Entrepreneurship and Small Business: Ventures, UK Economy Analysis

This report delves into the multifaceted world of entrepreneurship, examining different types of entrepreneurial ventures, including small businesses, scalable ventures, large businesses, and social entrepreneurship, along with their typologies. It provides an analysis of relevant data and statistics to illustrate the impact of micro and small businesses on the UK's economy, highlighting the growth in numbers, employment, and turnover within these sectors. The report further emphasizes the importance of small businesses and start-ups in fostering social factors such as employment creation, innovation, and local benefits. It distinguishes the characteristics and traits of successful entrepreneurs from those of managers, exploring the impact of an entrepreneur’s personality on motivation and mindset, and the influence of their background and experience. The report also discusses the similarities and differences between various entrepreneurial ventures. The report's conclusion emphasizes the importance of entrepreneurship in economic growth and societal development.

ENTREPRENEURSHIP
AND SMALL BUSINES

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO 1.................................................................................................................................................3
P1 Different types of entrepreneurial ventures and their relation to typology............................3
P2 Similarities and differences between entrepreneurial ventures..............................................4
LO 2 ................................................................................................................................................6
P3 Analysis and interpretation of relevant data and statistics illustrating impact of micro and
small business on UK's economy.................................................................................................6
P4 Importance of Small businesses and start-ups for growth of social factors in an economy...9
LO 3...............................................................................................................................................10
P5 Characteristics and traits of successful entrepreneurs differentiating them from managers.
....................................................................................................................................................10
P6 Impact of an entrepreneur’s personality on his motivation and mindset with which he
works..........................................................................................................................................11
LO 4...............................................................................................................................................12
P7 The impact of an entrepreneur's background and experience in hindering ad fostering
entrepreneurs..............................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Entrepreneurship as per Schumpeter, can be defined as an act of setting up an new business
with an innovative idea which has not been grasped by the entire market i.e. it is not ordinary or
routine in nature. Since the idea is new, here is an extremely high risk factor. The person
beginning a new venture is called an entrepreneur who bears all the risks and begins a new
venture with the sole purpose of making it successful. In this report, the two entrepreneurs Bill
Gates and Howard Schultz have been taken for studying the entrepreneurial characteristics. This
report highlights the different entrepreneurial ventures and their typologies along with the
similarities and differences between these ventures (Espedal, 2017). Further, this report will
evaluate the various data and statistics provided for interpreting the rising number of
entrepreneurs and their contribution in the economy of UK. Further the importance of these start-
ups has been discussed and the traits of successful business have been assessed so that their
motivation and mindset can be studied. Lastly, this report will also discuss about the struggles
faced by the two entrepreneurs and how their background played a significant role in shaping
their growth.
MAIN BODY
LO 1
P1 Different types of entrepreneurial ventures and their relation to typology.
As per Lavington, an entrepreneur, in modern time, can adopt different manners of
operating i.e. he can be in partnership or as a private firm; joint company or a cooperative etc.
Lachman is an another entrepreneur who started an entirely new venture in Israel along with 29
other males only. He stated that en entrepreneur is a person who with a unique combination of
production factors, can open a unique brand. Stauss on the other hand argued that a firm is also
an entrepreneur. Say is another philosopher who defined entrepreneur as an agent uniting all
production means and re establishing the value in his products. Joseph Schumpeter was a
political economist who later became a professor at Harvard University and gave the important
concept of Creative Destruction.
Entrepreneurship Ventures are the above mentioned categories of different kind of businesses
that an entrepreneur can operate having different scope and risk-return level. There are four types
of entrepreneurial ventures namely :- Small business, Scalable, Large business and Social
Entrepreneurship. Small Sized Entrepreneurial ventures signify those ventures having which
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operate on a smaller scale and are usually owned by a single person (Glass and Cook, 2016).
There is an increasing number of such small scale entrepreneurs and they make a major
contribution to the growth of UK's economy. These are service providers, cafes, stores etc.
