of
Management
Entrepreneurial
Orientation
Investment in
Technology
Source of Finance
Approach of Exit
Skills for the
Management
The managements
of this venture
focuses on selling
whatever they
have
The style of
management is
reactive
Very low
orientation can be
seen
There is not any
investment in
technology
Self source of
finance can be
seen in this
venture
Shut down of the
business needs to
be done for exit
The required skills
are making and
selling
operations on
weekly and
monthly basis
The focus area of
the managements
of this type of
venture is to
ensure the
maintenance of the
working of the
adopted business
model
The style of
management is
tactical in nature
Low orientation
can be observed
Limited
investment in
technology can be
seen
The business is
financed by self,
family, friends and
banks
Exit options are
shot-down, sell
and transfer of
assets
The needed skills
operations
Incremental
growth of the
business strategies
is the main focus
area of the
management18
The style of
management is
strategic in nature
Moderate
orientation is there
in this venture
Moderate amount
of investment in
technology can be
seen
The finance
sources are self,
banks, friends and
family and private
investors
The exit options
are sell, transfer
and merge
The needed skills
are strategizing,
planning,
leveraging and
delegating
business
operations for 2 to
5 years
The major area of
focus for the
management is the
scalability of the
business
The management
is this venture
likes to work in
strategic and
proactive manner
High orientation
can be seen
High amount of
investment in
technology can be
seen in this
venture
The sources of
finance are banks,
private investors,
public markets and
venture capitalists
The available exit
options are sell,
transfer and go
public
The major required
skill are planning,
innovation,

11ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
2. Assessment of the Impact of Small Businesses on the Economy
It needs to be mentioned that the small and medium businesses have some major impact
on the economic condition of the countries; and there is not any exception of this fact in case of
United Kingdom. The below discussion involves in the analysis and interpretation of data and
statistics for showing the impact of small businesses on UK economy.
Interpretation of How Micro and Small Businesses Impact on the Economy
The presence of huge number of small and medium sized businesses can be seen in the
UK economy. According to the Department for Business, Energy and Industrial Strategy
(DBEIS), there was the presence of a record 5.7 million private sector businesses in UK at the
beginning of the year of 2017; and there is an increase of 197,000 businesses since the year
2016. Among all of these businesses in the economy of UK, 99.3% consists of the small
businesses at the start of the year 2017 and the percentage for small or medium-sized (SMEs) is
17 Gabrielsson, Mika, Peter Gabrielsson, and Pavlos Dimitratos. "International entrepreneurial
culture and growth of international new ventures." Management International Review 54.4
(2014): 445-471.
18 Autio, Erkko, et al. "Entrepreneurial innovation: The importance of context." Research
Policy 43.7 (2014): 1097-1108.
19 Corbett, Andrew C., Jerome A. Katz, and Donald S. Siegal, eds. Academic entrepreneurship:
Creating an entrepreneurial ecosystem. Emerald Group Publishing, 2014.