Entrepreneurship: Venture Types, Economic Impact & Mindset Aspects

This report provides a comprehensive analysis of entrepreneurship, exploring various venture types such as individual, partnership, and corporate ventures, and their relationships. It assesses the significant impact of small businesses on the UK economy, highlighting their contribution to job creation and economic growth, especially in the context of Brexit. The report also delves into the key aspects of an entrepreneurial mindset, differentiating successful entrepreneurs from business managers, and examines the effects of experience and background on entrepreneurial success. It emphasizes the importance of risk assessment, strategic planning, and adaptability in achieving entrepreneurial goals.

ENTREPRENEURSHIP
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Table of Contents
Introduction......................................................................................................................................3
LO1: Explore and illustrate the range of venture types that might be considered entrepreneurial. 3
Anatomy of Ventures and their relationship (P1)............................................................................3
Conformities and Distinctions between entrepreneurial ventures (P2)...........................................4
LO2: Assess the impact of small businesses on the economy.........................................................5
The significance of Small enterprises on Economy (P3).................................................................5
Explanation of importance and contribution of small businesses and business start-ups to social
economic growth (P4)......................................................................................................................6
Task 3: LO3: Determination and assessment of key entrepreneurial mindset aspects....................8
Differences between successful entrepreneurs and other business managers (P5).........................8
Assessment of aspects of entrepreneurial personality (P6)...........................................................11
Task 4: Examination of different environments............................................................................13
Effects of experience and background in entrepreneurship (P7)...................................................13
Conclusion.....................................................................................................................................14
Reference List................................................................................................................................15
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Introduction
Entrepreneurship is the part of taking new risk setting up a business. It is essential for economic
growth and development. Persons who think to start a new organization for independent work
must understand how to be a successful entrepreneur. Entrepreneurship includes taking the
proper initiative after making an environmental analysis to do something new in a competitive
environment. It enhances new business ventures that share a commitment to convert an idea into
a profitable business. It is also needed to know that for good entrepreneurship some techniques
should be known to reach the new customers correctly. Proper risk taking capacity can make an
entrepreneur successful. If high risk can be correctly implemented then higher rate of return is
assured.
LO1: Explore and illustrate the range of venture types that might be
considered entrepreneurial
Anatomy of Ventures and their relationship (P1)
Business ventures may be different type i.e. Individual venture, Venture in partnership and
corporate venture. Individual venture is a very simple type of business venture having a very low
risk due to its small size. Joint business venture is most popular. Sometimes it is called the
venture in partnership; on the contrary, there is a slight difference in a joint venture and in
partnership. Corporate ventures need some legal requirements, huge capital, a large number of
employees and very high risk taking capability. For successful corporate ventures, different
corporate strategies are adopted by an organization. There are so many organizational and legal
formations which are considered by an entrepreneur to achieve some predetermined objectives.
According to Schaper (2014, p.21), an important contrast among different types of business
ventures is the corporate venture which needs a long term planning. It is the key part of any
business enterprise. Corporate new business ventures are an essential part of the entrepreneurial
business world, provides numerous new innovations. It gets the power of autonomy to fulfill all
the requirements. As small scale business individual venture and as medium scale partnership
venture is suitable. The government of a nation should support different types of ventures mainly
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small scale individual and partnership ventures. As per UK economy perspective small
entrepreneurs are having good growth opportunity.
As stated by Wach and Wehrman (2014, p.9), strategically there is a relationship among different
types of venture organizations e.g. the formal relationship between field service partners with the
company off electricity industry provides people into a general alliance team. In a case of
outsourcing industries, beverage manufacturers and service company provides merchandising
and sales. If off shoring business is considered then it can be said an Australia-based company
provides service to UK clients. In such a way different enterprises are connected with other
organizations. This relationship may be within the country or globally. In today's globalised
business world, international connections among organisations of all the major business based
countries are gradually increasing. The partnership between government organization and a
private enterprise is a public-private relationship. A partnership sharing between two individuals
is also a connection to grow their business for providing better services to the customers.
Conformities and Distinctions between entrepreneurial ventures (P2)
Any types of ventures whether it is, individual, corporate or partnership risk is the common
factor. As stated by Carraher and Paridon (2015, p.89), if an entrepreneur cannot identify risks of
a new business then he can never be successful in the new start-ups. Besides, different strong and
weak points are needed to analyse. This is called ‘SWOT' analysis. This analysis provides the
information to an entrepreneur to take strategic planning regarding a new business. In case of
each entrepreneur, efficiency and effectiveness are vital parts. As per Drucker (2014, p.53) if
business ventures cannot be run efficiently and effectively then success can never be achieved.
