Entrepreneurship & Small Business: SME Impact on Social Economy

This report provides an overview of entrepreneurship and small business management, focusing on entrepreneurial ventures and their impact on the economy. It discusses different types of entrepreneurial ventures, including lifestyle, serial, social, and growth entrepreneurship, highlighting their similarities and differences. The report also examines the impact of SMEs on the UK economy, emphasizing their contribution to job creation, revenue generation, and overall economic growth. Furthermore, it explores the importance of small businesses and start-ups in the growth of the social economy, focusing on how SMEs contribute to increased competition, education levels, and effective marketing techniques. The report concludes by touching upon the traits and skills needed by entrepreneurs to succeed.

UNIT 9 -
ENTREPRENEURSHIP
AND SMALL BUSINESS
MANAGEMENT

Table of Content
INTRODUCTION...........................................................................................................................1
Types of Entrepreneurial Ventures .............................................................................................1
Similarities and Differences Between Entrepreneurial Ventures................................................2
Impact of SME on Economy........................................................................................................5
Importance of Small Businesses And Business Start-Ups To The Growth of The Social
Economy. ....................................................................................................................................6
Measuring the aspects of entrepreneurial personality reflect motivation and mindset ...............9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Every person has desire to have their own business and people who have the innovative
business ideas and convert them into high profits economic activity according to market trends
are known as entrepreneurs (Barba-Sánchez and Atienza-Sahuquillo, 2018). They have the
ability to take risk in order to increase their profitability and business growth buy satisfying
needs and wants of its customers effectively. Entrepreneurship is very essential for small
business enterprises as it helps to increase thee efficiency by analysing all the internal and
external environment factors to determine strengths and weaknesses of business to compete in
market effectively and achieve core competency. To be more effective in making decision
entrepreneurs also need to have potential skills and knowledge to determine all the factors which
is available in the market. In this report there is a brief explanation about entrepreneurs and small
businesses. Entrepreneurial ventures and typology is discussed in report with the impact of SME
in the economy. Additionally, report also highlights the importance of small businesses in
growth of social economy, skills and traits of entrepreneurs which helps them to increase their
potential and influence of experiences and background of entrepreneurs in their success.
Types of Entrepreneurial Ventures
Entrepreneurs are the person which has the ability to establish new business by analysing market
trends. Entrepreneurs are also having the high potential to take risks by innovating and creating
new products and services which increases profitability in market effectively. The business
which is used to portray innovation of products and services is called entrepreneurial ventures.
Entrepreneurs formulate strategic plan by analysing all the available resources to reduce the cost
and survive in market effectively (Stenholm, Pukkinen and Heinonen, 2016). Entrepreneurial
ventures are very unpredictable with high profit margins which also have the potential to
compete with potential player in market.
Lifestyle Entrepreneurship
Lifestyle entrepreneurship is the types of venture in which the entrepreneurs are more focuses on
improving their lifestyle and not profit margins (Wales, 2016.). This type of venture is based on
the passion of entrepreneurs and also has the potential to innovate and create new trends in
market effectively. Lifestyle entrepreneurship is focusing on what are the passion of a person and
making it as a business to earn profits lifestyle entrepreneurs are also very essential in
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understanding and making effective changes in their outer society to become more successful.
These entrepreneurs are also known as home entrepreneur who work in their comfort zone.
Individual in this type of venture are more productive and also came up new ideas regularly to
develop efficient lifestyle and improve its business. Serial entrepreneurs are those people who
starts new business ventures to sell them and profit from it.
Social Entrepreneurship
Social entrepreneur are the individual who have the ideology to support and help the society with
their skills and knowledge. These entrepreneurs are more willing to become social entrepreneurs
as they more focused on society upliftment (Rodríguez-López and Souto, 2019). Social
entrepreneurship is a venture which is started by these types of entrepreneurs just for social
welfare and solving the issues of society effectively. The main of social entrepreneurial venture
is to improve the society by doing various activities which a person thinks to do it in their ideas.
They have the capabilities to innovate just increase the standard of living of society and do not
care for profits.
