Entrepreneurship and Small Business Management: UK SME Analysis Report

This report on Entrepreneurship and Small Business Management provides a comprehensive analysis of Small and Medium Enterprises (SMEs) in the UK. It defines the concept of small business, evaluates their financial and growth impact on the economy using relevant data and statistics, and examines the political and economic factors influencing SME growth. The report details the specific role of small businesses in job creation, innovation, and employment practices, while also comparing the impact of SMEs across different UK regions and industries. Furthermore, it contrasts the impact of SMEs in two different EU countries. The report also explores the differences between managers and entrepreneurs, identifying the characteristics, traits, and skills of successful entrepreneurs, and analyzes entrepreneurial mindsets using the Big-5 Model and Maslow’s Pyramid. Finally, it discusses factors that hinder and foster entrepreneurship and evaluates the influence of experience and background on entrepreneurship. The report concludes with a synthesis of the key findings and a list of references.

Entrepreneurship and Small Business Management

Contents
INTRODUCTION...........................................................................................................................3
TASK 2............................................................................................................................................3
Define the concept of small business and evaluate financial and growth of micro and small
business impact on the economy by using relevant data or statistics..........................................3
Analyse the needs of SME which include political and economic factors that contribute
towards growth and development................................................................................................4
Examine the specific role of Small business and analyse contribute towards the national
economy.......................................................................................................................................5
Compare the impact of SME for two different UK regions........................................................6
Impact of SME for UK which utilising different industries........................................................7
Comparison between the impact of SME of two EU countries...................................................8
TASK 3............................................................................................................................................9
1. Discuss about the difference between a manager and entrepreneur........................................9
2. Identify the characteristics, traits and skills of the successful entrepreneurs and also
differentiate them from another enterprise manager.................................................................10
3. By using Big-5 Model to analyse the Croft-Simon’s entrepreneurial personality reflect the
entrepreneurial mind-set and motivation...................................................................................11
4. Discuss about the correlation between the success and characteristics of entrepreneurial
with the help for Maslow’s Pyramid.........................................................................................12
5. Various factors that hinder and foster entrepreneurship........................................................14
6. Critical evaluation of the negative and positive influence of experience and background on
entrepreneurship........................................................................................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
The Entrepreneurship and small business is a main part of every business that can offer
unique learning experience where people start their own start-up enterprises. Entrepreneurial
activity is important part that can perform action towards the value generation through expansion
of products and services. It also identifies technological and motivational aspects in the business
that can easily handle the functions.
This report will discuss about the Small business that evaluate the growth, financial
condition of small, medium, micro and private firm in UK economy. It also analyses the political
and economic factors that might have stimulate the development of small business. Furthermore,
this report will describe the role of small business which analyses that how it will contribute to
the national economy. Moreover, it will discuss about the entrepreneurial characteristics and
skills of the entrepreneur requires for achieving goals and objectives. At last, it will evaluate the
experience and background of entrepreneur’s influence in both positive or negative ways.
TASK 2
Define the concept of small business and evaluate financial and growth of micro and small
business impact on the economy by using relevant data or statistics.
Small business is defined as an independently owned which operates the organization but it has
limited size and their revenue depends on the condition of industry. SME owner performed the
operations to control overall functionality. Generally, it employs fewer than 200 employees and
has revenues less than $27 Million (Burns and Dewhurst, 2016).
The small business can be identified by structure, size and its overall revenue. There are
large number of employees working in the SME but it can fall the under scope of independent
entities which are mostly dominates the other business operational area or field. As per analysis,
it has been found that SME which comprises of worker and considered 250 Small business in
UK. According to data and statistics, it has been identified that Small business contribution in the
UK economy and $5.4 million working.
In 2018, Small business accounted for 99% of private sector for 2018 and 99% are based
on the SME and medium scale enterprises (Burns, 2016). In this way, it has to be calculated the
total employment of small business which was approximately $16.3 Million. It also identified
two different types of employing and non- employee business which considered $1.4 to $4.3

Million. The entire population of enterprise including the legal forms such as Sole
proprietorship, ordinary enterprises and other organization.
Figure 1 Analysis Of SME Contribution To Employment
(Source: SME contribution to the employment in UK. 2018)
According to graph, it has been summaised that Samall business contribute towards the
manufactiuring sector related the employment opportunities. It has been increase the total
employment by SME in the manufacture sector from 2000 to 2006 an reprsenting that it has
increaed 18 % over time intervals. It emphasises that SME positive impact on the economy by
generating employement because large business has limited demands of new employees (Volery
and Mazzarol, 2015). It does mean for cutting the job and recuced the productiviuty of large
business.
Many SME exist to serve the service as per demand of customer that help for improving
the quality of good and servuces. Small business is important which specialsed in the
intermeduate good and produce in global marketplace.
Analyse the needs of SME which include political and economic factors that contribute towards
growth and development.
The success of SME depends on the economy of nation where business has launched in
global marketplace. It can be defined the number of SME in the population at time that refer to
overall percentage of existing enterprises. The low interest rate must be facilities to access the
capital but it has required the suitable resources. For Example- In south Africa, it is higher prime
interest rate of 15% with limits both capital amount and consumption rate.

