Exploring the UK Economy's Reliance on Micro and Small Businesses

Desklib provides past papers and solved assignments for students. This report analyzes entrepreneurship and small business management in the UK.

ENTERPRENUERSHIP AND SMALL
BUSINESS MANAGEMENT

Table of Contents
PART-1......................................................................................................................................................3
INTRODUCTION.......................................................................................................................3
TYPES OF ENTREPRENEURIAL VENTURES.......................................................................3
DIFFERENCE BETWEEN SERIAL ENTREPRENEURS, INTRAPRENEURS AND
OWNER MANAGER..................................................................................................................4
PUBLIC SECTORS AND CORPORATE SECTORS................................................................5
IMPACT OF MICRO AND SMALL BUSINESSES ON THE UK ECONOMY......................6
GROWTH AND DEVELOPMENT OF SOCIAL ECONOMY THROUGH START-UPS
AND SMALL BUSINESSES......................................................................................................7
IMPACT OF SMALL BUSINESSES ON DIFFERENT LEVELS OF THE ECONOMY........7
PART-2......................................................................................................................................................8
TRAITS AND SKILLS OF SUCCESSFUL ENTREPRENEUR...............................................8
DIFFERENT ENVIRONMENTS WHICH HINDERS AND FOSTER THE
ENTREPRENEURSHIP..............................................................................................................9
CONCLUSION.......................................................................................................................................10
REFERENCES........................................................................................................................................11

PART-1
INTRODUCTION
According to Howard Stevenson's entrepreneurship is a process where people chase
opportunities without considering the currently available resources. Which means desirability
and feasibility both are required for an individual to pursue the opportunity and generate
resources.
According to Hisrich, Peters, & Shepherd Entrepreneurship is a process where a person creates
different things that have values by allocating his or her important efforts and time for
accomplishing the desirability. To gain personal satisfaction, to recompense monetary by
achieving the result through taking a social, financial, psychological risk in order to accomplish
the goal.
Shane & Venkataraman defined entrepreneurship as intellectual inspection of how who, by
whom with what results of opportunities can help in developing future goods and services which
can assess and utilized for social value.
Entrepreneurship is a purposeful activity according to Cole where a person or a group of people
can initiate, maintain and can earn profit through productions and distribution of profitable goods
and services.
TYPES OF ENTREPRENEURIAL VENTURES
There are four types of entrepreneurial ventures-
1. SURVIVAL VENTURES- this venture provides the basic survival or livelihood to the
family of an entrepreneur. It just provides more than day to day type of reality. This kind
of business may not have proper premises, no relationship with the business banker,
hardly operates in cash or on the basis of barter system even they may not be registered.
Survival ventures provide the essential financial needs, there is no capacity to reinvest in
the venture after cost covered. This business is motivated by the push factor and it
basically has a high competitive environment in the market (Morris .M, 2016).
2. LIFESTYLE VENTURE- according to the management maintenance approach and
model of workable business this provides stable income to the owner. The firm is
implanted in a local market where moderate rehabilitations are needed to maintain
competitiveness. These ventures do not seek for expansionary growth as they have single
locations only, few employees and small premises. As these ventures have limited
capacity so they won’t be able to achieve the economies in operations.
3. MANAGED GROWTH VENTURE- these ventures are able to strongly develop
themselves as a brand in the local and regional market through a feasible business model
which make stability in business growth by launching new products into the market