For effectiveness, own initiative is mandatory part and along with these different elements of
production must be integrated accurately so that desired outcome can be achieved very easily.
Proper initiative is to be taken in such a way so that target can be fulfilled. On the contrary
corporate business ventures need long term planning and huge amount of capital while other two
ventures need little capability. Individual venture is best for small scale business, basically for
UK economy. Besides Individual business venture does not require any long-term legal
procedures while partnership and corporate ventures must comply with the legal processes.
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Capital is the vital factor mainly for corporate ventures. Different strategies are also required to
be adopted for partnership and corporate enterprises but it is little for individual business.
LO2: Assess the impact of small businesses on the economy
The significance of Small enterprises on Economy (P3)
As per data regarding UK economy, there are 5.4 million small private business enterprises in
the year 2015. In the year 2016, 1,50,000 enterprises are added with that amount
(smallbusiness.co.uk, 2016). UK government is supportive regarding the expansion of small
scale business which creates new employment opportunities. If the number of business compared
since the year 2000, then it can be cited that 1.9 million has been increased and this has been a
remarkable addition (smallbusiness.co.uk, 2016). A government initiative along with individual
initiatives enhances to grow the businesses. This initiative creates growth opportunity and
ultimately a business can flourish internationally. In terms of data, it can be said that Growth
perspective for small business is very high in UK economy (smallbusiness.co.uk, 2016). If new
entrepreneurship is assisted in any country by the government positively then it reveals a sign of
huge growth in future. A small business first competes in domestic market and day by day it can
grow positively. Finally, when it will earn huge amount of revenues, it will try to increase the
business internationally. In such a way small scale organization can improve the economic
growth of a country. A small and medium scale business can ensure rapid growth of the domestic
economy which changes the lifestyle of a nation. It is possible in UK economy because UK is
having lots of opportunities to start and grow small business enterprise which reveals in the
growth trend in UK economy. If systematic strategies can be taken then it is easy to mobilize the
economic growth of a nation.
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Explanation of importance and contribution of small businesses and business
start-ups to social economic growth (P4)
Ács et al. (2014, p.483) have mentioned that the exit of Britain from the European Union, also
known as ‘Brexit’ has made headlines all over the world. The UK government, as well as those
who voted for it, is of the opinion that Brexit has a severe long-term impact on economic growth
of that region. Those impacts are expected to be positive, as the UK wants sole control over its
market without interference from other countries. Other important reasons include an attempt to
restrict the overwhelmingly large number of immigrants into the country, as well as to bypass
several types of trade restrictions. Main aims also include implementation of policies that enable
restriction of low-level workers and attract high-level workers to the labor market.
Observations made by Baum et al. (2014, p.92) have indicated that following Brexit, it is
expected that overall market of Britain will be more or less fluctuating in the coming years.
Businesses, especially small and medium-sized businesses, are expected to be important in the
coming years as well. It is no secret that these businesses and business start-ups of these kinds
are already very vital parts of the overall economic growth of Britain. Their importance may
become even more pronounced in the coming years.
According to Bruni et al. (2014, p.87) it is a known fact that small businesses do not generate as
much revenue as their larger multinational counterparts. However, they are very crucial
contributors to the strength of distinct levels of an economy like local and national economies.
They are the providers of a large number5 of employment opportunities, which is expected to
come in very handy in the time period immediately following Brexit. This time period covers the
present era, and their importance in this regard also makes them overall building blocks for their
larger counterparts in business.
Carland et al. (2015, p.19) have mentioned that they represent a vast majority of all employer
firms, and have been observed to generate nearly 64% of overall new jobs. Social economy deals
with non – governmental organizations, as well as humanitarian organizations such as charities
and donation parties. Observations regarding small businesses have made it abundantly clear that
they are the main providers of jobs for people who do not for the government or any government
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based entity. Thus, it is clear that social economy requires the growth of small businesses in
order to grow as a sector itself.
Since small businesses and start – ups of similar nature are among the leading contributors to the
field of generation of new jobs, they are expected to aid in the growth of new jobs and entities of
social economy as a whole as well. Smaller sized businesses contribute very deeply to the growth
of local economies because they bring in growth as well as innovation to local communities of
particular regions. People who generally fail to find employment in large corporations or
government offices often find employment and job opportunities in these businesses. Thus, the
UK is a very reliable and safe place for starting any venture of this kind. The overall platform
provided by the current scenario of Britain has made it easier and better to start new
entrepreneurial ventures that are not aimed for expansion into global dimensions.
