Entrepreneurship and Small Business Impact on UK Economy: A Report

This report provides a comprehensive analysis of entrepreneurship and small business management, focusing on the UK economy. It examines the scope, development, and growth of entrepreneurship ventures, including their typology (small, micro, medium, and large) and the differences and similarities between them. The report explores the impact of micro and small businesses on the UK economy, presenting statistical data on employment, revenue generation, and contribution to GDP. It also highlights the importance of small businesses and start-ups to the growth of the social economy. The report further touches upon the role of government investment, factors affecting the success and failure of small businesses, and their impact on society. The study includes examples of ventures from the Borough of Barking and Dagenham in East London, illustrating various types of entrepreneurship such as private, academic, social, public sector, corporate, family, and women entrepreneurship.

Entrepreneurship and small
business management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................8
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Entrepreneurs are back bone of every developing and developed economy. Present study is a
research of different organisations from council Barking and Dagenham based in East London.
This report will include study about the scope, development and growth of entrepreneurship and
impact of micro and small businesses on the economy of UK. Further it presents the personality
of three successful entrepreneurs of United Kingdom (UK), David and Simon Reuben, Richard
Branson and Laurence Graff. This report will demonstrate the importance of small businesses
and start-ups to the growth of social economy. Furthermore, study will highlight different
ventures and their typology and will describe difference and similarities of these ventures.
TASK 1
Executive summary
The following report will be based on Borough of Barking and Dagenham which is
based in East London. It is an Outer London borough and the south is within the London
Riverside section of the Thames Gateway, an area designated for urban regeneration. The report
will critically examine different organisations from the Borough according to its scope,
development and the growth. Secondly it will examine the impact of the small businesses to the
Barking and Dagenham Borough economy by presenting data and statistic regarding the growth
of the social economy.
Introduction
There are various kinds of entrepreneur ventures and all these ventures work for different
purposes. The task will include scope and development and will explain differences and
similarities between these companies. Small businesses have a good place in the economy and
their existence is very important for the development of economy and it also creates
entrepreneurs in the economy (Alford and Page, 2015). Present task will explain impact of small
businesses on UK economy.
Scope, development and growth of entrepreneurship ventures and their typology
Entrepreneurship is a set of actions like designing, inventing, starting a new business in
order to generate profit. It is a process of discovering new ways of combining resources to solve
the problems in the society and also to create value.
Entrepreneurs are the persons who start a new business with limited planning and
resources and are responsible for all the risk and rewards of their business venture. These
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individuals are seen like innovators, a source of new ideas, products, services that a society needs
and for this they do research before making first step. They are their own boss, usually sole
proprietor, partner or who owns the majority of shares in an incorporated venture.
Intrapreneurs are employees who manage the business but entrepreneurs are owner of
the company, they lead the company (Bishop, Mehra and Partee, 2016). Intrapreneurs do not
face the risks and rewards of the company directly but they still have access to the resources of
the company. They work on a project trying to improve the performance of an existing company
and as soon as they developed the skills to solve the important problems that can occur in the
company they may turn into entrepreneurs.
The entrepreneurial ventures are classified in: small, micro, medium, large.
Small ventures: This type of venture is a small company which is independently owned
and operated with a small number of employees less than 50 and the annual turnover does not
exceed €10 million .It starts up with the scope to gain profit for all the persons involved. An
example of a small enterprise from Barking and Dagenham Borough is Tiger Security Solutions
which provide a range of security systems for homes or offices.
Medium ventures are those organisations with less than 250 employees and the turnover
does not exceed €50 million. An example from the borough is: Abbey centre leisure which
provides activities for everyone’s interested in sport.
Micro ventures: In this type of enterprise the number of employees is no more than 10
with a turnover of less than € 2 million per year. Example could be Britannia Pharmacy in
Barking Riverside which offers the people a range of products for the health.
Large ventures are similar to corporate with a number of 5000 employees having a
annual turnover of 1.5 billion. Example is Sainsbury’s which is a British retail store and its
scope is to provide and sell services and products in order to generate profit.
There are different types of entrepreneurship:
Private entrepreneurship .These is such businesses units which work for the profit
maximization. Purpose of private companies is to expand their business and to satisfy their
stakeholders. This helps the firms to remain competitive in the market. Barking LLC is a private
venture.
