Entrepreneurship and Small Business Management Assignment

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

1
ENTREPRENEURSHIP AND SMALL
BUSINESS MANAGEMENT

2
Table of Contents
INTRODUCTION ...................................................................................................................... 3
LO1: ENTREPRENEURIAL VENTURE TYPES .............................................................. 4
ENTREPRENEURSHIP ....................................................................................................... 4
ENTREPRENEURIAL VENTURE .................................................................................... 4
ENTREPRENEUR TYPOLOGY......................................................................................... 6
MICRO, SMALL AND MEDIUM ENTERPRISES ........................................................ 7
PUBLIC AND CORPORATE SECTOR ENTREPRENEURSHIP ............................. 7
SIMILARITIES AND DIFFERENCES AMONGST THE DIFFERENT KINDS OF
ENTREPRENEURS ............................................................................................................... 7
LO2: IMPACT OF SMALL BUSINESS ON ECONOMY .................................................. 8
NATURE AND CHARACTERISTICS OF BUSINESS .................................................. 8
IMPACT OF SMALL AND MICRO BUSINESS ON THE ECONOMY OF UK ...... 8
SOCIAL ECONOMY AND START-UPS ........................................................................ 10
LO3: KEY ASPECTS OF ENTREPRENEURIAL MINDSET ....................................... 12
DIFFERENTIATING CHARACTERISTICS BETWEEN ENTREPRENEURS
AND MANAGERS................................................................................................................ 12
ENTREPRENEURIAL MINDSET ................................................................................... 12
CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS ................................. 13
MOTIVATIONAL TRAITS AND ENTREPRENEURS.............................................. 14
LO4: ENVIRONMENTS IMPACTING ENTREPRENEURSHIP ................................ 16
BENEFITS AND DRAWBACKS OF ENTREPRENEURSHIP ................................ 16

3
INTRODUCTION
The entrepreneurs are being considered as the major body which is responsible for the
establishment of the organization. This assignment is being prepared with the objective of
exploring the management of small businesses and entrepreneurship. This would enable me as
a new entrepreneur to ensure the success of the business organization. Therefore, with this
objective, the assignment would discuss the various kinds of entrepreneurial ventures, the
impact of the establishment of new ventures on the economy, the mindset of the
entrepreneurs and also the environmental factors which have an impact on the operations of
the entrepreneurs.

4
LO1: ENTREPRENEURIAL VENTURE TYPES
ENTREPRENEURSHIP
Kirzner, (2015) has defined entrepreneurship as-
“It is the willingness and the capacity of developing and organizing a new business venture. The
establishment of new business carries with itself huge risks.”
ENTREPRENEURIAL VENTURE
Birley and Stockley, (2017) has defined entrepreneurial venture as:
“An organization which is being established with the objective of producing social and
economic value is called an entrepreneurial venture. This is being done by emphasizing on
opportunism and innovation."
TYPES OF VENTURES
Figure 1 Types of Ventures
(Source: Morris et al., 2018)
Lifestyle venture
These are the business organizations who aim to achieve the business goals and earn a huge
amount of profits, with the objective of improving their lifestyle. These ventures focus on
providing better amenities to its members.

5
Example- Elizabeth
Social entrepreneur
These entrepreneurs have a focus on improving societal relationships. They have their focus on
earning huge market share which helps them in gaining business profits. These organizations
function with the objective of providing quality services to customers for fulfilling their social
needs (Bikse et al., 2015).
Example- Grammen Bank
Female entrepreneur
These are the women entrepreneurs who manage the activities of the business and bear the
risks associated with the same. They make a significant contribution to the economy.
Example - Valerie Stark
High growth venture
These organizations focus on achieving higher revenues and market share by making full
utilization of the available capacities (Birley and Stockley, 2017). The preparation of the
strategic plan helps the organization in achieving strategic growth.
Example- George Matus
Drone venture
These are the traditional businesses that are not acceptable to the changes in business
activities. They do not seem to be bothered to determine the available new market
opportunities.
Example- Tom Anderson

6
ENTREPRENEUR TYPOLOGY
Entrepreneur typology can be defined as the classification of the various different kinds of an
entrepreneurial model which is based on the characteristics (Jaouen and Lasch, 2015). They are
linked with the personality traits of the individual ventures.
Figure 2 Entrepreneur Typology
(Source: Jaouen and Lasch, 2015)
Solo – Service entrepreneur - These are the individuals with very less experience and who
operate their business in the form of a sole proprietorship. The investments are also very low.
Commodity entrepreneur - These entrepreneurs make investments within the saturated
markets for deriving potential gains.
Franchise entrepreneur - A large number of people are being attracted and recruited under a
famous brand name. this is also known as the network marketing entrepreneur.
Opportunity entrepreneur - These entrepreneurs aim to gain a competitive position within the
market by searching for new opportunities (Birley and Stockley, 2017).
MICRO, SMALL AND MEDIUM ENTERPRISES
Micro – the micro-enterprises are the very small enterprises whole turnover is less than £ 2
million every year and the organization can have a maximum of ten employees.