Simple Funeral is a small scale entrepreneurial venture in UK.
Scalable Ventures are those types of ventures under which at initial level operate at a smaller
level but the entrepreneur has an objective to maximize the venture further. Tesco, Marks and
Spencer are examples of these types of ventures.
Large Business Ventures include those kind of social ventures which are formulated with an
ideology which can help them in expanding all over the world ad bring a revolution and change
in the way world operates. Microsoft, Google etc. are a few companies that fall under this
category.
Social Entrepreneurship can be defined as those ventures which are operating with the aim of
providing and assisting individuals in an innovative manner (Neumann, James and Vince, 2019).
Their focus is on reaching out to maximum people through their work so that majority of them
can be assisted. NHS is the best example of a social entrepreneurship operating at such a large
scale in UK.
Typologies of Entrepreneurship :- typology refers to the purpose of existence of an
entrepreneurship I.e. the motive with which it is set up. Survival Firms :- The basic aim of these
firms is to not get shut down i.e. keeping their business running ids the main focus point.
Lifestyle Firm :- These are set up with the aim of generating reasonable income and the
entrepreneurs avoid risk factor by avoiding the expansion and growth of firm. Managed Growth
Firms :- Here the entrepreneurs expand at a normal i.e. moderate skill level and rather than
concentrating on expansion at extreme levels, they focus on a slower and steadier growth.
Aggressive Growth Firms :- Here, focus is on expansion of business through implementation of
pre formulated strategies and plans (Lopez and Wise, 2015). They might sometimes take
decisions which affects the business in a negative manner and creates a loss making situation.
Public Sector Entrepreneurship :- Under this, the business is set up with the idea of providing
services to the common people working for their benefits thus improving the economy as well.
P2 Similarities and differences between entrepreneurial ventures.
Differences between entrepreneurial ventures :-
Basis Small Size Scalable Large Size Social Ventures
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Ventures Ventures Ventures
Structure of the
entrepreneurship
There is no
definite
organisational
structure and
format but
majority of times
these are owned
and operated by a
single person or a
group of persons
(Al Barwani,
Flores and Imig,
2018).
These kind of
entrepreneurship's
operate in
complex
structures and
formats and can
be seen as the
ones operating in
a public limited
or private limited
firm.
The are spread
over a vast
customer base
and complex
structures exist in
this environment
which are
formulated in
public or private
limited company
format.
Here, the
structure is not
the main focus
point and
emphasis lies on
providing
services to the
people. This is
generally done
through NGOs or
trusts, working
towards
improving the
lifestyle of public.
Risk Level and
Competition
Level
In these types of
ventures, risk is
comparatively
much lower and
though the
competition that
they face is
domestic in
nature yet it is
fierce as there are
many
entrepreneurs
working at this
level.
Here Risk lies
between moderate
to high as the
venture might
succeed during
the time of
expansion, but
there is also a risk
of failure which
might arise due to
poor decision
making. Also, the
competition
increases as their
level of operation
The risk in these
kind of ventures
is very high as
their success
factor is based
entirely on one
basic idea and it
might or might
not succeed
(Dudar, Scott and
Scott, 2017).
However, once
the organisation
succeeds, the
competition level
The risk level lies
between medium
to low as their
main aim is not
generating profits
but reaching out
to maximum
umber of
customers and
providing
services to them.
But the
competition level
id high as there
are large number
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increases. faced by them is
much lower as
they emerge as
superpowers who
cant be
conquered.
of NGOs and
trusts operating
with the same
purpose and it
might get difficult
for one particular
NGO to standout.
Similarities between entrepreneurial ventures :- All the entrepreneurial ventures work with the
basic aim of succeeding in the competitive industry by providing certain innovative practices and
services. Small sized and social entrepreneurship don't have profit as their main objective but
rather survival is the best strategy according to them (NHS England, 2016). Thus while
innovation is the core entrepreneurial ventures, scope and risk level act as differentiation factors.
