Entrepreneurship and Small Business Management Report

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Entrepreneurship and Small Business
Management
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Table of Contents
Introduction:...............................................................................................................................3
Task 1- Exploring different types of entrepreneurial ventures (LO1):......................................3
Explaining different types of entrepreneurial venture and its relationship with typology of
eentrepreneurship (P1, M1):...................................................................................................3
Explaining the similarities in between different types of entrepreneurial ventures (P2):......4
Task 2- Assessing the impact of small business on the economy (LO2):..................................5
Impact of small and micro business on the economy (P3, M2):............................................5
Explaining the significance of small business and business start ups on the social economy
(P4):........................................................................................................................................7
Task 3- Determining the key aspect of entrepreneurial mindset (LO3):...................................8
Assessing the characteristics, traits and skills of successful entrepreneurs (P5, M3):...........8
Assessing how the different aspects of entrepreneurial personality on entrepreneurial
motivation and mindset (P6):...............................................................................................11
Task 4- Exploring different environmental factors that foster or hinder entrepreneurship
(LO4):.......................................................................................................................................11
Examining how the background and personal experience have both positive and negative
impact on entrepreneurship (P7, M4)...................................................................................11
Conclusion:..............................................................................................................................12
References:...............................................................................................................................13
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Introduction:
Entrepreneurship is the process of launching and running own business successfully. The
inventors of these businesses are called entrepreneurs. DeNisi (2015 commented that
entrepreneur is an individual person, operating their industry by entrepreneur is a person by
own financial risk. This is basically the mode of creating something innovative by integrating
necessary time along with effort. Galloway et al.(2015) observed that as the uncertainty in the
business domain is increasing rapidly, small businesses are also attaining considerable
growth. It is the latest trend in the market to run business independently. This paper will put
forth in-depth discussion regarding entrepreneurship and small business and their impact on
the economy. The skill and competencies of successful entrepreneurs will also be discussed.
Furthermore, this paper will evaluate the influence on personal background on
entrepreneurial mindset.
Task 1- Exploring different types of entrepreneurial ventures (LO1):
Explaining different types of entrepreneurial venture and its relationship with
typology of eentrepreneurship (P1, M1):
As per the observation of Hillary (2017) entrepreneurship aims to deal with the changes
efficiently. In addition, using the necessary resources appropriately in terms of increasing
statistics of profit is also a key aim of running entrepreneurial venture. From the structural
point of view, entrepreneurship ventures are separated into three different parts such as public
enterprises, private enterprises and social enterprises. Public enterprises fall under public
sector, which are being operated by following governmental framework. Henrekson (2014)
highlighted by saying that such enterprises can have a significant influence on promoting
national economy. Here, government holds the responsibility of executing essential decisions,
based on which effective strategies are being implemented. Both the government and
developmental agencies are equally responsible for controlling public enterprises.
Contrarily, the private enterprises are owned and controlled by individual person. This
person is solely responsible for both gain and loss of business. Productive employees, loyal
and satisfied customers and higher statistics of profit are some of the major positive aspects
of running business independently. On the other hand, Jaouen and Lasch (2015) showed that
social enterprises are the major business unit, being operated by individual people without
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any assistance from government. Being non-profit organisation, the aim of this type of
venture is to execute comprehensive business strategy and thus maximise both environmental
and social well-being.
According to size, entrepreneurial ventures are segregated into micro, small and medium size
organisations. Kolb and Wagner (2015) pointed that micro-enterprises are considered as
small business, being operated by hiring very nominal number of staffs. The annual turnover
of this kind of enterprises is less than 2,000,000. In addition, Kuratko (2016) also showed that
these types of organisations fall under private sector. Medium sized enterprises are operating
by investing nominal amount of money.
The entrepreneurial ventures are divided into three different parts which are as follows:
 High growth venture
Wagner (2017) commented that the fundamental aim of high growth venture is to accomplish
the objectives of small business by accelerating profitability. Making high quality of products
and implementing robust promotional strategies to keep the customers attracted is the major
goal of high growth venture.
 Lifestyle venture
According to Storey (2016) these types of business unit are generally operated by the owner
in order to have strong financial base. In addition, through this type of venture makes paves
the way for the owner to have certain lifestyle.