7
Small – the small enterprises can have a maximum of fifty employees and the turnover should
also be less than £ 10 million
Medium – the medium enterprises have a turnover of less than £ 50 million with employee
strength ranging from 50- 250 employees (Berisha and Shiroka Pula, 2015).
PUBLIC AND CORPORATE SECTOR ENTREPRENEURSHIP
The public sector organizations are the departmental undertakings and the government
organizations who undertake the business activities with the sole objective of ensuring the
welfare of the society at large (Kearney and Meynhardt, 2016).
The corporate sector comprises of many public and private sector organizations. The major
objective of these organizations is to earn profits by indulging themselves in the development
of competitive strategies and enhanced organizational policies (Kearney and Meynhardt, 2016).
SIMILARITIES AND DIFFERENCES AMONGST THE DIFFERENT KINDS OF
ENTREPRENEURS
From many studies, it has been observed that all the kinds of entrepreneurship are being
developed with the objective of accomplishment of a pre-established goal. However, their
motive for undertaking the business activities would be different. In lifestyle ventures, the
entrepreneurs set a long term objective of gaining a large market share by adopting
competitive strategies (Bikse et al., 2015). In contrast to this, the serial entrepreneurs frame
strategies which are aimed at delegating the responsibilities to the junior management for
running the business activities.
The high growth ventures establish their business with the objective of rapidly increasing their
profits. For this reason, the organization indulges in innovative advertising strategies and also
promotional campaigns. The strategies adopted by these organizations are helpful in
maintaining a strong market position. Also, it is evident that all kinds of entrepreneurs are
required to undertake huge risks while conducting their business activities (Kim and Wagman,
2016).

8

9
LO2: IMPACT ON ECONOMY
NATURE AND CHARACTERISTICS
The business organizations can be defined as the entities which are engaged in the processes of
manufacture, distribution and offering services. These are being offered to the community
members who are ready to pay a consideration for the same (Boyd et al., 2017). The business is
being established with the purpose of conducting economic activities and can be classified as:
 Sole proprietorship: This organization is being established and managed by a single
individual by use of substantially less capital. Also, the owner’s liability is considered
unlimited.
 Corporation: The Corporation has a separate legal entity as compared to its owners.
The owners are the individuals who have held the shares of the company. The owners
also have limited liability restricted to the amount of unpaid amount on the share
capital (Moore, 2016).
 Partnership: This kind of business organization is being jointly held by two or more
individuals. These individuals make contributions in terms of both the capital and also
the other required resources. The risks and the profits are being shared as stated in the
partnership agreement. The partnership can be both limited and unlimited partnership
(Boyd et al., 2017).
SMALL AND MICRO BUSINESS AND UK ECONOMY
SMALL BUSINESS
In 2016, the small businesses in the UK contributed 60% of private sector employment. There
were 5.5 million businesses existing with an annual turnover of 1.8 £ million (Facts about UK
SMEs, 2019). These organizations contribute significantly by providing employment and
increasing the normal wage rate within the economy. However, it is evident that the small
businesses established in the UK are more productive than the organizations in other parts of
the UK.

10
MICROBUSINESS
In the UK, the micro businesses account for a sales of £ 552 billion and also employment
opportunities for 4.1 million people (Facts about UK SMEs, 2019). Thus, it can be said that they
play a major role in improving the lives of people.
Figure 3 Objectives of Micro Business
(Source: Britain Report, 2018)
From the above figure, it can be concluded that the owners of the micro-business have their
major objective in ensuring the continuous operations of the business. Also, the other major
objectives of running a micro- business are the generation of employee engagement culture
and in increasing the social benefits from business activities.

11
Figure 4 Investment by micro-business to support innovations
(Source: Britain Report, 2018)
The micro-businesses have their major focus on making innovations with regards to the
software and hardware of the computers. The innovations are also being done by collaborating
with the external business partners. Also, these organizations play a key role in developing new
means and techniques for undertaking promotional activities (Facts about UK SMEs, 2019).
SOCIAL ECONOMY AND START-UPS
Quarter et al., (2017) has defined the social economy as-
“Social economy is a cluster of firms which can include foundations, associations, cooperation
and others. These organizations have similar features and values, which ensures that the
growth of each organization is being supported by one another. The social economy is
important as it helps in boosting innovation, providing employment and engaging people in
business activities.”
The role of start-ups in the development of economy is:
 Employment opportunities
They provide larger job opportunities and reduce the rate of unemployment within the UK. In
the UK, SME provided employment to approximately 15.7 million people.

12
 Innovation
The innovative growth is supported by small organizations as they provide new technologies
and ideas within the market. This helps in ensuring that the market remains competitive (Roh,
2016).
 Employee engagement
The start-ups engage a huge number of people including people from disadvantaged groups for
accomplishing the business activities.
 Fulfilling social purpose
The government of UK grants a huge amount of loans and funds for the start-ups. The lending
procedure is facilitated by the cooperation of the government with the financial institutions and
banks (Roh, 2016).