Entrepreneurship and Small Business Management: Economic Analysis
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This report assesses the impact of small businesses on the economy, focusing on the United Kingdom. It interprets data and statistics to illustrate how micro and small businesses affect the economy, emphasizing their importance and startups in the social economy's growth. The report evaluates the differences between small, medium, and large businesses, examining their impact at local, regional, national, and international levels. It also determines the key aspects of an entrepreneurial mindset, highlighting the traits and skills of successful entrepreneurs, and analyzes how background and experience can either hinder or foster entrepreneurship. The report concludes that SMEs have increased due to globalization, providing opportunities for independent businesses, particularly in the retail and construction industries, with London serving as a hub for SMEs, and EU countries receiving support for SME development.
ENTREPRENEURSHIP AND SMALL
BUSINESS MANAGEMENT
0
BUSINESS MANAGEMENT
0
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Table of Contents
Task 1...............................................................................................................................................2
Task 2...............................................................................................................................................3
Executive summary......................................................................................................................... 3
Introduction......................................................................................................................................4
LO2 Assess the impact of small businesses on the economy..........................................................4
P3 Interpret and assess relevant data and statistics to illustrate how micro and small businesses
impact on the economy................................................................................................................ 4
P4 Explain the importance of small businesses and business start-ups to the growth of the
social economy............................................................................................................................5
M2 Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics........................................................................................ 6
D2 Critically examine how small businesses have an impact on different levels of the
economy (local, regional, national) and in an international context........................................7
Conclusion....................................................................................................................................... 8
Task 3...............................................................................................................................................9
Introduction......................................................................................................................................9
LO3 Determine and assess the key aspects of an entrepreneurial mindset.....................................9
P5 Determine the characteristic traits and skills of successful entrepreneurs that differentiate
them from other business managers............................................................................................9
P6 Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation
and mindset................................................................................................................................ 10
M3 Explore and examine different lines of argument relating to entrepreneurial
characteristics........................................................................................................................ 10
D3 Analyse the characteristic traits, skills and motivational drivers of successful
entrepreneurs, supported by specific examples.....................................................................11
LO4 Examine the different environments that foster or hinder entrepreneurship.........................12
1
Task 1...............................................................................................................................................2
Task 2...............................................................................................................................................3
Executive summary......................................................................................................................... 3
Introduction......................................................................................................................................4
LO2 Assess the impact of small businesses on the economy..........................................................4
P3 Interpret and assess relevant data and statistics to illustrate how micro and small businesses
impact on the economy................................................................................................................ 4
P4 Explain the importance of small businesses and business start-ups to the growth of the
social economy............................................................................................................................5
M2 Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics........................................................................................ 6
D2 Critically examine how small businesses have an impact on different levels of the
economy (local, regional, national) and in an international context........................................7
Conclusion....................................................................................................................................... 8
Task 3...............................................................................................................................................9
Introduction......................................................................................................................................9
LO3 Determine and assess the key aspects of an entrepreneurial mindset.....................................9
P5 Determine the characteristic traits and skills of successful entrepreneurs that differentiate
them from other business managers............................................................................................9
P6 Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation
and mindset................................................................................................................................ 10
M3 Explore and examine different lines of argument relating to entrepreneurial
characteristics........................................................................................................................ 10
D3 Analyse the characteristic traits, skills and motivational drivers of successful
entrepreneurs, supported by specific examples.....................................................................11
LO4 Examine the different environments that foster or hinder entrepreneurship.........................12
1
P7 Examine, using relevant examples, how background and experience can hinder or foster
entrepreneurship........................................................................................................................ 12
M4 Analyse the link between entrepreneurial characteristics and the influence of personal
background and experience to specific successful entrepreneurs..........................................12
D4 Critically evaluate how background and experience influences entrepreneurs, both
positively and negatively, by comparing and contrasting examples.....................................13
Conclusion..................................................................................................................................... 13
Reference....................................................................................................................................... 14
2
entrepreneurship........................................................................................................................ 12
M4 Analyse the link between entrepreneurial characteristics and the influence of personal
background and experience to specific successful entrepreneurs..........................................12
D4 Critically evaluate how background and experience influences entrepreneurs, both
positively and negatively, by comparing and contrasting examples.....................................13
Conclusion..................................................................................................................................... 13
Reference....................................................................................................................................... 14
2
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Task 1
REFER TO PPT
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REFER TO PPT
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Task 2
Executive summary
Small and micro businesses are witnessed to enhance the economic performances of a specific
country. Considering the United Kingdom, it is seen that the country has experienced numerous
growth of SMEs within the last few years. London has observed significant rise of SMEs and
thus, employment has risen enormously.