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Academic entrepreneurship: These are such businesses that work for research and
development. Such companies always try to improve knowledge of others so that people can
perform better in the organisation. It is the platform where industry partners coordinate with
these ventures in order to get more funding. Barking and Dagenham College is the great example
of academic venture where students conduct research on new technologies.
Social entrepreneurship: It is a way of conducting business which focuses on making a
world better place. Generally, business solves global issues and followed by social enterprise
(Giaoutzi, Storey and Nijkamp, 2016). These firms work for social welfare. 4BETTEH Ltd is the
example of social venture. It is continuously working for community betterment.
Public sector entrepreneurship: Are those firms set up by national and local authorities.
It supports entrepreneurs to start business on their own through developed networks. It promotes
economic growth and collaboration. For e.g. London Borough of Barking and Dagenham is a
public sector bank build by local and national authorities (Burns, 2016) which offers different
services to the people from the borough .
Corporate entrepreneurship: This type of venture is a large company which has a legal
identity with its own privileges and liabilities. It is governed by a body of people which spend a
lot of money to develop and marketing a particular log .Foe example the big companies: Mark
and Spencer, Asda, Tesco, etc.
Family entrepreneurship is an organisation composed of family members whose
financial objectives are common. It is controlled fully by the family members and it is
transmitted from generation to generation. It is well known that Turkish people are very good
merchants, therefore a good example is the store Way to Save from Barking which delivers
Turkish food and drinks but also international goods.
Women entrepreneurship called also a Women Owned Business Enterprise (WBE) is
operated more than 50% by one or more females. If a male entrepreneur starts a business more
for profits, a female entrepreneur starts a business in order to meet personal goals rather than
financial part. Example of a WBS in Barking and Dagenham is Basic Beauty Ltd, a beauty salon
which delivers beauty treatments for women and not only.
Differences and similarities of ventures considering the role, objectives, structure size
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Similarities between all the ventures are to earn profit for long period. All the entrepreneurs are
strong-willed and hard working. All the entrepreneurs have creative ideas for which they want
funding, funding is done by some venture capitalist, banks, angel investors etc. all of them want
to create its own brand name and sustain against large business by regularly innovating process
and products. They invest in technologies as much as possible to make their product highly
technological. They are also known as change agents, they have potential to enter in new markets
or create change in existing market. Private firms and public firms have similarities in term of
satisfying their consumers, they both want retaining their consumers hence offer them quality
products. Both these companies contribute in raising employment opportunities in the country.
Differences between different ventures are stated in the table below:
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Criteria Public venture
(Barclays bank)
Private venture
(Barking LLC)
Social venture
(4BETTEH Ltd)
Role of venture These are such entities
which are rules by
government and board
of directors take all the
decisions on behalf of
stakeholders. These
ventures play the role of
developer; they
continuously work for
developing
infrastructure.
Private companies are
owned by individual or
partners. These play the
role of economic
developer; these entities
generate profit which
helps in improving
economic condition of
nation.
These social enterprises
work as social workers and
continuously work for
improving wellbeing of
community members.
Objectives The main objective of
Barclays bank is to
provide satisfactory and
trust worthy services to
consumers so that they
maintain their
relationship with bank.
The objective of Barking
LLC is to expand business
globally and become the
market leader in this
industry.
Objective of 4BETTEH Ltd
is to improve wellbeing of
community members.
Structure It follows tall structure
and all the decisions are
taken by higher
authorities.
It has flat structure where
company involves people
in decision making process
so that they can make
effective judgement for the
growth of firm.
It has matrix structure which
help social enterprise in
analysing decisions and
implementing it carefully.
Market Size In the year 2018 bank
has generated revenue
of 21.136 billion. It has
employed approx.
It is big size firm which
has employed around
56000 employees. It is
operating its business in
4BETTEH Ltd is running
from more than 9 years.
Total assets of business are
around 12Pound.

Impacts of micro and small-business-on the economy of UK
There are many small businesses in Barking and Dagenham; all these firms are
contributing in raising employment opportunities for local population. Over a period of time
these firms have generated 5% revenues in the local economy. In 2018 statistic data was showing
a number of 6150 microenterprises in Barking and Dagenham Borough with 0-9 employees ,400
small enterprises with 10-49 employees , 65 medium enterprises with 50-249 employees and 10
large enterprises with more than 250 employees . The number of local units are for micro (0-9) -
6880, for small (10-49) -730, medium ( 50-249) -165, and large (250)- 15, totalising 7785 units .