(Morris .M, 2016). This venture develops its business through regular reinvestment and
regional growth at a moderate level.
4. AGGRESSIVE GROWTH VENTURE: these ventures are funded by the equity capital
which has strong innovations because of the extreme availability of technology that leads
to epidemic growth and enhances their ventures capabilities (Morris .M, 2016). They seek
to create a new market by focusing nationally and internationally. And they may be the
beginners for initial public offers or purchasers.
TYPOLOGY OF VENTURES-
These ventures constitute distinct types of entities instead of development stages. As some
ventures start from survival and transform themselves into a lifestyle, or some managed their
growth from lifestyle to aggressive. Some ventures start from the same and always remains
the same thus, they never change into another type of venture. Companies grow their
identities according to the attribute of categorized venture where they belong as a distinct
entity.
DIFFERENCE BETWEEN SERIAL ENTREPRENURS, INTRAPRENEURS AND
OWNER MANAGER
SERIAL
ENTREPRENEUR
INTRAPRENEUR OWNER
MANAGERS
Primary motives To create money they
seek independent
opportunity.
To get the corporate
rewards they seek for
advance independence
ability (Meyskens, et al.,
2010).
Their goal is to
promotions and power
in order to get the
reward in corporate
sectors.
Activity They have direct
involvement in all the
activities
They also have
involvement but more
than delegation.
They do not have
direct involvement as
they are more towards
delegation and
supervising.
Risks They are ordinary risk
takers.
They are partially risk
takers, they always try
to ignore the risky
projects and
concentrated towards
projects consisting
lower level of risk.
They totally avoid
risky projects and
more careful about
risk.
Relationship with
others
They have a
transactional
relationship with
others
They have
transactional
hierarchy relationship.
They have simply
hierarchical
relationship (Meyskens,
et al., 2010).
Operations It totally depends on They operate from the They basically

the size of the
business whether to
operate from inside or
outside.
organization. involved in functional
operations.
Decisions They mostly take
decisions which
follow the dream of
the firm (Meyskens, et
al., 2010).
They also follow the
dream but they make
other people agree to
help them in
achieving the
objective.
They usually agree to
the upper
management
decisions.
Failure and mistakes They positively and
efficiently deal with
the problems and a
mistake happens in
the firm.
They make
themselves ready
before attempting
risky projects.
They always try to
completely avoid and
ignore mistakes.
PUBLIC SECTORS AND CORPORATE SECTORS
The corporate sector is also known as the business sector which is normally called as a
business, these are various companies existed in the economy which basically executes the
manufacturing (Zulkiffli, et al., 2011). Stakeholders own the corporations; the profit and loss
generated through the firm operations is shared by the shareholders which are divided into three
attributes-
LEGAL EXISTENCE- the firm has legal existence, like a person it can buy or sell the shares, it
can come into contract, own, it can sue the firm or person and it can be sued by them also.
Business can be punished or commit a crime, it can be rewarded for good and penalized for the
bad.
LIMITED LIABILITY- the owner of the firm and firm itself are liable for the creditors and other
mandatory at the limited level to the resources of the firm, otherwise personal guarantees will be
given by owners of the firm (Zulkiffli, et al., 2011).
CONTINUITY OF EXISTENCE- a firm and the ownership of the firm can live for a longer
period of time as the owner can be transferred to other through sales or gift of shares.
The public sector is controlled by local, state or provincial and national government that is the
portion of an economic system (Bason, C., 2018). According to the United States, public sector
encircles the all-inclusive and critical services such as police protection, security for homelands,
national defence, taxations, corrections, urban planning, firefighting and various other social
programs.
These public sector organizations are formed in three different forms-
1. Departmental undertakings

2. Government companies
3. Public corporations or statutory corporations.
DEPARTMENTAL UNDERTAKINGS- it is the most aged form of public sector enterprises.
Departmental enterprises are examined as one of the government department. It does not have a
different existence than the government (Bason, C., 2018). All the functions of enterprises are
controlled and ministered by the ministry/department of government. Such as telephone services,
broadcasting, railways, telegraph and post, etc.
GOVERNMENT COMPANIES- government companies are those companies where state or
central government holds 51% of paid-up share capital in the company. Companies act, 2013
governed and rules the government companies such as Hindustan machine tools, steel authority
of India, state trading corporations, etc.
PUBLIC CORPORATION OR STATUTORY CORPORATION-this corporation or sector is
formed by the special act of central or state legislature or parliament (Bason, C., 2018). The public
corporation is completely capitalized by the government and all the limitations, objectives and
powers are also decided by the act of the legislature. For example commonwealth bank of
Australia, national airlines, Telstra, etc.
IMPACT OF MICRO AND SMALL BUSINESSES ON THE UK ECONOMY
Micro and small businesses act as a backbone of the UK economy. According to the department
for innovation business and skills of 2014 that 99% of businesses are belonged from micro and
small enterprises which are clearly shown in their figure. This has shown a major impact on the
economy of the UK.
According to the paper published in May 2015 that is House of Commons library considering the
majority of businesses are contributing to 33% of employment and 19% of turnover. Whereas
according to a forum of private business, SMEs business group that 15.2 million jobs are
provided by the small businesses and micro businesses are booming rapidly (with less than 10
employees). Overall 5 million businesses are there in the UK according to the report by the
Royal Society for the encouragement of arts, manufactures and commerce (Carree, et al., 2010).
And if we compare other seized business all have increased minimally and also deprived in
numbers. Now once the cottage industries are the norm in pre-industrial Britain and also this
trend is known as the second age of small (Economic and Social Research Council, 2016).
Small businesses have shown the relatively too large amount of growth in the UK. Small
business has shown the highest growth rate in generating new jobs in different industries in the
UK between 2002 and 2009. According to the organization for economic co-operation and
development Small businesses are growing at the rate of more than 20% which have more than
10 employees. A government can help small businesses to sustain and flourish by motivating and
encouraging them through the break in the taxes. A government can offer free advisory and
networking opportunities for the startup which will attract and help in employment and