The small businesses are focused in providing quality services to their customers so that
customer loyalty is maintained on one hand, and revenue flow is maximized on the other hand.
Not only the UK, but also several EU countries have experienced the rise of SMEs to provide
numerous financial gains to the country. It is evident from this report that most of the markets are
occupied by the SMEs that generates high employment rate in the country.
4
Executive summary
Small and micro businesses are witnessed to enhance the economic performances of a specific
country. Considering the United Kingdom, it is seen that the country has experienced numerous
growth of SMEs within the last few years. London has observed significant rise of SMEs and
thus, employment has risen enormously.
The small businesses are focused in providing quality services to their customers so that
customer loyalty is maintained on one hand, and revenue flow is maximized on the other hand.
Not only the UK, but also several EU countries have experienced the rise of SMEs to provide
numerous financial gains to the country. It is evident from this report that most of the markets are
occupied by the SMEs that generates high employment rate in the country.
4
Introduction
Small businesses have a significant impact on the economic growth of the United Kingdom. The
report will outline the importance of micro and small businesses on the financial structure of the
country. Additionally, the significance of small entrepreneurs in the betterment of the society
mainly refers to the increased employment generated by them. The creative minds are setting up
their own business whether related to retailing or construction, but are providing numerous job
opportunities to the unemp0loymeed groups of the society. In order to show the impact of small
and micro business firms on the GDP of the United Kingdom, a comparison is drawn between
the between different regions of the UK to get a clear view about its importance.
LO2 Assess the impact of small businesses on the economy
P3 Interpret and assess relevant data and statistics to illustrate how micro and small
businesses impact on the economy.
Julien (2018) revealed that small and micro businesses have a significant influence on the
financial status of the United Kingdom. The small businesses that have a potential impact on the
economy of the United Kingdom can be categorized into four major divisions. They are:
Non-innovating venture
Innovating venture
Non-exporting venture
Exporting venture
The figure explains the rapid evolution of small businesses in this globalization era. This has
uplifted the economy of the United Kingdom. The manufacturing industries are leading the graph
and Flynn et al. (2015) estimated it to be around 33% of the total market share. This is followed
by scientific and professional sector that determines the preferences of the small business
organizations towards innovation. The total market occupied by these companies account for
about 15% of the total start-up organizations. Moreover, Barkhatov et al. (2016) suggested that
rapid evolution of such business has led to enormous revenue for the country and held more than
98.9% of the total trade rate. This increases the GDP of the nation. Additionally, the coherent
turnover of micro and small businesses was estimated to be around £3 trillion for the year 2018,
5
Small businesses have a significant impact on the economic growth of the United Kingdom. The
report will outline the importance of micro and small businesses on the financial structure of the
country. Additionally, the significance of small entrepreneurs in the betterment of the society
mainly refers to the increased employment generated by them. The creative minds are setting up
their own business whether related to retailing or construction, but are providing numerous job
opportunities to the unemp0loymeed groups of the society. In order to show the impact of small
and micro business firms on the GDP of the United Kingdom, a comparison is drawn between
the between different regions of the UK to get a clear view about its importance.
LO2 Assess the impact of small businesses on the economy
P3 Interpret and assess relevant data and statistics to illustrate how micro and small
businesses impact on the economy.