 Smaller Profit venture
Lifestyle venture intends to execute innovation and thus accomplish fundamental goal of
business. Based on the observation of Storey (2016) it can be said that amplifying degree of
proficiency rather than making money merely is the aim of Lifestyle venture.
Explaining the similarities in between different types of entrepreneurial ventures
(P2):
Subsequent discussion will help to figure out the similarities as well as differences in between
high growth venture, lifestyle venture and smaller profit ventures:
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a) The aim of all these types of ventures is to run business successfully. Still, in the case of
high growth venture, the owners always seek investor, which is not applied with that of the
lifestyle venture (Schaper et al.2014).
b) The owners of high growth ventures always maintain healthy relationship with the
investors in order to keep them informed regarding the business process, which is not so with
that of the lifestyle venture.
c) Innovation is the key aspect of smaller profit venture, contrary to which the smaller profit
ventures always aim to increase rate of profitability.
Premand (2016) shaded light on the fact that in the entrepreneurial ventures, the owners hold
the responsibility of success and failure. One of the major similarities in between public and
private enterprises is that, both of them always put strong effort in terms of improving quality
of products. In addition, both of them also intended to implement policies and procedures to
integrate satisfaction among the customer. Khosla and Gupta (2017) opined that another
greatest similarity is that using advanced technology to promote growth of business is another
vital purpose of public and private enterprises. However, et al (2014) argued by stressing on
the fact that government is solely responsible for controlling the public organizations, while
the owners are responsible for public organizations. Furthermore, in the private enterprises,
the management holds the responsibility of practicing effective decision making process.
Burrows (2015) said that as the voluntary organisation, the making effective change in the
society is the underlying aim of social enterprises.
In the case of micro-enterprise, the owner is independent to take effective decision and thus
control their business as per the requirements in the market. The small and micro businesses
are structurally different from each other. In the case of medium size business, the chance of
expansion is higher than that of the micro-businesses, in which the rate of annual turnover
remains in between 1,000,000- 2,000,000 (Bhachu 2017). The main aim behind running
small business is to increase profit margin and thus strengthen financial base.
Task 2- Assessing the impact of small business on the economy (LO2):
Impact of small and micro business on the economy (P3, M2):
In the intense competitive business scenario of contemporary times, the trend of running
business independently is gaining significance importance. Operating small and micro
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businesses has become small and micro businesses the most significant ways, through which
robust economic progression can be attained. Drucker (2014) opined that both small and
micro businesses play a pivotal role in increasing rate of profitability in both domestic and
national level. This is the way, through which the critical issue of unemployment are going to
be solved soon. It has been reported that during 2006, more than 5 million private sector
businesses have been created. Additionally, 2015-2016 the rate of private sector businesses
have been accelerated drastically and became 97000. In the total private sector, the statistics
of medium business is 99% and the rate of small business is 90%.
Huggins and Thompson (2015) observed that both small and medium size business can have
a strong influence on UK economy. Employment rate has been increased by 60%. This can
have a strong influence on minimising the global issue of unemployment. The total number
of employment in both small and medium size business is 47.98 which are similar to that of
the number of staffs of large business. With the advent of small and medium size business,
excessive cost of operating business has also decreased (Singe et al.2015). This trend is also
paving the way of attaining subsequent economic growth. During 2016, the rate of annual
turnover in UK was 1.8 trillion.
Figure 1: impact of small, medium and large business on the economy
(Source: Schaltegger et al.2016)
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Report published by European Commission shows that, entrepreneurship is driving economic
growth, job creation, innovation and societal integration. It is important to note in this context
that the rate of annual turnover of small firms is increasing drastically.
Figure 2: Statistics of annual turnover of small businesses
(Source: Huarng and Ribeiro-Soriano 2014)
There are more than 2 billion small businesses, running in UK, which are playing a major
role in increasing the rate of turnover. According to recent report from International Trade
Centre, both small and micro businesses are playing a major role in progressing economy by
building enormous employment opportunity.
Explaining the significance of small business and business start ups on the social
economy (P4):
The small businesses comprise of those organisations, which are exclusively operated by
individual person. Such businesses are the key to attain consistent economic progression by
creating wide range of employment opportunities. In addition, the small and medium size
businesses are putting consistent effort in satisfying the requirements of customers, which is
the key of coping up with intense competition in the market (Tehseen and Ramayah 2015).