innovation. Government policies can also help small business by getting out of the way of small
and micro businesses (Economic and Social Research Council, 2016).
GROWTH AND DEVELOPMENT OF SOCIAL ECONOMY THROUGH START-
UPS AND SMALL BUSINESSES
It is the social movement created by the start-ups. People who get fired from a job or didn't get a
job for some reason in earlier times, now they are running their own businesses. From the last 20
years, there is an increment in rates of entrepreneurship globally. There is rapid growth in small
businesses as they it is creating self-employment with innovative ideas and technologies such as
devices like smartphones and broadband has to make vogue between private life and work and
breathing space. It is very flexible during the work for the people who have parents and
dependents as it allows checking the emails at the time of work or enables at the weekend also
which is very useful for family (Carree, et al., 2010). On the other side, it can be very difficult for
many people to relax at working hours and generally it happens that people get so unwind that
they don't get time for the outside world. Because of new technologies, small business and
entrepreneurs has raised the popularity of home working. According to the research bring out by
the office of national statistics that In UK 2014 there were 4.2 million home workers who were
accessing their work successfully from home. From 4.2 million workers 2.7 million workers
were operating their work from but at different places and 1.5 million workers were operating
within their home. Small businesses helped in increasing the number of home workers by 1.3
million.
IMPACT OF SMALL BUSINESSES ON DIFFERENT LEVELS OF THE
ECONOMY
The impact of small businesses to all the levels of the economy is very critical as it provides
support to community, entrepreneurship and job creation. It might be possible that they are not
able to generate the revenue as other big organization can but they play an integral part in
enhancing the economy. Small businesses are the pillars for corporate giants that exist now days
so small business has a positive impact on the economy as well as society (Stevenson, et al.,
2007). Small businesses are the supporter of local communities as its roots are attached
emotionally in the business with friends and family who buy and sell their products.
IMPACT OF SMALL BUSINESS IN LOCAL ECONOMY
1. Transforms the climatic changes
2. Employing local workers
3. Growing small businesses in big corporations
4. By giving taxes contributing to local government.
IMPACT OF SMALL BUSINESS IN REGIONAL ECONOMY
1. Direct quality employment generation

2. Affects the crowd in a different region
3. Enables the improvement in different regions (Stevenson, et al., 2007).
IMPACT OF SMALL BUSINESS AT NATIONAL LEVEL
1. Helps in mapping the future
2. Provides economic growth
3. Supporting the community by giving back taxes.
4. Support at economic crises (Stevenson, et al., 2007).
PART-2
TRAITS AND SKILLS OF SUCCESSFUL ENTREPRENEUR
A successful entrepreneur needs many years to refine and practice their occupation, after the
hard work they make themselves potential and enable their abilities to focus their efforts on the
right thing (Bonnstetter .B.J, 2012). These qualities help the entrepreneurs to improve and polish
their skills to get the output for the business. Here are some traits and skills which are shared by
the world’s successful entrepreneurs.
1. DISINCLINATION TO GIVE UP- the most challenging thing a person can do is starting
a business, it needs courage and efforts to deal with the enormous responsibilities from
hiring logistics to the security of others finance. To deal with ups and downs of the
business a person requires lots of determination. It is the most important quality of an
entrepreneur not gives up on a challenge which leads to stress and difficult time
(Elkins .K, 2017).
2. INTENSE WANT TO ALWAYS QUESTION- it is difficult to identify the opportunity
for business by looking outside the world. To make this possible questions are the best
thing to know what's going around. A person to question his success and also on his
failure which will allow him to challenge the basic beliefs.
3. LONG-TERM VISION- it is very different and difficult to maintain your success from
beginning to end. A company always needs to find out area for growth and market
opportunities which needs problems to be solved at present. Let mistakes happen in the
business are the biggest mistake of the leader in order to avoid this strong vision is
important. Jeff Bezos has always strong long-term vision which helps the Amazon to
growth more than 20 years (Bonnstetter .B.J, 2012).
4. AN ABILITY TO GET OTHERS BEHIND THEM- make everybody join you will help
the person to accomplish so much. So entrepreneur must be smart enough to get other
people in committee in a tough time. A person who wants to be the best entrepreneurs
must have effective communication that can transfer ideas and mission with others. The
entrepreneur must have skills to pursue the vision. A person should become so strong and
ideal that other people want to work with him (Markman and G.D., 2014).