Growth Entrepreneurship
The growth entrepreneurship venture is a business which is more focused to grow by
achieving its objectives and improving its internal and external factors. The business focuses on
efficiency by research and develops of products and providing high quality to its stake holders it
aims to leading in the market and gain growth rapidly. The main aim of these ventures is to gain
better profits in long term and increase the size of the business effectively. The entrepreneurs
who are more focused will be more interested in this type of ventures and commonly innovators
and builder entrepreneur are related to growth venture. Female entrepreneur are also very
focused and now growing rapidly in market to mark their presence effectively.
Similarities and Differences Between Entrepreneurial Ventures
Serial and Lifestyle Venture
Serial entrepreneurs are the person who has the aim to start new business and sell them to earn
profits and increase their potential (Wright and Westhead, 2016). These entrepreneurs are having
the ability to increase profit margins of the business by taking high risk and converting those
businesses into success and then selling them in market. They also have effective skills which
separate them from other entrepreneurship ventures.
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Lifestyle entrepreneurs are the individual who are more focused on pursing their passion with the
hep the he business and not on the profit. This type of entrepreneur posses greater potential to
innovate products and services according to needs and demands of customers in current market.
They choose to become self-employed in order to live freely and without any stress (Jones and
et.al., 2018). They usually work from home or at their comfortable zones to make the full
utilization of their potential. This venture always motivated the person which is following their
lifestyle and desires to be free.
Serial Entrepreneurship Lifestyle Entrepreneurship
Location Serial entrepreneurship is not
fixed to one location as many
new businesses are started and
sold by entrepreneurs.
The location of serial
entrepreneurship is not fixed
as they are free to what they
want, and they are more
focused on their passion
(Storey, 2016).
Investment The companies are started at
very minimum investment and
it is financed by investors
according to potential of
innovative ideas and business
growth prospects.
Lifestyle ventures do not
require additional investment
as they do not focus on their
profit maximisation and
invests their personal earning
in their business.
Profit Margins The main purpose of this
venture is to gain maximum
profit y making the companies
potential in market and
increase its value.
They main purpose of this
venture to improve their
lifestyle and follow their
passion.
Innovations These ventures are more
innovative and have potential
to reach customers more
effective.
The innovation is not the
priority of this ventures but it
happens in the course of
action.
Objectives These ventures adopt proper
workforce to achieve the
Entrepreneurs of this venture
are not focused on the
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objectives on time. objectives of their business.
Exit Strategy The business main aim is to
exit as fast as it can by gaining
maximum profits with better
growth opportunities. As they
are short term ventures.
The entrepreneurs are more
effective and more happy
with their work and do not
plan anything to exit
business.
Business structures Leadership styles and
organisation structures are
followed in this venture too
increase efficiency.
The venture has no structure
and mainly the entrepreneurs
do everything in this venture.
Male and Female Entrepreneurs
There are many factors which separates female and male entrepreneur venture from in each other
and also they have different potential and are of understanding. Culture and origin also play a
very important role in the success of both entrepreneurial ventures (Lechner and Pervaiz, 2017).
Some of the similarities of both entrepreneurs are they have the same ambition of increase profit
margins and increasing the potential of their business effectively.
Male Entrepreneurs Female Entrepreneurs
Funding Male entrepreneurs have more
effective potential to gather
funding from the market to
start their own business.
Due to stereotype Female are
not preferred to be funded
due to high risks of failures.
Confidence Male entrepreneurship have
more experience in business
and market it is very easy for
male venture to be confident
in establishing business.
Female entrepreneurship
venture are more suppressed
as female have different
social groups than men which
differentiate the confidence in
both ventures.
Purpose To become successful and
earn more profits and achieve
core competency.
Female ventures and majorly
operated to increase
awareness of women
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empowerment and also profit
maximisation.
Public Sector
This sector is controlled and operated by government of the country and main purpose of public
sectors business is to provide high quality services and products to its customers with less profit
margins. Social entrepreneurship ventures are included in public sector.
Corporate sector
Corporate sector are the private business which have the main aim to increase profit and compete
in market to improve market shares (Almahry, Sarea and Hamdan, 2018). Growth
entrepreneurship venture is a type of corporate venture to improve the growth by achieving its
objectives by effective planning of resources to increase profitability.
