Understanding Entrepreneurship: A Report on Small Business Management

This report, created for the Federation of Small Businesses (FSB), provides a comprehensive analysis of entrepreneurship and small business management. It begins by defining entrepreneurship and exploring various venture types, including social, public, and private entrepreneurial ventures, comp...Read More

Entrepreneurship and Small
Business Management

INTRODUCTION
Traditionally entrepreneurship process has been known to encompass all the operations
of an entrepreneur during the creation of a business organisation or entrepreneurial venture and
operating it within the operational industries with the intention to generate maximum amounts of
profits. While the modern definitions of entrepreneurship also have come to encompass the
additional activities undertaken by an entrepreneur with the intention to finding new and
innovative solutions to the issues and challenges that society faces in the current world (Monitor,
2016). Entrepreneur through their individual operations have nowadays become immensely
important and essential towards the development of the entire business environment of a country
and the operations of an entrepreneur also contribute enormously towards the economic growth
of the country. This report analyses the various types of entrepreneurial ventures that
entrepreneur creates, their impact on the overall economy of UK, the skills and characteristics
that are possesses by competent and successful entrepreneurs.
MAIN BODY
LO 1
P1 Distinct Forms of Entrepreneurial Ventures
Entrepreneurs are individuals who create and establish an entrepreneurial venture or
business organisation and operate it within the consumer markets with the intention to generate
maximum amounts of profits for the entrepreneurial venture and the entrepreneur. Enterprise
relates to the business organisation that is created by the entrepreneur that operates in the
consumer markets with regards to generating maximum amounts of profits. Entrepreneurial
activity encompasses all the human action, decision making operations and risks that an
entrepreneur takes while establishing and operating their enterprise in the operational industries.
On the other hand, an intrapreneur is an individual or manager within the business organisation
who promotes and encourages innovation with relation to product development and marketing
operations of the business organisation or entrepreneurial venture. Intrapreneurship is the process

of behaving and conducting operations similar to an entrepreneur but working within a large
business organisation, that is created by someone else.
Primarily there are three main forms of entrepreneurial ventures that can be created by
entrepreneurs based on their wishes, objectives and goals for the entrepreneurial venture. These
are as follows:
 Social Entrepreneurial Venture:
Social entrepreneurial ventures are created by private entrepreneurs with the intention to apply
the new, advanced and modern technologies and innovative solutions to the most challenging
problems or issues that are faced by portions of a given society with the intention to create a
better future for these underprivileged sections of the population. The private entrepreneur
creates and funds the entrepreneurial venture and makes use of new innovative solutions to
address the issues and problems of a society (Kraus and et.al., 2019). This form of
entrepreneurial venture links the operations of the following two forms of entrepreneurial
ventures private and public. Examples of social entrepreneurial ventures include the Grameen
Bank which is a privately owned and operated social entrepreneurial venture that provides
collateral and interest free financial loans to the underprivileged sections of the population.
 Public Entrepreneurial Venture:
These forms of entrepreneurial ventures are created by individuals who are part of the governing
authority of a country, with the operations of the public entrepreneurial venture geared towards
providing the society with innovative services and goods that are able to effectively increase the
standard of living and lifestyle of the given population. Such public entrepreneurial ventures
operate with the intention to improve the living conditions of the society at large.
 Private Entrepreneurial Venture:
These forms of entrepreneurial ventures are created and owned by a private entrepreneur,
who operates the entrepreneurial venture with the intention to satisfy the needs, demands,
requirements and preferences of market consumers so that maximum amounts of profits can be
generated by the entrepreneurial venture for the entrepreneur. These forms of entrepreneurial
ventures require the entrepreneur to take on significant risks, with the potential to provide