5. PASSIONATE FOR THEIR WORK- to be a successful entrepreneur, a person needs
strong mental energy and a certain amount of skills. Energy and passion are utmost
towards work. An entrepreneur needs deeply cares about his work rather than the motive
of getting fame and money.
6. UNDERSTANDING OF THEMSELVES- there is a need to understand himself deeply
in order to handle other people and his work. An entrepreneur needs to relax and use his
best energy at the best time for business. He must understand what's his strength and
weakness so that at vulnerable times can't affect their business badly and utilize their
strength and skills at that time. An entrepreneur who is unconfident will never be able to
manage the problem and lose control over the business. Thus introspection is really
required to maximize the efficiency of own mind and increase the productivity and
energy (Markman and G.D., 2014).
7. ADAPTABLE- as we can see this world is changing rapidly, so companies need to adopt
changes which make their business to last longer. If the entrepreneur is resisting adopting
the changes they will definitely get failed so flexibility is very important and new ideas
and models should be welcomed in the organization (Markman and G.D., 2014). To
maintain the success of their venture entrepreneur need to adapt and constantly learn the
new things so that they can become a better leader and grow as their company grows.
EXAMPLE- Lord Sugar has a number of reasons that make him a successful entrepreneur:
1. He is the self-motivated leader who is well capable of motivating others also.
2. He very well understands the power of possession.
3. He has never given up attitude because of his mental strength.
4. He has the ability to grab new opportunities.
5. As an entrepreneur, he has the determinations and tenacity to achieve business
goals.
EXAMPLE- Richard Branson has five amazing skills which make him a successful entrepreneur:
1. He takes the calculated risks which are very necessary to get the change and
success for the company (Elkins .K, 2017).
2. He welcomes the failure as his mistakes makes him a quick learner and help
him to move on confidently.
3. He thinks big and let his ideas to fly towards success.
4. He knows how to build a strong team because big things can't be achieved
alone so effective delegation is a must.
5. He knows how to build strong connections through excellent communication
skills in order to learn and progress in the industry.

DIFFERENT ENVIRONMENTS WHICH HINDERS AND FOSTER THE
ENTREPRENEURSHIP
Here are some factors which affect the growth and survival of the business, an environment
where companies operate are very dynamic and uncontrollable but some provide greater
opportunities and threats to our business so let's discuss these factors:
POLITICAL ENVIRONMENT- political environment refers to the general stability of the
country where the company supposed to operate its business. The impose of constraints and
permitted activities through political forces determines the business climate that whether it is
suitable or not for enterprise. Political factors such as quality of leadership, the atmosphere
politics is giving to business and philosophy of politics (Behram, et al., 2014).
ECONOMIC ENVIRONMENT- economic environment refers to the economic conditions where
the business is going to operates it primarily activities where the economic factors affect these
activities such as economic policies, labour policies, economic resources, trade and tariff
policies, economic condition, subsidies and incentives, etc.
LEGAL ENVIRONMENT- legal environment refers to the legal and regulatory framework
within the company supposed to operate his business activities. It includes legal rules and
regulations which provides adaptability and flexibility to governing the business activities in the
country. Legal factors include- regulation of entrepreneurial functions, area determination,
regulating results of entrepreneurial activities.
SOCIO-CULTURAL ENVIRONMENT- this is the environment where society set their basic
beliefs, values and norms which further helps in people grow. This environment helps in
preparing the background for entrepreneurial activities (Behram, et al., 2014). This cultural
environment includes the structure of culture, different caste systems and consumer opinion.
TECHNOLOGICAL ENVIRONMENT- this environment refers to the scientific applications
and knowledge for practical purpose in the organization. To make changes in the enterprise
scientific systems, expertise and procedures are applied to make the changes in goods and
services. Technological factors promote growth in an enterprise such as risk efficiency, how to
do better utilization of productive resources, increase in capacity of handling competition and
helps in the improvement in productivity of the enterprise.
INTERNATIONAL ENVIRONMENT- international environment refers to the forces which
affect the enterprises who are working outside the home country (Behram, et al., 2014). This
includes the international capital market, globalization, development in multinational
corporations and GATT/WTO.