Impact of SME on Economy
Industry are divide into many businesses according to size and scale which have its impact on the
industry and also help industry to develop its potential and increase growth of economy
effectively. Small and micro enterprises’ are present in every industry and it is very essential part
of every industry, it provides raw material to large scale business. They also play a significant
role in providing satisfaction to customers and improving the quality of goods and services by
increasing completion in market. In UK, the composition of small and micro business is very
high and more than 4.5 million SMEs are established in UK. This figure is calculated to be 99
percent of total business organization in entire UK. As SMEs are the backbone of the UK
economy and help in increasing the job opportunities in country to develop lifestyle and improve
standard of living effectively. It is contributing a total of 47% of revenue to UK economy and
increasing rapidly with the increase in the demand of customers. Due to the Impact of Brexit the
export of UK has increased more than 1.15 billion Pounds due to high number of SMEs in UK.
This also helped the SMEs to get more funds by government to start their own business. This has
also increased the GDP of UK positively as SMEs has effective innovations which help to
improve the efficiency of the industry. In the year, 2016 more than 5 million SMEs had
employees more than 250 which has improved the growth of population and education level to
increase their skill effectively. SMEs contributed more than 1.8 trillion Pounds of aggregate
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revenue in 2016. This also helped market to develop effective manufacturing industries by
providing them with raw material and other resources (Caputo, 2019). SMEs have supported all
the operational areas on business industry in UK by providing better opportunities and
innovating. This has also helped customers with better variety of products in market due to high
competition. Private organization is essential part of SME as majority of small and medium-sized
business are privately owned, and they focus on profit maximization with limited resources.
These business also have different opportunities which UK government are providing by setting
system to enhance effective operation of businesses and improve the feasibility to lower the cost.
Private businesses in UK are divided in proprietorship business and partnership business. In
proprietorship business there is one owner which can be entrepreneurs which have innovative
ideas to grow business effectively. Partnership business is the integration of two or more
individual businesses to form conglomerate and increase the potential of business and funding to
compete with large scale companies effectively.
Importance of Small Businesses And Business Start-Ups To The Growth of The Social
Economy.
SMEs and start-ups have increases the contribution in develop social economy of UK positively.
With the increase of small and medium-sized businesses in market it increases competition, and
they increased education level of customers and developed effective marketing techniques which
are focused on customer satisfaction. Small and medium business helped UK to increase job
opportunities which indirectly provided high income level to majority of population of country.
This gave them better disposable income to increase their standard of living and increase the
efficiency of the manufacturing units by increasing their needs and wants effectively. As SMEs
and start-ups have potentials to gain better revenues due to innovative techniques and skills to
improve sales and product quality and increase perceived values of customers effectively. Start-
ups helps UK to increase employment rate as new business need cheap labour and cheap labour
are unskilled this also provides opportunities to uneducated population and improving their
stands of living effectively. There are many start sups which have the purpose to provide social
welfare or CSR activities in order to increase their brand value rapidly they also hire many
employees and grow business (Woodfield, Woods and Shepherd, 2017). This also helps UK
social economy to grow and increase their potential to increase GDP of country with the
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increased education level and better job opportunities. Small and Medium sized business are
have major contribution in export and import of products and services which helps to develop
infrastructures and many construction companies and financial banks are partnering with
international business to attract more foreign direct investments. This also helped to increase
health care sectors for UK population effectively.
Small Businesses Medium Businesses Large Businesses
Size In UK there are
around 5.8 million
small businesses.
Employees are more
than 16.6 million
which is 60% of total
employment of UK.
Medium business
constitutes total of 3.5
million 16%
employment in UK.
35600 business are
medium-sized.
Large business
constitutes total of
40% employment in
UK effectively. 7700
business are large
scale in UK.
Turnover The total annual
turnover of this
segment in UK is 2.2
million pounds
0.6 trillion pounds The total turnover of
large business are 2
trillion pounds.
Profit Medium High Low
Rate of Growth The rate of growth of
small business from
previous year is
negative 27%.
The growth of
medium size business
inn UK is 33%.
The business growth
recorded was 7%.
Innovation They are highly
innovated with new
ideas.
They are innovative. They are most
innovative and focus
on cost efficiency to
increase profits.
Sustainability Due to small size it is
very easy for the
business to implement
They've effective
management system
to adopt
They adopt CSR in
the society.
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sustainable
environment.
substantiality.