Julien (2018) revealed that small and micro businesses have a significant influence on the
financial status of the United Kingdom. The small businesses that have a potential impact on the
economy of the United Kingdom can be categorized into four major divisions. They are:
Non-innovating venture
Innovating venture
Non-exporting venture
Exporting venture
The figure explains the rapid evolution of small businesses in this globalization era. This has
uplifted the economy of the United Kingdom. The manufacturing industries are leading the graph
and Flynn et al. (2015) estimated it to be around 33% of the total market share. This is followed
by scientific and professional sector that determines the preferences of the small business
organizations towards innovation. The total market occupied by these companies account for
about 15% of the total start-up organizations. Moreover, Barkhatov et al. (2016) suggested that
rapid evolution of such business has led to enormous revenue for the country and held more than
98.9% of the total trade rate. This increases the GDP of the nation. Additionally, the coherent
turnover of micro and small businesses was estimated to be around £3 trillion for the year 2018,
5
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which can be denoted as over 53.2% of total private sector turnover. Furthermore, the turnover
rate for small businesses in the UK is calculated to be around 35.7% and is thus, considered to be
the highest employment sector in the global competitive market.
Figure 1: Evolution of SMES in the United Kingdom
(Source- Merchant Savvy, 2019)
P4 Explain the importance of small businesses and business start-ups to the growth of the
social economy.
The start-up ventures and small businesses play an important role in enhancing the social
economy of the United Kingdom. Reynolds (2016) suggested that micro and small businesses are
mainly focused to gain competitive advantages in the market that can be brought through the
introduction of innovation in the business operations. The organizational performances can be
enhanced when the customers are satisfied by responding to their principle needs. This will be in
favor of the organizational success when the customers are benefitted from the company’s
customer-centric actions.
In comparison to this, Hogan et al. (2017) stated that the micro and small businesses in the UK
have a major benefaction related to generating scope for employment. It is evident from the
graph that more than 16.8 million employment scopes have been generated by micro and small
6
rate for small businesses in the UK is calculated to be around 35.7% and is thus, considered to be
the highest employment sector in the global competitive market.
Figure 1: Evolution of SMES in the United Kingdom
(Source- Merchant Savvy, 2019)
P4 Explain the importance of small businesses and business start-ups to the growth of the
social economy.
The start-up ventures and small businesses play an important role in enhancing the social
economy of the United Kingdom. Reynolds (2016) suggested that micro and small businesses are
mainly focused to gain competitive advantages in the market that can be brought through the
introduction of innovation in the business operations. The organizational performances can be
enhanced when the customers are satisfied by responding to their principle needs. This will be in
favor of the organizational success when the customers are benefitted from the company’s
customer-centric actions.
In comparison to this, Hogan et al. (2017) stated that the micro and small businesses in the UK
have a major benefaction related to generating scope for employment. It is evident from the
graph that more than 16.8 million employment scopes have been generated by micro and small
6
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businesses in United Kingdom that accounts for more than 50% of the total private sector hiring.
According to the graph, the micro or small business has contributed to stabilize more than 28,000
employment scopes in Birmingham as the growth rate began from 2008. The value added of
SMEs is significantly high, as their establishment in the era of globalization has provided
numerous employment opportunities to the unemployed youth of the country.
Figure 2: SME performance in the United Kingdom
(Source- Binnenmarkt, Industrie, Unternehmertum und KMU - European Commission, 2019)
M2 Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics.
Although there lay significant differences among the micro and macro businesses, the most
important one is the job opportunities provided to the unemployed sectors of the community. It is
evident that more than 80,000 new job opportunities are provided in the year 2014 in London as
the expansion rate of small businesses exceeded 43%. Moreover, Mitra (2015) suggested that
additional job opportunities accounting about 27,000 would rise by 2021 providing excellent job
openings in London, Leeds, Birmingham and many others. This will help to contribute more than
7
According to the graph, the micro or small business has contributed to stabilize more than 28,000
employment scopes in Birmingham as the growth rate began from 2008. The value added of
SMEs is significantly high, as their establishment in the era of globalization has provided
numerous employment opportunities to the unemployed youth of the country.
Figure 2: SME performance in the United Kingdom
(Source- Binnenmarkt, Industrie, Unternehmertum und KMU - European Commission, 2019)
M2 Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics.
