Entrepreneurship and Small Business Management Report

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Entrepreneurship and Small Business Management
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Table of Contents
Introduction................................................................................................................. 3
LO1............................................................................................................................. 4
LO2............................................................................................................................. 9
LO3........................................................................................................................... 12
LO4........................................................................................................................... 16
Conclusion................................................................................................................ 18
Reference list............................................................................................................ 19
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Introduction
Entrepreneurship has various aspects as well as diversities further gets affected dye
to various factors. There are various typologies of entrepreneurship that has to be
applied suitably depending on the situation of the business. The report will be
encompassing though various ventures of entrepreneurs along with their relation
with the typologies of entrepreneurship. Furthermore, the report will be portraying a
vivid display of the different impacts of the small businesses in growing the overall
economy of a country. The various aspects of entrepreneurship mindset shall be
depicted in this report along with a detailed comprehension of the different
environments that fosters and hinder entrepreneurship. It is indispensible for a new
small business like the one of the new client to consider the factors and strategies
that has been portrayed in this report in order to prosper in the markets of UK.
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LO1
P1: Different types of entrepreneurship ventures and their relation to the
typology of entrepreneurship
Introduction
Entrepreneurship is as the commotion of setting up a business while considering the
risks regarding finance that and eventually aims at profit. Entrepreneurship
engrosses creation and innovation of new ideas for generating political, social
economical value wherein the formation of a new organisation is regarded to be
obligatory (Kuratko, 2016). This section will be providing a detailed comprehension
of the different typologies of entrepreneurship along with assorted entrepreneurial
ventures. The life cycle of the entrepreneurial firms will also be depicted in this
section of the report.
Entrepreneurship
An entrepreneur is typically referred to the source of ideas, services, and goods of a
small business that is owned and administered by the entrepreneur. An
entrepreneurial venture involves a huge amount of risks and it is the responsibility of
the entrepreneur to act as the role model for the employees and motivate them. In
any case, of monetary losses in the future, the entrepreneurs shall be the
responsible one.
The typology of Entrepreneurship can be classified into three types:
Individual entrepreneurship: This involves starting a new small-scale business
with a small number of employees where the entire profit resides with the
entrepreneur. The entrepreneurs enhance their respective lifestyle and way of living
through this specific typology of entrepreneurship. An individual entrepreneurship
includes various types of entrepreneurial ventures, which includes franchising,
acquisition as well as start-ups.
Corporate entrepreneurship: This specific type of entrepreneurship involves the
effort of a corporation to expand their trade and commerce to the further extent. This
includes the new developments in the products as well as services that are offered
by the organisation to the customers. The corporate entrepreneurship or
Intrapreneurship includes various types of ventures including new development,
public private partnership, joint venture, as well as franchise.
Public sector entrepreneurship: This type of entrepreneurship involves the effort
of the government to diversify and widen the products or the services that are offered
to the public within the territory of the government. The public sector or the
governmental entrepreneurship included several entrepreneurial ventures including
public-private partnership, new development, as well as joint venture.
An entrepreneurial venture can vary depending on the situation and purpose of the
business (Kuratko 2016). The following describes the various categories of
entrepreneurial ventures include along with their relationship with the typology of
entrepreneurship that shall also help the small business of the client:
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Start-up: These entrepreneurial ventures are generally young and small-scale
business organisation that either involves a handful of employee or is administered
by a single individual. This involves initial investments and risks as well. Therefore,
this entrepreneurial venture is extremely famous in individual entrepreneurship.
Acquisition: This involves buying a new business that already exists and there is no
need for the entrepreneur to start a new organisation. Despite of the fact that it
involves greater expenditure, it is less risky than start-ups as the entrepreneur shall
be administering an organisation that has a substantial growth and has their own
loyal customer base (Morris et al., 2018). Henceforth, both the Corporate as well as
Individual entrepreneurs can use it.
New development: This mainly constitutes the effort of the Research and
Development (R&D) department and this can be a new business or a project of an
existing organisation. Corporate as well as Public entrepreneurs can do new
development entrepreneurial venture.
Franchise: This involves the permission to sell or distribute a product that belongs to
a famous company. This entrepreneurial venture has reduces the risks though huge
expenditure on famous brands. Therefore, this is extremely beneficial for Individual
entrepreneurs although Corporate entrepreneurs can also use it sometimes.
Joint venture: This includes the participation of two or more organisation and
shares both the risk as well as cost. However, the future business venture can face
several conflicts due to disagreements of the parties and other similar issues. This
can be done by the Corporate entrepreneurs as well as the Public entrepreneurs.