LO 2
P3 Analysis and interpretation of relevant data and statistics illustrating impact of micro and
small business on UK's economy.
As it is relevant from the above data, in micro businesses there has been a steady rise from year
2010 to 2017 with all the three factors i.e. their number, employment and turnover have
increased. However the rise in their numbers has almost been double but the turnover has not
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shown the growth matching the numbers. On the other hand, the employment level has increased
in a stable manner according to the rise in number of micro businesses.
The small sector entrepreneurs have seen a rise in all the three factors but at a steady pace i.e. the
increase in their number is equivalent to the rise in the employment levels that they are providing
and in the turnover level in UK's economy from year 2010 to 2017.
Chart depicting count, employment and turnover figures in both the sectors:-
Micro business in UK –
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Small business entrepreneurs in UK -
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P4 Importance of Small businesses and start-ups for growth of social factors in an economy.
It is mandatory for all the entrepreneurs and start-ups to evaluate the present market
scenario and the current market conditions and they should be aware of all the present market
situations (Doppelt, 2017). This helps them in analysing the trends and changes occurring in the
market which give them the ideas required for benefiting the society. The entrepreneurs can
adopt innovative policies so that it helps in increasing the prosperity of the business and it also
enhances the welfare and encourages growth. There are many additional points which are
working towards the welfare of society :-
Employment creation :- When a new business is formulated, there are many employment
opportunities that are generated. This helps is increasing the number of employed individuals in
a society thus increasing their living standards as the income is increased.
Innovation :- Whenever a new entrepreneur sets up any business, he comes with a novel or new
idea. And this one idea leads to creation of a lot of new ideas and fields based on the
requirements of the targeted customer base. This also helps in improving the efficiency and
effectiveness of present practices that have been adopted in the market (Neumann, James and
Vince, 2019).
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Local Benefits :- While setting up a new business, the locality in which the business is set up
gets hugely benefited as it makes the locality prosper and foster under the newly generated
income source. If the present business becomes successful, then living standard also increases.
Social Purpose :- When a new business is established by an entrepreneur, it also presents
certain responsibilities that he is required to fulfil like performing CSR activities etc. This helps
in solving various issues that the society is facing at present.
Integrating Diversity :- The entrepreneur with his newly set up business, needs to appoint
workers and by preferring the intelligence level over the background status of an candidate, they
can help in generating a well distributed income in the society and bridging the cultural gaps.
LO 3
P5 Characteristics and traits of successful entrepreneurs differentiating them from managers.
The basic difference between a manager and an entrepreneur is that an entrepreneur is
the owner of the business which he sets up bearing the risks that are associated with their
business and working with a sole aim of expanding their business (Rossi, 2019). A manager on
the other hand is an employee who is not concerned with any risk and takes a regular amount
called salary in exchange of his services provided. Bill Gates and Howard Schultz are two
entrepreneurs who can be taken as an example for studying the importance of preserving attitude
they must have in order to succeed. The various characteristics and traits that are necessary in a
successful entrepreneur can be outlined as follows :-
Characteristics :- An entrepreneur must be motivated and ready to take risks for establishing his
new business in the market. And they must be passionate about their goals and objectives
focusing on his business idea despite the various obstacles presented before him (Nelson-
Brantley and et.al., 2018). A manager on the other hand is not concerned with success of
business and he need not take any risks or challenges. An entrepreneur has to be flexible so that
he can easily adapt himself to the changes and manger is only concerned with implementing
what the top level has directed him to do.
Traits :- An entrepreneur must possess strong working ethics in order to succeed. He must be
ready to always go an extra mile in order to achieve his goal and should be present round the
clock for his business to become successful unlike manager who is responsible for the business
activities only up to the time he is in the office premises. An entrepreneur must also be very
creative and innovative in his ideas so that he can easily grasp the recent changes and trends
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which can be implemented in the organisation. And a manager on the other hand need not have
any extra traits and he has to perform only what the top management directs him to do (Wylie
And et.al., 2017).