significant rewards if the entrepreneurial venture proves to be successful in the consumer
markets (Parker, 2018). Examples include Tesla, created by Mr Elon Musk with the primary
intention to generate profits by satisfying the needs, demands and requirements of the customers
of the automobile industry.
P2 Differences and Similarities Between the Distinct Forms of Entrepreneurial Ventures
The main similarities and differences between the distinct forms of entrepreneurial
ventures can be showcased effectively through the use of a table as follows:
Basis Social entrepreneurial
Venture
Public entrepreneurial
Venture
Private entrepreneurial
Venture
Strategy The business strategy of
social entrepreneurial
ventures focuses on making
use of new, advanced and
modern innovative
technological solutions to
address the social issues
and problems of a given
population.
The business strategy of
public entrepreneurial
ventures emphasises on
addressing the cultural,
environmental and social
issues within a given
population (Nambisan,
2017).
The business strategy of
private entrepreneurial
ventures focuses on creating
goods and products that are
able to meet the needs,
demands and requirements
of their customers so that
maximum profits can be
generated.
Value Social entrepreneurial
ventures conduct their
operations towards being
able to provide social value
to the underprivileged
sections of a population.
Public entrepreneurial
ventures conduct their
operations towards being
able to provide value to
the general public.
Private entrepreneurial
ventures conduct their
operations towards being
able to provide financial
value to the entrepreneur
who created it.
Objectives The organisational
objectives of social
entrepreneurial ventures
relate to providing the
underprivileged sections of
the population with value
and enhancing their social
wellbeing.
The organisational
objectives of public
entrepreneurial ventures
relate to making use of
new advanced and
innovative solutions to
improve the living
standards of the given
The organisational
objectives of private
entrepreneurial ventures
relate to optimising their
generated profit margins in
the consumer sector.

population.
Funding
Sources
Social entrepreneurial
venture procure the funding
required to effectively
conduct their operations
through the donations,
grants and public goodwill
from the external
environments.
Pubic entrepreneurial
ventures procure the
funding required for their
sustained operations
through the taxes and
customs that the given
population pays to the
governing authorities of
the country.
Private entrepreneurial
ventures procure their
financial funding directly
from the pocked of the
entrepreneur or through
other funding sources such
as crowdfunding, bank loans
etc.
LO 2
P3 Impact on the UK Economy Through the Operations of Small and Micro Sized Business
Organisations
As of the recent surveys conduct in the UK in 2019, there are operating more than 5.5
million different businesses and companies within the private sector of UK, all of which are of
different sizes and scopes. Out of these total 5.5 million businesses in the private sector of UK,
5.4 million businesses are categorised to fall within the small sized business organisation. A
small sized business organisation employs individuals within the range of 10 to 50 in order to be
able to successfully conduct their daily operations in the private sector of the UK. Again, out of
these 5.4 million distinct business organisation, 5.3 million businesses are categorised as being
micro sized business organisation. Micro sized businesses only employ a total of less than 10
distinct individuals for successfully conducting their daily operations in the UK’s private
sector(Frederick, O'Connor and Kuratko, 2018). As the UK’s private sector possesses such a
high number of micro and small sized business organisations, their operations and functions have
had a relatively beneficial impact on the overall economic development of the UK. The
operations conducted by these 5.4 million small and micro sized business organisations
contributes immensely and significantly towards the GDP and national income of the UK. As of
2016, small and micro sized business organisations operating within the private sector of UK,

collectively contributed to almost 47% of the overall annual turnover of UK’s private sector
which was close to 1.8 trillion pounds sterling.
These 5.4 million business organisations of small and micro size also have a significant
impact on the overall economic development of UK as apart from the financial taxes that the UK
government collects from such business organisations, they also create significant employment
opportunities for the UK population, which also significantly contributes to the overall economic
development of the UK and reducing the UK’s unemployment rates. As of 2019, Out of the total
employment opportunities in the private businesses of UK, 60% came directly from the
operations of business organisations that were of small and micro size(Read and et.al., 2016).
This means that small and micro sized businesses are the primary source for millions of UK
citizens to earn their daily wages and make a living and with all these employees also paying
financial taxes to the UK government, this too adds to the national income and GDP of UK. Thus
business organisations of small and micro size contribute immensely towards the economic
development of the UK.
P4 Significance of Small Businesses and Start Ups Towards the Social Economic Growth of UK
Start ups are business organisations of small size that possess limited organisational
resources and financial capital. Start ups conduct their business operations by trying to meet the
demands and requirements of the customers within the external markets and earn financial
profits with the intention to make their operations sustainable for the future. Start ups and small
sized business organisations are immensely important to the growth of social economy in UK
because of the following reasons:
Employment: The operations of start ups and small sized business organisations of UK
contributes immensely to the growth of social economy of the country, through the ability of
such businesses to provide employment opportunities to large sections of local UK population.
The employment opportunities provided by small sized businesses and start ups allows for large
sections of the local UK population to earn daily wages and make a living thus contributing
towards the social development of the society.
Meeting Market Demands: Start ups and small sized business organisations conduct their
operations primarily to satisfy and meet the expectations, demands, requirements, needs and