Although there lay significant differences among the micro and macro businesses, the most
important one is the job opportunities provided to the unemployed sectors of the community. It is
evident that more than 80,000 new job opportunities are provided in the year 2014 in London as
the expansion rate of small businesses exceeded 43%. Moreover, Mitra (2015) suggested that
additional job opportunities accounting about 27,000 would rise by 2021 providing excellent job
openings in London, Leeds, Birmingham and many others. This will help to contribute more than
7
£1.5 billion to the United Kingdom economy. It is also observed that micro businesses take
significant corporate steps so that organizational success is achieved in an efficient manner.
Some organizations also provide basic literacy help to the economically backward people so that
they can earn reputation in the market as a social entrepreneur. The existence of micro
enterprises in the UK is more than the large-scale industries that dominate the revenue stream of
the country. The contribution of job opportunities is more than 96% in almost every sector of the
country and thus, the profit obtained is enormous. Beside the hike in employment rate, the
relationship with the supplier chain is maintained by the micro businesses in an efficient manner.
The impact of Brexit on small businesses has intensified over the past few years. It is evident
from the small-scale business firms of England and Wales, Brexit has a significant impact on
their business activities (Guerrero et al., 2015). The ramifications are considerably wide-ranging
and detrimental with respect to export plans and future investments.
In context of the UK retail sector, suggested that small-scale business retailers have the
competency to penetrate the international market in an efficient manner. However, the only
concern is related to the expansion of the business with accurate strategy. It is recommended that
the UK retail sector must adopt government-exporting schemes so that managers of the micro-
businesses gain adequate knowledge to maintain the business operations.
The construction industry in the United Kingdom accounts for more than 20% of the total SMEs.
London is mostly over-populated with housing constructions that accounts more than 54,000
SMEs. This is followed by South East regions of the UK that contributes more than 15.2%
(244,655) of the SMEs in the UK, whereas the North West region is home to 11% (189,745) of
the overall SMEs in the UK (Storey, 2016). The least number of construction SMEs exist in
Northern Ireland, North East regions and Wales. The dominating SMEs in the UK include motor
vehicles repairing, wholesale of retail trade, education, food services and accommodation.
More than 24 million SMEs in the EU represent more than 98% of the businesses and they are
the crucial factor for driving innovation, economic growth and social integration (Rodríguez-
Pose and Hardy, 2015). Belgium and Finland are showing extreme growth in setting up micro
businesses and thus providing huge job opportunities to the people.
8
significant corporate steps so that organizational success is achieved in an efficient manner.
Some organizations also provide basic literacy help to the economically backward people so that
they can earn reputation in the market as a social entrepreneur. The existence of micro
enterprises in the UK is more than the large-scale industries that dominate the revenue stream of
the country. The contribution of job opportunities is more than 96% in almost every sector of the
country and thus, the profit obtained is enormous. Beside the hike in employment rate, the
relationship with the supplier chain is maintained by the micro businesses in an efficient manner.
The impact of Brexit on small businesses has intensified over the past few years. It is evident
from the small-scale business firms of England and Wales, Brexit has a significant impact on
their business activities (Guerrero et al., 2015). The ramifications are considerably wide-ranging
and detrimental with respect to export plans and future investments.
In context of the UK retail sector, suggested that small-scale business retailers have the
competency to penetrate the international market in an efficient manner. However, the only
concern is related to the expansion of the business with accurate strategy. It is recommended that
the UK retail sector must adopt government-exporting schemes so that managers of the micro-
businesses gain adequate knowledge to maintain the business operations.
The construction industry in the United Kingdom accounts for more than 20% of the total SMEs.
London is mostly over-populated with housing constructions that accounts more than 54,000
SMEs. This is followed by South East regions of the UK that contributes more than 15.2%
(244,655) of the SMEs in the UK, whereas the North West region is home to 11% (189,745) of
the overall SMEs in the UK (Storey, 2016). The least number of construction SMEs exist in
Northern Ireland, North East regions and Wales. The dominating SMEs in the UK include motor
vehicles repairing, wholesale of retail trade, education, food services and accommodation.