Adaptability The company is not
adaptable with the
change in the
environment due to
low skills of
employees and labour
centric nature.
They have potential to
adapt with change in
external environment.
They are most
adaptable due to
international
operations.
Influence of Characteristics and Traits in Success of Entrepreneurs
Traits and characteristics play a very important role in the success of include as it helps to
increase the knowledge and skills to achieve personal and professional objectives effectively.
Traits are the characteristics which is linked with behaviours of a person. It defines the
personality and quality of dedication to achieve goals effectively.
JK Rowling is the one who was open-minded, as she was the one who was guided by
many that bringing adventure comedy in the market but with the help of the handwork and clear
visibility about the goal she wants to achieve. JK Rowling was able to achieve the goal
efficiently in the market. At the same time Richard Branson was also having clear vision from
the starting stage itself but the difference which was shown by Richard Branson was creative in
the nature as he brought the magazine in the market which was unique in the nature. JK Rowling
was the one who has shown very good decision-making skill, as in the initial stage there were
many options which was in front of her, but she decided to go with the adventure comedy due to
clear visibility of the thought (Shabbir, Ghazi and Mehmood, 2017). Richard Branson was the
one who has not shown that sort trait as he has failed several times in the career to make different
decision. At the same time Richard Branson has shown a good amount of time management skill,
as he was the one who used to schedule different activity in the organization very efficiently.
Point of Different Entrepreneur Manager
Approach Entrepreneurs follow creative and
innovative approach for
Manager follow more
conventional operational
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conducting business operations.
Entrepreneurs observe the needs
and issues of the society and based
on such needs and issues
entrepreneurs plan a suitable
business plan.
approach for conducting
operations.
Guidelines Entrepreneurs don't generally
follow the set guidelines or
principles for conducting
operations. Entrepreneurs follow
the more situational approaches in
order to meet various requirements
associated with business
operations (Trehan, Higgins and
Jones, 2018).
Manager follow the set
management principles in
order to conduct operations.
Managers also need to support
the guidelines frames by the
senior dignitaries in the
company.
Innovation and
Creativity
Entrepreneurs use more creative
approach to conduct business
operations.
Innovation and create is among
the major tool of business
practices used by entrepreneurs.
Managers don't generally
involve creativity and
innovation in conducting
operations.
Managers take various
decisions based on the
operational situations but
innovation and creativity is not
a major tools used by
managers.
Measuring the aspects of entrepreneurial personality reflect motivation and mindset
The entrepreneurship need to measure their personality with the OCEAN five factors
which helps to understand the skills and characteristics of entrepreneur to make them more
effective according to their potential (Kurpayanidi, 2018). This measure are done with the help
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of Consciousness, extroversion, agreeableness, neurotics and these factors have also increased
the potential of JK Rowling and Richard Branson to become successful globally and increase the
efficiency to gain high profits with these factors effectively.
Openness
This is the personality which includes high excitement to do work and increase the
efficiency. This factors also includes high thinking very deep and also increase the interest in
many other fields to gain more knowledge about the topic and increase the practical knowledge
to increase efficiency. AS Richard Branson and JK Rowling has this personality factors which
helps them to be become successful in their careers.
Conscientiousness
This personality traits includes high preparation before taking any action , long decision-
making process, even distribution of work according to its importance (Ribeiro-Soriano, 2017.).
These people also have the habit to pay attention to every detail to understand all the factors.
Extraversion
This type of personality have better social attitude and due to this they are more likable in
their workplace. They also have the tendency to become more effective in making new friends
and have high energy when people are around them.
Agreeableness
The personality of this person includes trustworthy, humble, affections and have the
tenancy to be more cooperative effectively. They have a soft corner to understand the feeling of
other . JK Rowling and Richard Branson also has their personality trait which help them to
understand other people and make tight decision effectively.
Neuroticism
These people are sadder and have high mood change according t the situation and are nit
mentally stable in taking proper decision in their career.
Impact of background and experience in hinder or foster entrepreneurship.
There are many benefits of attaining entrepreneurship activities and also helps individual
to develop effective personality which help in gain higher profit margins in the future effectively.
As becoming an entrepreneur increase the power to innovate and take decision of own self
effectively. This also helps to increase the potential to formulate effective schedules to manage
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