preferences of the consumers of UK (Malecki, 2018). This results in goods and products
available in the consumer markets of UK which can be used by diverse sections of the UK
population for varying purposes from making their daily operations easier to increasing the
overall standards of living for their customers.
Financial Taxes: All business organisations of small size and start ups have to pay financial
taxes to the UK’s government, for all the operations and profits generated by such business
organisations. These taxes can be used by the government of UK to encourage and enhance the
growth of social economy in UK effectively.
LO 3
P5 Skills, Characteristics and Traits that Distinguish Successful Entrepreneurs from other
Managers
Competent and successful entrepreneurs all possess and share certain characteristics,
skills and traits that are immensely essential towards successfully conducting their
entrepreneurship operations. These sets of characteristics, skills and traits also distinguish
competent and successful entrepreneurs from all other operational managers within a given
business organisation. The skills, characteristics and traits that are shared by all successful
entrepreneurs using the example of Mrs J.K. Rowling who is one of the most successful and
profitable entrepreneurs of the world and created the fantasy novels Harry Potter and becoming
the first author to have a net worth of over $1 billion dollars, are as follows:
Proactive: One of the most important characteristic that distinguishes competent and successful
entrepreneur from other entrepreneur and operational managers is their ability and habit of not
waiting for the help of others to bring their vision into a reality, instead a successful and
competent entrepreneur finds ways by themselves through which their vision of an
entrepreneurial venture can become a reality (Ateljevic and Page, 2017). All successful
entrepreneurs such as Mrs J.K. Rowling are highly proactive in nature, not waiting around for the
permission or help from others, instead taking advantage of the opportunities available to
themselves in a proactive manner to bring their vision into reality. Mrs J.K. Rowling was highly
proactive.

Motivated: As entrepreneurship activities require the entrepreneur to take on significant risks
both personally and financially, all successful and competent entrepreneurs share the
characteristic and trait of being highly motivated inherently so that the eventual failures that
might come from the immense risks that entrepreneurs are required to take does not affect their
entrepreneurship activities in the long run. This trait and characteristic is highly important and
essential for any individual such as Mrs J.K. Rowling to become a successful and competent
entrepreneur as without high levels of inherent motivation, no individual can successfully take on
the risks associated with entrepreneurship. Mrs J.K. Rowling was also highly motivated.
Creative and Innovative: All successful and competent entrepreneur for example Mrs J.K.
Rowling also are highly innovative and creative in their thinking. This is also an immensely
important trait as entrepreneurs are required to solve various problems and issues pertaining to
their entrepreneurial activities which require an inherently creative and innovative thinking on
part of the entrepreneur (Welter and et.al., 2017). The entrepreneurs are also required to apply
their innovative and creative thinking towards developing new and unique products and services
that are not readily available to the consumers in the external markets, only through which their
entrepreneurial venture can operate successfully within the consumer markets. Mrs J.K. Rowling
is highly innovative and creative.
Passionate: One of the most distinguishing characteristics or traits that separates successful
entrepreneurs like Mrs J.K. Rowling from organisational manager within a business organisation
is that successful entrepreneurs are highly passionate towards their operations. As
entrepreneurship is a hard business operation, being inherently passionate is one of the most
important traits that separates successful entrepreneurs from other managers. Mrs J.K. Rowling
is also highly passionate about writing.
Risk Taking: As the entrepreneurship operations requires the entrepreneur like Mrs J.K. Rowling
to undertake numerous significant risks and make vital decisions pertaining to their
entrepreneurial operations, being adventurous and risk taking is also extremely important for a
successful and competent entrepreneur (Blundel, Lockett and Wang, 2017). No individual or
manager can become a successful entrepreneur, if they shirk from taking on the risks that are
regularly associated with the entrepreneurial activities. Mrs J.K. Rowling took significant risk
towards writing and publishing her book.