Public private partnership: Both the government and private organisation holds
this entrepreneurial venture therefore; the efficiency of the private sectors can be
merged with the effectiveness of the public sectors. Therefore, it is suitable for the
Public as well as Corporate entrepreneurs.
The life cycle of entrepreneurship firms includes three different stages that includes:
 Birth stage
 Breakthrough stage
 Maturity stage
Figure 1: Life cycle of Entrepreneurship Firms
(Source: Colombelli et al., 2019)
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Conclusion
The section has provided various types of ventures held by entrepreneurs along with
a relation of the entrepreneurship typology and the ventures of entrepreneurs.
Furthermore, the life cycle stage of Entrepreneurship Firms has been portrayed in
this section.
P2: Similarities and differences between entrepreneurial ventures
Introduction
This section shall be differentiating among the three main types of entrepreneurial
venture along with their similarities. The section shall also be discussing about the
Social Entrepreneurship and Intrapreneurship.
The three main Entrepreneurial Ventures are as follows:
 Lifestyle Venture
 Smaller Profit Venture
 High Growth Venture
The table below shall be differentiating between the three main entrepreneurial
ventures:
Lifestyle Venture Smaller Profit Venture High Growth Venture
 Small economy
wherein owners has
the total control
 Run out of household
 Little growth
opportunity
 Expand capital through
debts financing
 Small company that
propels its way to
become a large one
 Does not consider
making huge profits
 Satisfied with a decent
living
 Focuses on innovation
 Primary goal aims at
maximising growth and
profit
 Attractive to investors
 Represents the
majority of the firms in
terms of quantity
Table 1: Difference between three main entrepreneurial ventures
(Source: Created by the learner)
Despite of the differences, there are several similarities among the three main
entrepreneurial ventures that have to be considered by the small business of the
client. This includes the following:
Based on new ideas
All the three that is lifestyle, profit and high growth entrepreneurship venture
depends on new ideas that mark the difference between their business venture and
others present in the market.
Risks involvement
Almost every entrepreneurial venture involves risks that mainly revolve around
financial issues. Furthermore, they are not linked with any known brands and as a
result attracting customers is extremely difficult.
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Established by open minded entrepreneurs
The entrepreneurs running the organisations are open-minded that allows them to
think outside the box. This highly promotes the growth of innovation of the products
as well as services of the organisation (Dey, 2018).
Innovative products
The products as well as services that are offered by the entrepreneurs are innovative
and trendy.
Chance of achieving greater success
Due to the innovative products as well as services, there is a high chance getting
famous among the customers.
Figure 2: The five C’s of Entrepreneurship
(Source: )
Intrapreneurship is defined as entrepreneurship within an established organisation.
An Intrapreneur is extremely self-motivated individual that tries to motivate the rest of
the employee working with him or her. Therefore, development of new products and
services are easier especially within the boundaries of an organisation (Baruah and
Ward 2015). Furthermore, there are several opportunities for experimenting, as the
organisation is responsible for the risks associated with the business venture.
Whereas, Social Entrepreneurship aims at specific social purposes and trade to
tackle the social problems that includes reduction of landfill, employing vulnerable
groups and working in specific community (Zahra and Wright 2016). Therefore,
social entrepreneurship highly depends on investments as well as grants.
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Conclusion
This section has differentiated among the three main entrepreneurial ventures and
has provided a detailed comprehension of the similarities among them.
Furthermore, this section has discussed about Intrapreneurship and Social
entrepreneurs.
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LO2
P3: Interpreting and assessing relevant data and statistics to illustrate the
impacts of the micro and small business on the economy
Introduction
This section shall be depicting numerical data and statistics that shall portray the
contribution of the SMEs in the development of the economy. Furthermore, the
impact of medium sized business in local economy, impact of large business on
economy, Impact of SMEs in the economy of London and Impact of SMEs in the
international economy shall be depicted in this section.
The SMEs consolidates the majority of the economy of the global economy. The
growth of their output contributes to the GDP. Furthermore, the small business
organisations increase the job opportunities of the unemployed labours in a country.
As per the stats of Hsu et al., (2017), almost 60% to 70% of the employment
depends on the small business organisations in most of the countries. Furthermore,
the downsizings of the larger economies are resulting in outsourcing functions that
significantly increases the growth of the economy of the SMEs. Moreover, almost
90% of the Small businesses promote the growth of innovation.