Political Factor
The political environment of UK to which the Small business will impact on the
sustainability and growth. In UK, Government plays important role for planning the small
enterprises and position of political environment influence the growth rate of business. Political
parties always influence the practices of enterprise which allows to enter into the specific
arrangement regarding allowances, acquisition and out sourcing between the SME all over the
world.
Economic Factor
It refers to the state of region and country economy that significantly impact on the Small
business structure, size and profitability. It may identify the direction of economic system where
SME will operate in properly (Ratten, 2014). In this way, the business survival must be depended
on the economic culture and environment. It influences the enterprises that increase ability to
obtain all resources, product and services so that it helps for SME to improve the quality and
determine the better opportunities for growth and development.
Examine the specific role of Small business and analyse contribute towards the national
economy.
Small businesses are the important part of country economy that can represent as vital
source of growth and development. It has performed the different role that impact on the
economy.
Job Creation and Employment
Small business plays an important role in the national economies where it makes up 90 % of
business which accounts for 70% job opportunities. It also shares the trends where enterprise
offers the variety of product and service at low price. In retail sector, SME enterprises will
increase the employment and higher the establishment of business because it has limited size
than other manufacturing (Zaridis and Mousiolis, 2014). For Example- The retail enterprise,
restaurants and hotels were dominated by the small business, the establishment of SME account
90 % of employment opportunities.
It is not Surprising where the SME plays important role in the job creation where it also
expressed in the relationship with the small or large establishments. The rate of job creation rate
is higher.

Contribution towards innovation
It has been analyzed that innovative concept and ideas are developed within the small business
enterprises because they are planning the produce an effective solution in order to improve the
quality of product and services (Bogdanova and et.al., 2016). It also uses for launching a new
product in global marketplace because the demand of consumers can be changing according to
the trends. In this way, Small business have an opportunity to increase the productivity and
profitability in global world. In this way, it directly contribution towards the economy of nations.
Employment Practices
Small enterprise can hire the less experienced people and candidates which help for
national economy because it helps to secure the job with no experience and also follows the
minimum conditions. SME provide the training to new employee and also work on grooming
individual as per the experience.
Compare the impact of SME for two different UK regions.
According to survey, it has been analysed that there are 5.7 million small business
established in UK or different regions. It can be defined as enterprise that have 300 employees
which accounted for 60% private jobs.
Unfortunately, London is the highest ratio of Small business that can identify by
comparing between different residential region of UK. As per survey, it has been found that there
are three different regions of UK such as south east and south west.
West Midland is the fastest growing region which increases rate of profit 9% and change
on every year. Northern Ireland 6%, Scotland 7% are producing the highest rate other than
London. It always helps for UK to increase annual growth rate.

Figure 2 Average Profit Of SMEs
(Source: Profitability of Small business. 2018)
Impact of SME for UK which utilising different industries.
SME is the biggest industry in United Kingdom where there are large number of service
sectors. It operates 74% service industry and 18% construction industry of entire UK.
In service industry, it is to be considered the largest sector where both includes scientific and
professional services. It provides the marketing of architecture, legal services and other type of
veterinary etc. it mainly covered 15% overall UK enterprises (Fayolle, Liñán and Moriano,
2014). On the other hand, retail industry also established their business and identify that 10%
based on landscape and 19%private sector of employees. It always generating 33% turn over
through UK businesses.
Figure 3 Total UK Employment & Turnover of Industries

(Source: Overall Employment & Turnover of Industries. 2018)
Comparison between the impact of SME of two EU countries.
European union is the largest in terms of research and innovation, financing that operating
the overall budget approx.77million. Small business serves the financial instrument which
implementing the innovation for increasing the sustainable growth and development.
As per survey, after decline the large number of business due to financial and economic
crisis. Small business employment has been grown by 5.4% from 2012 to 2017. In this way, it
has been faster almost 51% at same time. The great contribution of Small business by non-
financial enterprises which are particularly important for different countries such as Italy, Malta,
Cyprus and Greece etc.
Figure 4 Contribution of SMEs to employment
(Source: Contribution of SMEs to employment. 2016)
Figure 5 Contribution of SMEs to value added
(Source: Contribution of SMEs to value added. 2016)