Unlike the larger firms, in the case of small and medium size organisations, the owners are
responsible for controlling both benefit and risk. Integrating innovation and thus improving
the business process is the most significant aspects of small business, through which they are
becoming able to sustain in the extreme uncertain condition of UK market (Bhachu 2017).
Start-up businesses can also have a strong impact on the economy. In order to keep the
customers interested and attracted, the starts up business always seek to maintain healthy
relationship with the target. Through this way, they gather information regarding the latest
trend of target market. Expanding local business is the fundamental aim of both small
businesses and start ups (Kuratko 2016). This is playing a major role in advancing local
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economy. By employing local people, the start ups are contributing a lot towards decreasing
rate of unemployment in domestic level. Additionally, the start ups also pay a considerable
amount tax regularly. This is the way, through which the rate of GDP (Gross Domestic
Product) is increasing rapidly. From the observation of Hillary (2017) it is evident that both
small business and start ups can have a comprehensive influence on promoting economy.
Task 3- Determining the key aspect of entrepreneurial mindset (LO3):
Assessing the characteristics, traits and skills of successful entrepreneurs (P5,
M3):
The entrepreneurs should possess certain skill and competencies, which enable them to run
their business successfully and thus expanding business in terms of improving the statistics of
profit. As per the discussion of DeNisi (2015) maintaining collaboration is one of the greatest
skills of successful entrepreneur. With the assistance of this skill, successful entrepreneur
build healthy relationship with the team members. The skills which the successful
entrepreneurs should possess are as follows:
Interpersonal Skills
 Communication skill
Through this skill, the entrepreneurs communicate the goals and vision of the business with
both internal and external stakeholders.
 Negotiation
This is the greatest skill, through which the entrepreneurs resolve any kind of organisational
conflict and negative attitude among the human resources.
 Leadership and motivation
This skill enables the entrepreneurs to lead the employees to proper direction and generate
motivation to work with utmost efficiency. Empowering the staffs in decision making process
too is a key skill of successful entrepreneurs (Kuratko 2016).
 Personal relationship
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Healthy personal relationship is the key of working proficiently with team members. This
trait also supports in amplifying emotional intelligence. Being one of the famous
entrepreneurs in UK, Andrew Carnegie possesses this skill and thus controls his business
successfully by collaborating with others.
 Ethics
This is also a vital skill of successful entrepreneur, which enables the entrepreneurs to
integrate trust and respect among the staffs. At the same time, this skill also serves the
entrepreneurs with the ability to ensure transparency in the business process, which is the key
of keep the staffs satisfied (Premand 2016). Moreover, ethics also helps the entrepreneurs to
encourage the efficient staffs to complete their assigned task with utmost efficiency.
Practical Skill
 Decision making
This is the greatest skill and effective decision determines the direction of business. It is vital
for the entrepreneurs to explore information and take decision accordingly to promote growth
of business.
 Technical expertise
Advent of technology is playing a major role in promoting speed in business. Thus,
entrepreneurs must have sound technical competency which can enable them to modify the
business process as per the latest trend in market.
 Planning
Running business successfully requires comprehensive business plan. Thus, this skill can
enable the entrepreneurs to implement effective framework and thereby generate effective
business related decision.
Personal Characteristics
 Optimism
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This is the major trait of successful entrepreneur, which paves the way to cope up with
difficult situation. In addition, optimism also helps in implementing robust business model in
terms of improving internal functionality of a firm.
 Initiative
This is also a major trait of successful entrepreneur, which enables the entrepreneurs to
introduce something new and innovative. In addition, this trait also helps in solving critical
business related issue.
 Risk tolerance
Risk tolerance is the most important factor of becoming a successful entrepreneur. This trait
supports in encountering any kind of impending risk and take effective decision in any kind
of uncertain situation (Huggins and Thompson 2015). With the assistance of this skill, J.K.
Rowling, the famous entrepreneur of UK has become able to resolve significant business
related issue.
 Vision
Having clear vision at the initial phase of business process is one of the greatest traits of
successful entrepreneurs. Having clear vision enables the people to implement robust
business strategy and operate the business by keeping in mind ongoing trend in the market.