Critical: All successful entrepreneurs such as Mrs J.K. Rowling are also highly critical of
themselves. They take critical reflections of the past risks and decisions they have undertaken,
assess why those risks and decisions resulted in their success or failure, in order to be better
informed and equipped to make the future decisions and take future risks in a successful and
productive manner. Mrs J.K. Rowling also was highly self-critical, which allowed for her to
assess her past mistakes.
P6 Evaluating How Aspects of the Entrepreneur’s Personality Have an Impact on Their
Entrepreneurial Motivation and Mind Set
The personality possessed by an entrepreneur has a significant and direct influence on
their entrepreneurial motivation metrics and their overall mind set. The entrepreneurship process
requires the entrepreneur to take on significant risks, make vital decisions daily in terms of their
daily operations, with these risks and decisions having a massive impact on the overall success or
failure of the entrepreneurial venture and the entrepreneur themselves. Due to this the
entrepreneur such as Mrs J.K. Rowling is needed to possesses a strong, tough, calm, creative,
adventurous and calculating personality through which they are able to effectively take on all the
risks associated with entrepreneurship and make vital decisions in a productive manner that is
also required of an entrepreneur on a daily basis (Burns, 2016). Only when the entrepreneur
possesses like Mrs J.K. Rowling a strong and adventurous personality can they possess high
motivation levels and possesses a positive mind set to undertake the immense risks and decision
making operations required of an entrepreneur in a productive and healthy manner. If the
entrepreneur possesses a timid, cautious and weak personality, then they would be unable to
conduct the vital decision making operations of an entrepreneur and undertake risks that are
required of an entrepreneur. This would result in the entrepreneur feeling increasingly
demotivated and possessing a negative mind set which would further hinder their
entrepreneurship operations and make it immensely hard for the entrepreneur to conduct their
daily decision making operations in an effective manner, which would contribute significantly
towards their failure as an entrepreneur. This is why all successful entrepreneurs for example
Mrs J.K. Rowling, are required to possess a tough, calm and adventurous personality only
through which they can possess high motivation levels and a positive mind set.

LO 4
P7 Analysing How Experience and Background of an Entrepreneur Hinders or Fosters Their
Entrepreneurship Operations Using Relevant Examples
The past experiences and background of an entrepreneur also has a direct impact on their
entrepreneurship operations, with these past experiences and background of the entrepreneur
having the potential to foster or hinder their current or future entrepreneurship operations in a
significant manner. This can be effectively showcased by using real life example of Mrs J.K.
Rowling who is one of the most successful and profitable entrepreneurs of the world and created
the fantasy novels Harry Potter and becoming the first author to have a net worth of over $1
billion dollars.
Improved Decision Making: The past experiences and background of an entrepreneur has
immense influence towards hindering or fostering their current and future entrepreneurship
operations. As decision making is one of the most important and vital responsibility of an
entrepreneur, their past experiences and background impacts their decision making abilities in a
very big manner (Chowdhury, Audretsch and Belitski, 2019). This can be showcased through the
example of J.K. Rowling who in her past experienced significant poverty in her early adulthood
years. This had an immense impact on her and influenced her decision when writing the Harry
Potter novels to base the protagonist of her novels as an orphan who possesses nothing. If J.K.
Rowling had not undergone this past experience then she could not have been able to make this
risky decision, which contributed immensely to her success as an entrepreneur, with the
character Harry Potter being relatable to vast section of her readers.
On the other hand, negative past experiences can also hinder the entrepreneurship
operations of an entrepreneur in a significant manner, which can also be showcased through J.K,
Rowling who actually gave up on writing novels after she suffered from a miscarriage, which she
was only able to overcome due to her tough personality.
CONCLUSION
Through the analysis of this report, it is concluded that the operations conducted by
entrepreneurs contribute significantly towards the economic growth and development of the

society in general. This report analyses the different forms of entrepreneurial ventures that are
designed and established by entrepreneurs. The report also evaluates the differences and
similarities between the diverse forms of entrepreneurial ventures. Then the report assesses the
impact that business organisations of micro and small size have on the economy of UK and the
significance that business organisations of small and micro size possess towards the social
economic growth of UK. The report evaluates the skills, characteristics and traits that
differentiate successful entrepreneurs from other managers within a business organisation and
analyses how various aspects of their entrepreneurial personality has an effect on the mind-set of
an individual entrepreneur. Finally, the report assesses how the experience and background of
any entrepreneur can hinder or foster their entrepreneurship operations.

REFERENCES
Books and Journals
Ateljevic, J. and Page, S.J. eds., 2017. Tourism and entrepreneurship. Routledge.
Blundel, R., Lockett, N. and Wang, C., 2017. Exploring entrepreneurship. Sage.
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
Chowdhury, F., Audretsch, D.B. and Belitski, M., 2019. Institutions and entrepreneurship
quality. Entrepreneurship Theory and Practice. 43(1). pp.51-81.
Frederick, H., O'Connor, A. and Kuratko, D.F., 2018. Entrepreneurship. Cengage AU.
Kraus, S. and et.al., 2019. Digital entrepreneurship. International Journal of Entrepreneurial
Behavior & Research.
Malecki, E.J., 2018. Entrepreneurship and entrepreneurial ecosystems. Geography Compass.
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Parker, S.C., 2018. The economics of entrepreneurship. Cambridge University Press.
Read, S. and et.al., 2016. Effectual entrepreneurship. Taylor & Francis.
Welter, F. and et.al., 2017. Everyday entrepreneurship—a call for entrepreneurship research to
embrace entrepreneurial diversity.