P6 Impact of an entrepreneur’s personality on his motivation and mindset with which he works.
For determining the different aspects of personality that an entrepreneur must possess in
order to become successfully, OCEAN model of behaviour can be applied. This model gives 5
major characteristics which the entrepreneur should work on developing so that he can compete
in the market and excel. Openness refers to the level of curiousness that an individual has
regarding their surroundings and other activities as compared to the people having limited
knowledge and those who do not wish to expand. It is necessary for an entrepreneur to be highly
curious as this will help him in generating ideas which might make his business successful.
Conscientiousness is the second trait that evaluates the tendency of an entrepreneur to be
disciplined and regulated as compared to the spontaneity in his actions i.e. the quickness change
in plans upon changes in the situation (O.C.E.A.N Model of Personality, 2015). The third trait is
Extraversion which refers to the ease with which an individual is able to converse with others
and adjust with them as opposed to those individuals who shy away from talking and are
introverts in nature. For an entrepreneur to be successful, it is necessary that he is able to
converse with others in an easier manner. The fourth trait is Agreeableness and this defines how
easily an individual is capable of getting along with others and the general liking for them. It is
compared to the disagreeable individuals who are more concerned with fulfilling their own
interests rather than getting mingled with others. It is essential for an entrepreneur to easily
adjust themselves as per the behaviour of others which will helps them in understanding that
person quickly and this form the relations that is necessary for them. The last trait is
Neuroticism and it refers to the emotional stability or instability that a person has (Glass and
Cook, 2016). When a person gets easily affected by small incidents occurring in daily life and
takes them negatively, he is bound to be a failure as an entrepreneur as they have to face a lot of
difficulties before finally achieving success.
Hence it is necessary for entrepreneurs to develop the above skills and traits in order to
develop a mindset that will help in success of an entrepreneur.
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LO 4
P7 The impact of an entrepreneur's background and experience in hindering ad fostering
entrepreneurs.
The background of an entrepreneur formulate the behaviour that an entrepreneur adopt when he
faces various difficulties and challenges in making his business successful. This can be studied
by taking case study of the two entrepreneur's Bill Gates and Howard Schultz (Emanuel and
et.al., 2015).
William Henry 'Bill' Gates is the founder of Microsoft Corp. when he was younger, Bill gates
was bullied by his class mates and other older boys from his school. This made him shy away
from talking to anyone and he would often give the reason that he is thinking when his parent
were concerned. His family wanted him to pursue a career in law and implemented a system of
penalty and rewards when he succeeded and failed respectively. He developed a first program for
a play game and he observed that it was highly praised. This motivated him and the fascination
for machines made him develop more programs and software. This finally led in developing of
Microsoft Corp. which now makes him the second most rich person in the world having net
worth of $95.4 billion.
Howard Schultz, an American businessman and a multi billionaire; he is chief executive of
Starbucks. When he was younger, Schultz wanted to become a football player but later, he went
to college by taking loans and working part time to pay for the fees of his college (Espedal,
2017). He was the first person in his entire family to attend college and after graduating, he
changed a number of jobs. Schultz once visited a Starbucks shop and was impressed by their
coffee and decided to convert it into a cafe which ultimately led to a multi store chain and
created a net worth of $3.7 billion making Schultz the 232nd richest man in the world.
CONCLUSION
After going through the research conducted in the above report, it can be concluded that the
small businesses and entrepreneurs are heavy contributors in the employment generation in UK
and form a major part of the economy. They have impacted the country in a positive manner and
helped in improving the living standards. Also, this report applied OCEAN theory to determine
the personality that an entrepreneur must have in order to succeed and the difference between a
manager and an entrepreneur has been highlighted thus removing the ambiguity. Lastly, this
report also concludes that despite many challenges that an entrepreneur is bound to face, the
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