Examining the Impact of SMEs on the UK Economy: A Report

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ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT

Table of Contents
INTRODUCTION............................................................................................................................. 3
P1 AND M1 EXAMINATION OF DIFFERENT TYPES OF ENTREPRENEURIAL VENTURES AND
EXPLANATION ABOUT THEIR RELATIONSHIP WITH THE TYPOLOGY OF ENTREPRENEURSHIP.......4
P2 EXPLANATION ABOUT SIMILARITY AND DIFFERENCES BETWEEN ENTREPRENEURIAL
VENTURES......................................................................................................................................7
P3 INTERPRETATION AND ASSESSMENT OF RELEVANT DATA AND STATISTICS TO ILLUSTRATE
THE IMPACT OF MICRO AND SMALL BUSINESSES ON THE ECONOMY OF THE UK.........................9
P4 EXPLANATION ABOUT THE IMPORTANCE OF SMALL BUSINESSES AND BUSINESSES START-
UPS TO THE GROWTH OF THE SOCIAL ECONOMY.......................................................................11
M2 EVALUATION OF THE DIFFERENCES BETWEEN THE SMALL, MEDIUM AND LARGE
BUSINESSES IN MAKING THE ECONOMY AND APPLYING RELEVANT DATA AND STATISTICS.......12
P5 DETERMINATION OF THE CHARACTERISTIC TRAITS AND SKILLS OF A SUCCESSFUL
ENTREPRENEURS SO AS TO DIFFERENTIATE THEM WITH OTHER BUSINESS MANAGERS............14
P6 ASSESSMENT ABOUT THE ASPECTS OF ENTREPRENEURIAL PERSONALITY AND HOW THEY
REFLEC THE MINDSET AND MOTIVATION OF AN ENTREPRENEUR..............................................16
M3 EXPLORE AND EXAMINE DIFFERENT LINES OF ARGUMENT RELATING TO THE
ENTREPRENEURIAL CHARACTERISTICS........................................................................................ 17
P7 EXAMINATION ABOUT BACKGROUND AND EXPERIENCE IN FOSTERING AND HINDERING
ENTREPRENEURSHIP USING RELEVANT EXAMPLES.....................................................................19
M4 ANALYSING THE LINK BETWEEN ENTREPRENEURIAL CHARACTERISTICS AND INFLUENCE OF
PERSONAL BACKGROUND IN RESPECT TO SPECIFIC SUCCESSFUL ENTREPRENEURS...................20
CONCLUSION............................................................................................................................... 21
REFERENCES.................................................................................................................................22
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List of Figures
Figure 1: Impact of SME on the UK's Economy..............................................................................9
Figure 2: % of SME's across the UK..............................................................................................13
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INTRODUCTION
In today’s growing economy around the world, there is an urgent need for the new business
which has the potential to grow and sustain in the global market in an effective manner.
However, for running the business in an effective manner, it has become important for the
entrepreneurs to fulfil their aims and objectives and create their successful entrepreneurship
venture. In the given study, there would be a detailed discussion about the entrepreneurship
and role it plays in establishing a successful business for any given entrepreneurs who are
taking initiative and risks so as to start their own business.
Entrepreneurs are those creative persons who transform a vision into reality and help in
achieving a high success rate in the given business. There are different kinds of business or
startups that may be a small, medium or large enterprise. Entrepreneurs who are at risks to
fulfil their dreams via their skills and creativity are aiming for maximizing the profit for the
organization and giving better services to the customers. Entrepreneur creates a new market
for the customers that helps them while trading and that makes a good impact on the economy
by providing the customers with the ease of doing trade making better services (Frederick, et al.
2018).
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P1 AND M1 EXAMINATION OF DIFFERENT TYPES OF ENTREPRENEURIAL
VENTURES AND EXPLANATION ABOUT THEIR RELATIONSHIP WITH THE
TYPOLOGY OF ENTREPRENEURSHIP
INTRODUCTION
Entrepreneurship is the key to success for any organization. The organization needs this so as to
maximize the profit by providing better facilities while doing the business. Nowadays, there is
an urgent requirement of entrepreneurship in every organization. Entrepreneurship is done by
the entrepreneurs who are self-motivated, dedicated, inspired, innovators to create something
new and different from the other entrepreneurs, who believe in taking risks and are always
optimistic for the future. As the economy of the world is growing and so the business and for
that entrepreneurship is needed for the betterment of the businesses.
TYPES OF ENTREPRENEURSHIP VENTURES
Survival Ventures
These are kind of business which is done by people who wants to earn a living only for them
and their families. These are mostly unregistered and do not involve a higher level of risk taking
and they also do not involve many employees in the business and runs for the betterment of
their family.
Lifestyle Ventures
In this business, a limited number of employees’ works and it involves a little bit of a risk. The
money earned from this can be reinvested in the business so as to earn the maximum profit
and be in the competition for a longer time.
Managed Growth Ventures
In this type of organization, they have high competition and have limited chance of new
entrance its organization infrastructure is also good enough (Burns, 2016).
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Aggressive Growth Venture
In these kinds of business, there is a higher chance of profit as there are higher chances of risk-
taking as well. These businesses have high growths and open ways for the new entrants as well.
Owner Manager
These are that individual who not only owns the business but also runs the organization as well
as properly manages the whole enterprise related to the given business.
Social Entrepreneurship
This business runs on social welfare and helps in significant growth of the individual and society.