As per analysis, it noted that small business accounted in year 2016 for 30% (percentage) of its
overall employement and also 21 % value added in the business industries. Similarly, in 2016 it
also generated share by SME with range from germany to Malta of 16% and 36%. In this way, it
easily identified the variation in the small business of different countries (Fayolle and Gailly,
2015). After few years, it also observed that the share of employmenet of Small and medium
enterprises range from 11% to 25% while the value added share from 8% to 28%/
As per research, Hungrey and Germany are two different countries in which the entire
enterprises fell down between 2009 to 2014, it has been declined the enterprise because of 0%
employees.
TASK 3
1. Discuss about the difference between a manager and entrepreneur.
An entrepreneur is a person for establishing own business in marketplace whereas Manager
is responsible employee in the organization to handle the business operations and functions.
Entrepreneur Manager
 An entrepreneur is basically visionary
that always bears all type of financial
risks.
 It always focused on the business for
expanding their branches across the
world.
 The key motivational is the best
achievement for entrepreneurs.
 An entrepreneur can informal and
casual.
 Managers are working for salary and
they cannot take risk.
 It is mainly focused on the business
operations to manage the functionality
of organization.
 Managers are motivating their
employees for maintaining good
relationship between them.
 Manager always behave in the formal
manner.
Table:2

2. Identify the characteristics, traits and skills of the successful entrepreneurs and also
differentiate them from another enterprise manager.
Croft-Simon is a successful entrepreneur that has been launched new product like Nom
Popcorn in 2015. It is the simplest idea but also difficult to implement the new innovative idea.
There are some common characteristics, traits and skills of Croft Simon.
Characteristics
 Self-Motivation- It is one of the most common characteristics of Croft-Simon because
he always motivates their employees and keep dedicated towards the strategy or
planning. It is important characteristic of successful entrepreneur to maintain their
confidence level which inspire the other and themselves (Ramadani and et.al., 2015).
 Take Risk- Croft-Simon take a risk for launching a new product in marketplace but this
type of product already present. A successful entrepreneur playing safe to calculate the
risk and increase the success of business.
 Passion- Croft-Simon become passionate about the innovation to understand the new
product and services. Passion always help for finding the motivation and drive to move
forward.
Skills
 Communication- It is an essential need for the successful entrepreneur because that can
understand the need and requirement of other customers. They are communicating
effectively with the stakeholders to provide information about the business. by
communication skill, Croft-Simon are interacting with the client to identify their demand.
 Ability to learn- This skill will help for croft-Simon entrepreneur to understand the new
idea and implementing in the new product development. This ability will help for croft to
handle ups and downs situation during new product launching and development.
 Creativity- this type of skill being able to build a relationship between the situation and
condition. A entrepreneur were trying to find the solution and identifying the purpose of
item to launch in global marketplace.
Traits
 Leadership qualities- This type of trait will help for maintaining and controlling the
business operations and functions. Leaders are born and not made because they have

inbuilt quality to guide or make accurate decision regarding business development. croft-
Simon has a leadership quality to create own goals for developing business effectively
and efficiently.
 Serial Innovators- It can be defined the entrepreneur through constantly create new idea
which help for improving the processes. In this way, croft-Simon has decided to change
the existing product and use innovative idea in the new item development. It was not easy
to make strong position in marketplace.
3. By using Big-5 Model to analyse the Croft-Simon’s entrepreneurial personality reflect the
entrepreneurial mind-set and motivation.
A big five model is based on the personality traits that can describe the motivation and
mind-set of entrepreneurial. It is applied on the personality information to understand their
specific traits and how it useful for the successful entrepreneurial. It is to be considered the five
different factors that applicable for entrepreneur traits and also reflecting towards the
motivations.
Openness
It is based on the insight and imagination of entrepreneur when many people has interests
towards the new idea and concepts. They always shown their curiosity towards new things and
want to new experiences. In this way, it can be identified that Croft-Simon’s take risk and doing
something creative to launch a new product in global marketplace (Dunne and et.al., 2016).
Sometimes, they may face challenges due to transitional idea but new concept always improve
the quality of services. It also increases the productivity and profitability of enterprises.
Conscientiousness
It usually based on the high quality of thoughtfulness and behaviour of goal directed.
Croft-Simon was highly conscientious towards the product development and also organised the
idea in proper manner. They are making a strategy to complete the task within specific deadline.
Extraversion
It is a type of sociability, assertiveness and sociability with the high quality of
expressiveness. Croft-Simon who has a highly extraversion that easily gain the energy in the
business situations. They also helping the other people and feel excited towards the business

tasks. This type of motivation tend to improve the knowledge towards innovative product
development.
Agreeableness
This type of personality traits must include kindness, trust, affection and altruism etc. It
helps for reflecting the behaviour of Croft-Simon entrepreneur. He was highly agreeableness
behaviour that tends to improve the cooperative while it increase the competitiveness.
Neuroticism
It can be representing the traits by emotional, sadness, instability and moodiness which
based on the experience of people. This type of traits reflect the personality of entrepreneur
where they feel lot of stress as per experience. It also gets upset because of project failure in
marketplace.
4. Discuss about the correlation between the success and characteristics of entrepreneurial with
the help for Maslow’s Pyramid.
Maslow’s Pyramid usually based on the needs of motivational theory for human being
because it must satisfy before attend to the individual for finding needs. As per theory, it help for
individual to motivate towards their requirement such as money, shelter, food etc. these are
essential components for people to feel secure and also protect their life or avoid the unexpected
things.
Figure 6Maslow's Pyramid
(Source: Maslow’s Hierarchy. 2018)