This is the way, through which predetermined business goal can be accomplished. Setting
clear vision has paved the way for the entrepreneur like Andrew Carnegie to implement
robust business strategy and thus sustain in the highly competitive market of UK.
 Resilience
In the extreme uncertain business scenario, integrating flexibility in dealing with the staffs is
highly required. There lies the significance of resilience as it helps the staffs to maintain a
balance in their personal and professional experience. Additionally, this trait also helps in
maintaining a healthy working environment in the organisation, which is very much needed
to keep the staffs satisfied (Huarng and Ribeiro-Soriano 2014). With the assistance of this
trait, J.K. Rowling has become able to initiate positive working environment and thus
integrate work related interest among the human resources.
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Assessing how the different aspects of entrepreneurial personality on
entrepreneurial motivation and mindset (P6):
From the very initial stage, people undergo diverse experiences. Such experience plays a
major role in making the people dynamic. Thus, catering innovation is the major trait of
successful entrepreneur. Furthermore, with the assistance of passive adaptive behaviour, the
entrepreneurs can figure out effective business process. Moreover, collaborative idea also
supports in executing ideas and share them with that of the employees (Tehseen and
Ramayah 2015). Still, as integrating innovation is a complicated process, this can have a
negative idea in the business process. However, with the assistance of leadership quality, the
entrepreneur can mitigate such difficult situation. The inclusion of autonomous leadership
quality, it becomes easy for the entrepreneurs can transform ideas into reality by driving the
staffs towards common direction (Bhachu 2017). Thus, it can be said that autonomy is a
major personal trait of entrepreneurs, which enables them to motivate the people to play their
role properly.
Higher degree of creativity is a key trait of successful entrepreneur which paves the way for
entrepreneurs to generate effective business related ideas and improving internal functionality
of a firm. Behaviour of entrepreneurs must also be highly dynamic, which is also being
modified with the passage of time. Self-efficacy is also a critical role in strengthening the
efficiency towards accomplishing an assigned task (Khosla and Gupta 2017). In addition,
self-efficacy also supports in improving prompts analytical ability and thus run business
process in an innovative way. Exploring effective ideas is also a vital trait of successful
entrepreneur to set proper goals and thus act accordingly to transform the opportunities into
reality.
Task 4- Exploring different environmental factors that foster or hinder
entrepreneurship (LO4):
Examining how the background and personal experience have both positive and
negative impact on entrepreneurship (P7, M4)
Background and personal experience play a major role in promoting career of successful
entrepreneur. These factors can foster as well as hinder entrepreneurship. Factors such as
size, type and economic structure and family background can have a significant impact on
exhibiting strong level of entrepreneurship. Family background is considered as major source
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of industrial entrepreneurship (Kuratko 2016). The nature of family is a major factor in this
context. Thus, upbringing in a joint family supports in integrating diligence among people.
Using the skill of labour properly is also a major aspect of successful entrepreneur.
Background of the family also helps driving entrepreneurship mindset among people. Nuclear
family background makes a people less hardworking.
The micro enterprises are mostly operated by family, which paves the way for people access
human capital, which is the key of operating business successfully. Thus a family with
comparatively weaker bond can hamper communication skill and thereby obstructs them to
share their common goal and objective with the fellow workers (Premand 2016). Past
experience is also a critical factor in building entrepreneurship behaviour. This factor
determines if a person will succeed or fail as entrepreneur. In addition, past experience also
shapes behaviour of entrepreneur. This is the way, through which people can analyse
different business related factors in detail.
Belief regarding the whole world is also created by past experience. Thus, negative
experience can hinder ability of people to perceive aspect. Risk taking ability is also a key
skill of entrepreneur. Optimistic attitude is very much needed in this context. Thus, negative
experience can create barrier for people to think positively (Wagner 2017).
Conclusion:
Based on the discussion, it can be concluded by said that strong skill and competencies play a
major role in enable an individual to be successful entrepreneur. With the assistance of strong
skills, the entrepreneurs can attain a vital position in the market. This report has highlighted
how family background and personal experience shape the belief and attitude of them. As the
uncertainty in the industry is increasing rapidly, the entrepreneurs must possess risk taking
ability. Through this way, critical business related decision can be taken by resolving any
kind of negative situation.
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