Besides, they also aim at increasing their living standard to a higher extent (Piperopoulos,
2016).
PUBLIC SECTOR AND CORPORATE SECTOR ENTERPRISE
Public sector enterprises
These are those enterprises whose control and ownership are fully in the hands of Government,
and whose shares are held largely by the Government which is up to 51%. For survival, they
require high growth and are also not much competitive in nature. They provide a large number
of employees and thus help in providing welfare to society. So, these enterprises do not aim for
the maximum profit or talk about creativity in the organization. The funding or investments are
done by the government and so are the profit or benefits are by the government (Mazzucato,
2015).
Corporate sector enterprise
These are those enterprises which are in the control of the private sector. These are also called
private enterprises. They work with an aim to earn maximum profit from the organization and
provide better services to the customer. The employees working in these organizations are self-
motivated and inspired by their employers to work for the better growth of the company. They
have higher aims to achieve the targets of the organization. Moreover, they also provide better
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and innovative products to their customers so as to satisfy their needs and ensure better
services to them. In the corporate sector, there is high competition to sustain them and this it
becomes important to take risks and have a good approach while working. The corporate sector
is working a lot to generate employment which is needed for the better economy of the
country (Reijonen et al., 2016).
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P2 EXPLANATION ABOUT SIMILARITY AND DIFFERENCES BETWEEN
ENTREPRENEURIAL VENTURES
ENTREPRENEURIAL
VENTURE TYPES
SIMILARITIES DIFFERENCES
INTRAPRENEURS Leadership skills are similar
in all ventures and there is
also the presence of diverse
and creative approach in
their leaders (Morris et al.,
2018)
There is a utilisation of
entrepreneur skills so as to
either initiate a new thing
within the business
organisation or launch a new
project
SERIAL ENTREPRENEURS There is a significant balance
between passion and
innovation of each
entrepreneur in a given
business
There is a significant
difference in the thinking of
the individual who runs a
business and has a look at
the risks and rewards
associated with the given
business
OWNER MANAGERS The could shift their
direction with ease when
confronted with problems
and challenges
Also, play the role of the
manager in an organisation
and are successful in
depicting good employee
behaviour within the
organisation (Morris et al.,
2018).
PUBLIC ENTREPRENEURSHIP The major objective is the
creation of a higher value for
the public and society
It utilises traditional
procedures with no
involvement of higher risks
PRIVATE Their main objective is to Here, the entrepreneur aims
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ENTREPRENEURSHIP provide good quality services
so as to earn a high amount
of profit
for earning higher income
but also try to cover the
operational cost (Carter and
Jones-Evans, 2012)
SOCIAL ENTREPRENEURSHIP Lay the main emphasis on
the welfare of the individual
as well as the society
The major difference with
other ventures is that they
do not go after money and
emphasis more on the
proper development of the
given society
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P3 INTERPRETATION AND ASSESSMENT OF RELEVANT DATA AND STATISTICS TO
ILLUSTRATE THE IMPACT OF MICRO AND SMALL BUSINESSES ON THE ECONOMY
OF THE UK
Figure 1: Impact of SME on the UK's Economy
Source: [Giaoutzi et al., 2016]
SMEs help in an escalation of the economic growth and thus help in generation of a significant
amount of revenue for the country. Furthermore, they also provide opportunities for the
generation of employment which would decrease the unemployment rate and would boost up
the economy. From the reports of the UK Government, it was found that there are at present
5.4 million SME’s all over the UK (Parker, 2018).
Small business companies are those who owned and controlled by sole proprietors, partners,
small business owners. The numbers of employees in these businesses are fewer they are liable
to pay tax according to the tax policy. These businesses can be started at a low cost with few
assets and work for customer satisfaction. These enterprises act as the backbone for the UK
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Economy because they help in the creation of new employment opportunities which has been
evident in the form of 16.3 million people being employed in the UK which is almost like 60% of
all the private sector employment. Small business accounts for 99.5% of the business in every
main sector. There is a small and medium-sized business which accounts for 2 trillion of
turnover in 2018. By going through these results, it could be said that the small and medium
business plays a very crucial role in the contribution to the UK Economy (Giaoutzi et al., 2016).
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P4 EXPLANATION ABOUT THE IMPORTANCE OF SMALL BUSINESSES AND
BUSINESSES START-UPS TO THE GROWTH OF THE SOCIAL ECONOMY
Social entrepreneur is an entrepreneur who works for the wellbeing of the people residing in
society through its working in its organization. They provide employment to a large number of
people and also aim at improving their living standards. They usually work in SME's and provide
a significant contribution to the growth and development of the economy. Small business and
business startups play a significant role in the growth of the UK economy as well as for the
society with a view to bringing something innovative and creative so as to provide better
services and generating employment with a significant contribution to the society. Now, the
government and banks also fund the start-up businesses as they determine the outcome and
limits of the given business. In the UK, the small business companies contribute a lot in the
growth of the economy as they account for about 99.3% of all the privately owned firms. The
small and medium business contribution is important in the development of the economy
(Dees, 2017).
Total employment provided by the small and medium business in the UK has been about 15.7
million which is about 60% of all the private sector firms. The government also plays an
important role in the growth of the economy as they cooperate with banks and financial
institution for facilitating loans to small business and startup. They are an important part as
they understand that the growth it the small business and start-ups would boost up the social
economy to a higher extent (Testa et al., 2017).
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