Figure 2: Business by Size UK
(Source: Rhodes, 2016)
The overall output that is generated from the SMEs is through the employment
growth that reduces poverty. The SMEs are regarded as an essential source f
export revenues in several developing countries. England is comprised of several
organisations and London is regarded as one of the global trade centre and has 33%
of the all the business in England (Rhodes, 2016). However, London only accounts
45% of the employment. Whereas, the South West of England has the highest SME
bases that accounts over 70% of the total employment in UK.
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Figure 2: Impact of SMEs in London’s economy
(Source: Malthouse, 2016)
During the early stage of the year of 2013, London had over 805, 100 SMEs and
consolidated over 99.8% of the private sector business of London. More than 49.8%
of the entire employment of London was influenced by the SMEs, which was around
2.3 million (Urwin and Buscha (2012). The business turnovers that are influenced by
the SMEs is around 47.7%.
A: Impact of medium sized business on economies: The SMEs highly promotes
the growth employment, allows the unemployed labours in the markets, and removes
poverty.
B: Impact of large business on economy: There is significant raise in the wages in
the small and medium sized firms from the large businesses. Apart from this, the
technology is also transferred that enhances productivity and efficiency that allows
organisations to survive in the competitive markets.
C: Impact of SMEs on local economy such as London: Being one of the major
trade centres in the world London has several large as well as small-scale
organisations that consolidate the economy of UK.
D: Impact of SMEs on International Economy: The SMEs highly promotes the
employment rates across the global platter and the rising downsizing of the large
sized business is resulting in hike of small business organisations.
Conclusion
This section has depicted the numerical data and stats regarding the impacts of
SMEs in shaping the economy of London and entire England. The impact of the
SMEs in various economies has also been depicted in this section.
P4: Explaining the importance of small business and business start-ups to the
growth of social economy
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Introduction
This section shall be portraying the Social Economy as well as Social Enterprises
along with a brief abbreviation of Corporate Social Responsibility (CSR).
Furthermore, the influence of the SMEs in promoting social economy will be provided
in this section.
Social economy is defined as a branch of economics that revolves around the
relationship of social economics and behaviour and typically explains the social
ethics, norms, and other philosophies related to social economy (Phillips et al.,
2015). These influence the customer behaviours and their spending behaviour as
well. A social enterprise aims at tackling social issues and enhances the life of the
people and community.
The Corporate Social Responsibility is defined as the responsibility of a business
in balancing the profit with the social activities that reduces the social issues (Brown,
2019). CSR promotes the growth of the environment and society around the
organisation. Policies such as the green policies promote the CSR of organisations.
The majority of the organisation including charities and voluntary organisations that
are regarded, as the social economic organisations, which are relatively small scale
(Cowling, 2016). Enhancing the environment and society shall benefit the
organisation as the consumer behaviour highly depends on the environment and
social issues.
Conclusion
This section has provided a conclusive statement on social economy and social
enterprises along with their impacts on the growth of social economy. Furthermore,
the Corporate Social Responsibility has been depicted in this section of the report
that has to be considered by the small business organisation of the client.
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LO3
P5 Determine the characteristic traits and skills of successful entrepreneurs
that differentiate them from other business managers.
Introduction
This section of the study will discuss about the different category of skills and traits
possessed by entrepreneurs that allows them to conduct their business successfully.
Personal Characteristic
The qualities possessed by an individual are known as personal characteristics. It
helps to develop the personality of an individual. As a result, individuals are able to fit
in newer conditions. It eases the way in which entrepreneurs conduct their business.
Skills
The ability of an individual to perform a specific task and expertise the same is
known as skills. It helps them to meet with the business requirements and operate
flawlessly.
Personal Characteristic of Successful Entrepreneurs
Self-confidence
Having adequate amount of self-confidence is considered highly vital for
entrepreneurs in terms of conducting their business. This allows them to believe in
their abilities to perform tasks (Sousa and Almeida, 2014). The presence of self-
confidence allows the entrepreneurs to explore certain areas of their business that
were yet unexplored.
Openness to Change
There are times, when the workplace is encountered with certain changes in terms of
their business operations. It is important for the entrepreneurs to embrace these
changes and motivate the employees to do the same. It will allow them to function
according to the market trends. Besides this, the overall flexibility of the organisation
is increased.
Being Competitive
Intense competition in the market imposes serious threats to business. Therefore,
entrepreneurs should have a competitive attitude that will help them to tackle the
pressure from other companies. It is ideally done with the implementation of
important strategies in the workplace and knowing about the moves of the competitor
(Holienka et al., 2015).
Highly Motivated
In order to conduct the business in a successful manner, it is vital for the
entrepreneurs to stay motivated. This will allow them to ensure that their employees
are being able to achieve the tasks that have been assigned to them. Therefore,
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