Impact on national economy:
In the UK there are 5.6 million small businesses at beginning of 2018 with less than 250
employees (Lamine and et.al., 2018). This is increase by the 12% of the growth rate as compare
to previous year. It has provided job around 16.3 million people of UK and it increases +0.5%
compare to the previous year. It contributes a big part of the UK economy development. Small
businesses had turnover of 2.0 trillion of euro in 2018 and it created a high impact on the growth
of Gross Domestic Product (GDP). Small businesses are also whopping 52% of the all private
sectors. 75% of small businesses have non-employing businesses which have no employ aside
from the owner. Non-employing business are falling by 1% and the employing business increase
by 2% from the last couple of year in UK. Small businesses play the main role of the growth of
UK economy. Basically in all main sectors in UK there are small businesses take over (UK Small
Business Statistics, 2018).
In the manufacturing industry was a 32% growth of small businesses in last 2 years and it
is growing fast compare to the other industries. Professional and scientific industry 14% has own
by the small businesses. Retail industry has 19% works as the small business (Na, 2016). The
highest volume of small businesses is in the personal services like beauty and wellness,
professional services like financial and the counselling. UK's economy depends on the small
business and it impacts on the small business growth. UK government also is investing 725
million pounds in the small industry, development and research to improve the industry's growth
and strategy. This procedure will help the small businesses to grow fast. UK's economy totally
dependents on the private sectors and small businesses play the big roll on it.
Small businesses directly impact on UK economy with its coverage of 60% of all private
sectors’ employment. All growth of the UK dependents on the small businesses and according to
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report, 50% small businesses expands their business over the year (Ojasalo and Ojasalo, 2016).
This happened in southern England more than elsewhere in UK. In the past 2 years the number
of employing companies increases by 23,000 and non-employing companies’ decreases by
50,000 and the overall decrement of 27,000 in the small businesses.
The major reason of failure of small businesses is that these enterprises have lack of
financial resources, poor cash management. That is why they fail to develop their products and
improve their existing practices. Apart from this, small firms have lack of experiences as they are
new in the market or just started their business, lack of strategic planning, hence this thing
become the major cause of their failure. In addition, these start up enterprises face huge
competition in the market which is also the reason of failure of such firms in the market. Another
reason of failure is if the business has a poor management , poor qualities and of course poor
feedback from the customers.
These small firms impact negative on society as well because many times these entities
fail to generate revenues; in such condition they terminate the workers. Apart from this, they
give fewer salaries to their workers which are not sufficient for spending a good life.
Importance of small business and start-ups to the growth of social economy
Social economy is that branch of economy which shows study of human behaviour and
social aspects of economy. It examines that how ethics, social norms, emerging public
sentiments and other aspects that influences the consumer behaviour and buying decisions. It is
also referred as socio-economics (Peris-Ortiz and Ferreira, 2017).
Importance of small-business and start-ups:
Small businesses work as booster to the country’s economy and help to fast growth of
economy. And also small businesses are backbone of United Kingdom.
Creation of employment:- Growth of small businesses help to create employment as the
starting of new business helps to create more vacancies and new job opportunities for the public
and its help to reduce unemployment rate and help to increase living standard of employees. In
UK small businesses employed over 16.3 million peoples.
Innovation: - Small businesses are highly positioned to introduce new ideas and
innovative product. And also able to develop the ideas (Risin and et.al., 2017).
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Turnover: - This is the most important aspect of small businesses, they are highly
motivated to generate high turnover with the skills and proper management of resources. It
contributes to the national economy and helps grow its economy. In the year of 2018
contribution of these businesses to economy was around 2 trillion pounds.
Developing personal relationships: - Small businesses are well place to make
relationship with customers, suppliers and employees. It contacts directly person to person which
very necessary to build relationships and a good social environment.
Meeting social purpose: - In current years corporate social responsibility is increased as
of emerging in new businesses. It tries to remove poverty and create education.
Local improvement:- Through the small businesses sources of Income generation is
increased. It also helps to improve education level and living standard of local public and
develops the backward areas by giving education and facilities (Alford and Page, 2015).
Growth: - Small-businesses are growing rapidly now which increase to the national GDP
and aid in countries growth.
TASK 2
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