More than 24 million SMEs in the EU represent more than 98% of the businesses and they are
the crucial factor for driving innovation, economic growth and social integration (Rodríguez-
Pose and Hardy, 2015). Belgium and Finland are showing extreme growth in setting up micro
businesses and thus providing huge job opportunities to the people.
8
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The European Commission has a mission to promote successful entrepreneurship events and
enhance the business environment for SMEs. This allows the business owners to recognize their
competencies to maintain a new business in the global competitive market.
Conclusion
It is evident from the report that SMEs have increased over the last few years because of
globalization. The United Kingdom has provided numerous opportunities to creative minds to
start their independent business and gain the fame of an established entrepreneur. The retailers as
well as construction industry have witnessed immense rise of SMEs to take the business forward
to international markets. London is observed to be the hub of SMEs and thus, provides multiple
job opportunities to the unemployed section of the community. In comparison this, EU countries
such as Belgium and Finland are getting immense support from the European government so that
they can recruit massive workforce for the SME’s betterment.
9
enhance the business environment for SMEs. This allows the business owners to recognize their
competencies to maintain a new business in the global competitive market.
Conclusion
It is evident from the report that SMEs have increased over the last few years because of
globalization. The United Kingdom has provided numerous opportunities to creative minds to
start their independent business and gain the fame of an established entrepreneur. The retailers as
well as construction industry have witnessed immense rise of SMEs to take the business forward
to international markets. London is observed to be the hub of SMEs and thus, provides multiple
job opportunities to the unemployed section of the community. In comparison this, EU countries
such as Belgium and Finland are getting immense support from the European government so that
they can recruit massive workforce for the SME’s betterment.
9
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Task 3
Introduction
The entrepreneurial mindset holds numerous qualities of both leaders as well as managers. Their
entrepreneurial personality traits decide what competencies they hold for a successful business
operation. Croft-Simon is a successful entrepreneur who has generated Nom Foods, which is the
first organic food in the UK market. She faced many hurdles while developing such an
innovative product, but her personal experience and family background have helped her to
succeed in it. Thus, the essay highlights the importance of innovative mindset that can provide
numerous business options for an entrepreneur.
LO3 Determine and assess the key aspects of an entrepreneurial mindset
P5 Determine the characteristic traits and skills of successful entrepreneurs that
differentiate them from other business managers.
A manager holds certain qualities of the leaders to maintain an efficient working environment.
The managers are given special responsibilities to oversee the work of the staffs within a
particular department so that efficient qualities of the employees are identified (Yashkova et al.,
2016). They assign unique responsibilities to their employees, set deadline for their activities and
troubleshoot any problem the employees face. Although the managers are given special task to
help the juniors but they are also answerable to different problems to their higher authorities.
On the other hand, Bikse et al. (2015) opined that entrepreneurs are individuals who are capable
to identify the problems of their followers so that efficient solutions are provided to the public.
The entrepreneurs have the capability to create an innovative idea, generate advanced products
that are consumer-friendly, formulate their sales, marketing strategies, and many others so that
effective solution is provided to the customers. Although several risks are associated with a start-
up, the entrepreneurs are inclined to set up their business in a competitive environment.
10
Introduction
The entrepreneurial mindset holds numerous qualities of both leaders as well as managers. Their
entrepreneurial personality traits decide what competencies they hold for a successful business
operation. Croft-Simon is a successful entrepreneur who has generated Nom Foods, which is the
first organic food in the UK market. She faced many hurdles while developing such an
innovative product, but her personal experience and family background have helped her to
succeed in it. Thus, the essay highlights the importance of innovative mindset that can provide
numerous business options for an entrepreneur.
LO3 Determine and assess the key aspects of an entrepreneurial mindset
P5 Determine the characteristic traits and skills of successful entrepreneurs that
differentiate them from other business managers.
A manager holds certain qualities of the leaders to maintain an efficient working environment.
The managers are given special responsibilities to oversee the work of the staffs within a
particular department so that efficient qualities of the employees are identified (Yashkova et al.,
2016). They assign unique responsibilities to their employees, set deadline for their activities and
troubleshoot any problem the employees face. Although the managers are given special task to
help the juniors but they are also answerable to different problems to their higher authorities.