CONCLUSION
The study of a different environment is very necessary in the business firms in order to get the business
operations done successfully. It helps in the expansion of entrepreneurial operations. This study enables
the organization to find out the suitable environment for their enterprises to promote new ideas and
ventures.
In this modern era, people are now seeking for their own opportunities as other large firms and enterprises
are not guaranteeing them to provide a job for life thus it makes the people active in behaving and
creating ethical values instead of following the old rules blindly which are set by others. Therefore youth
needs to learn the traits and skills to run the enterprise successfully. To be the owner of the business
requires guts and responsibility to take, make himself progressive through his own hard work, become
strong self-reliant, daring, dynamic, ambitious, opportunist and the initiator of the new ideas and make
them convert into action smartly.

REFERENCES
 Bason, C., 2018. Leading public sector innovation: Co-creating for a better society.
Policy Press.
 Behram, N.K. and Özdemirci, A., 2014. The empirical link between environmental
conditions, organizational culture, corporate entrepreneurship and performance: the
mediating role of corporate entrepreneurship. International Journal of Business and
Social Science, 5(2).
 Bonnstetter .B.J, 2012. The skills that make an entrepreneur. Online available at
https://hbr.org/2012/12/new-research-the-skills-that-m last accessed on 12th March
2019.
 Carree, M.A. and Thurik, A.R., 2010. The impact of entrepreneurship on economic
growth. In Handbook of entrepreneurship research (pp. 557-594). Springer, New York,
NY.
 Certo, S.T. and Miller, T., 2008. Social entrepreneurship: Key issues and
concepts. Business Horizons, 51(4), pp.267-271.
 The corporate sector, 2011. Online available at https://www.agewellfoundation.org/?
page_id=4884 last accessed on 11th March 2019.
 Degryse, H., de Goeij, P. and Kappert, P., 2012. The impact of firm and industry
characteristics on small firms’ capital structure. Small Business Economics, 38(4),
pp.431-447.
 Economic and Social Research Council, 2016. Boosting UK productivity with SME
growth, Online available at https://esrc.ukri.org/news-events-and-publications/evidence-
briefings/boosting-uk-productivity-with-sme-growth/ last accessed on 11th March 2019.
 Elkins .K, 2017. Richard Branson: five skills of a successful entrepreneur. Online
available at https://www.cnbc.com/2017/01/31/richard-branson-successful-
entrepreneurs-share-these-5-skills.html last accessed on 12th March 2019.
 Essential facts about the SMEs in the UK economy, 2019. Online available at
https://www.market-inspector.co.uk/blog/2017/05/facts-about-small-medium-businesses-
in-the-uk last accessed on 11th March 2019.
 Fetsch, E., 2016. Impact of high growth on start-ups. Online available at
https://www.kauffman.org/what-we-do/resources/entrepreneurship-policy-digest/the-
economic-impact-of-high-growth-startups last accessed on 11th March 2019.
 Gnyawali .D, 2019. The environment for entrepreneurship development. Online
available at
https://www.researchgate.net/publication/263733348_Environment_for_Entrepreneurshi
p_Development_Key_Dimensions_and_Research_Implications last accessed on 12th
March 2019.
 Higón, D.A., 2012. The impact of ICT on innovation activities: Evidence for UK
SMEs. International Small Business Journal, 30(6), pp.684-699.