On the other hand, Bikse et al. (2015) opined that entrepreneurs are individuals who are capable
to identify the problems of their followers so that efficient solutions are provided to the public.
The entrepreneurs have the capability to create an innovative idea, generate advanced products
that are consumer-friendly, formulate their sales, marketing strategies, and many others so that
effective solution is provided to the customers. Although several risks are associated with a start-
up, the entrepreneurs are inclined to set up their business in a competitive environment.
10
P6 Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation
and mindset.
The Big-5 Model is used to analyze the personality traits of the entrepreneurs (Azucar et al.,
2018). The five factors responsible to evaluate the personality of the businessperson aim to
provide a clear view of their success story. The five factorials related to the personality traits are
Openness
Conscientiousness
Extraversion
Agreeableness
Neuroticism
The business success of Nom Popcorn was possible because of the hard work Steph Croft-
Simon. Thus, it can be said that she possess enough openness or rather deep insight for
developing a particular product (Nomnomsworldfood.com, 2019). It is said that the person
having this trait have a wide range of imaginative power and they are eager to learn new things.
Croft-Simon suffered from high allergic reactions, so she started to experiment with foods to
mitigate this problem. Thus, it can be said that she has a wide range of goal-directed behavior
and she can be related to the second aspect of the model, which is conscientiousness. Croft-
Simon was an extrovert person so she interacted with numerous people who possess cooking
interests so that she can develop efficient solution for the allergic responses (Nom Foods, 2019).
She is cooperative and thus responded to multiple advices of unknown persons regarding her
experiment. Thus, her personality aligns with the fourth trait of the model, which is
agreeableness. Moreover, she also possess neuroticism trait that defines her to be emotional and
moody. Croft-Simon was tired of her allergic reactions so she became emotional and desperate to
overcome it.
M3 Explore and examine different lines of argument relating to entrepreneurial
characteristics.
Maslow’s Hierarchy of Needs classifies five aspects of entrepreneur behavior. These include
self-actualization, esteem, belonging, safety and physiological needs. It is evident that small
and micro business adopts Maslow’s Pyramid so that they can monitor every aspect of the
business operations to gain organizational success (Lee and Hanna, 2015). The entrepreneurs are
11
and mindset.
The Big-5 Model is used to analyze the personality traits of the entrepreneurs (Azucar et al.,
2018). The five factors responsible to evaluate the personality of the businessperson aim to
provide a clear view of their success story. The five factorials related to the personality traits are
Openness
Conscientiousness
Extraversion
Agreeableness
Neuroticism
The business success of Nom Popcorn was possible because of the hard work Steph Croft-
Simon. Thus, it can be said that she possess enough openness or rather deep insight for
developing a particular product (Nomnomsworldfood.com, 2019). It is said that the person
having this trait have a wide range of imaginative power and they are eager to learn new things.
Croft-Simon suffered from high allergic reactions, so she started to experiment with foods to
mitigate this problem. Thus, it can be said that she has a wide range of goal-directed behavior
and she can be related to the second aspect of the model, which is conscientiousness. Croft-
Simon was an extrovert person so she interacted with numerous people who possess cooking
interests so that she can develop efficient solution for the allergic responses (Nom Foods, 2019).
She is cooperative and thus responded to multiple advices of unknown persons regarding her
experiment. Thus, her personality aligns with the fourth trait of the model, which is
agreeableness. Moreover, she also possess neuroticism trait that defines her to be emotional and
moody. Croft-Simon was tired of her allergic reactions so she became emotional and desperate to
overcome it.
M3 Explore and examine different lines of argument relating to entrepreneurial
characteristics.
Maslow’s Hierarchy of Needs classifies five aspects of entrepreneur behavior. These include
self-actualization, esteem, belonging, safety and physiological needs. It is evident that small
and micro business adopts Maslow’s Pyramid so that they can monitor every aspect of the
business operations to gain organizational success (Lee and Hanna, 2015). The entrepreneurs are
11
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