According to Carland Jr et al. (2015, p.63) another feature of these kinds of ventures is their
immense ability to change and adapt to nearly all kinds of circumstances, regardless of how
drastic the changes are. Businesses of this scale are generally oriented according to their
customers and their demands, so their overall structure is formulated accordingly. Any changes
that are extremely sudden, such as most changes of social economy, are met accordingly. Most
small business ventures are able to adapt to these changes extremely quickly, and this ensures a
very loyal customer base. This loyalty from their targeted customers as well as their flexibility in
adapting to any kind of situation help them stay afloat in times of economic crisis.
One of the main reasons that small businesses play crucial roles in contributing to social
economic growth is their immense scope for growth. Since they are able to grow and adapt
according to social and national circumstances fairly quickly, they are important contributors to
the overall social economy of Britain, especially following Brexit.
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Task 3: LO3: Determination and assessment of key entrepreneurial mindset
aspects
Differences between successful entrepreneurs and other business managers
(P5)
Castello et al. (2016, p.79) mentioned that entrepreneurs mainly differ from business managers
in their ways of thinking. James Dyson and Simon Cowell are two successful entrepreneurs
based in Britain. They have managed to achieve great and lasting success in their fields of
interest, primarily due to their passion as well as their willingness to go to extra lengths for
completing their work. They displayed a high level of courage under tiring and distressing
circumstances. Their courage was also one of the traits that allowed them to open their business
ventures in the first place.
Drucker (2014, p.77) has observed that Dyson is a great engineer who managed to give a shape
to his dreams when he went through with developing better vacuum cleaners. His passion for the
development of the best possible vacuum cleaners led to him implementing his innovative ideas
to a whole new level. His creations, such as Dyson Ball and Dual Cycloner vacuum cleaner, have
attracted significant interest from successful people and investors alike. His main traits are the
ability to improvise and innovate, for he was able to take and existing item and innovate it in a
way that enabled it to become even more efficient.
Cowell earned his fortune as a producer in television. He worked for a company named EMI
Music Publishing, before eventually going up the ranks. His success led him to eventually break
away from that company and subsequently create his own. His company went on to become one
of the leaders in the music industry. His interest in television led to him being involved in
various ventures of TV, which in turn contributed to his already immense fortune. His most
defining traits are his tendency to be brutally honest, and his bravery in going through with his
ideas regardless of what other people think about him.
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Figure 1: Managerial way of thinking
(Source: Glaeser et al. 2015, p.518)
According to Glaeser et al. (2015, p.518) studies regarding the two aforementioned successful
entrepreneurs clearly, indicate that they think in a manner that is different from average business
managers. Most managers use a way of thinking that is based on casual reasoning. They are able
to formulate strategies and tactics that are based on existing methodologies that have already
been observed in past scenarios. They use existing strategies for different circumstances; they
just decide which tactic is best for implementation during certain situations.
Entrepreneurs, including the ones mentioned before, have a way of thinking that is specifically
termed as effectual reasoning. They evaluate all features of a product or a circumstance to the
fullest. They look for even the tiniest details since they know that the inspiration for an idea can
come from virtually any source. Evaluation of the uniqueness of a field or product where they
want to implement their ideas leads to them properly assessing the advantages and disadvantages
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attached to them. They thus gain a very good idea regarding the best possible use of resources
under different circumstances.
Figure 2: Entrepreneurial way of thinking
(Source: Glaeser et al. 2015, p.518)
Green and Smith (2013, p.1) have stated that another criterion where they differ from general
business managers is their higher level of willingness to take risks. While it is true that managers
are also known to take risks, their level of risk-taking pales in comparison to that of
entrepreneurs. Entrepreneurs like the aforementioned have taken risks that could have potentially
been catastrophic for them in the long run, a decision that business managers are generally not
known to take. Business managers generally set their objectives based on tangible goals while
clearly determining the most effective course of action. On the other hand, entrepreneurs are
known to chart their own path after careful observation, and once they have decided that they
will go down a certain path, they do so without any kind of fear regarding the potential risk of
the situation. Simply put, entrepreneurs are better at creating and implementing a new vision,
whereas managers are generally good at overall execution.
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Assessment of aspects of entrepreneurial personality (P6)
According to Hart et al. (2015, p.96) different aspects of the personality of entrepreneurs are
affected by several different factors. These factors include upbringing, differences in culture,
environment, and surroundings while growing up, personal background as well as the amount of
experience they have in different situations. It is obvious that personal background and
experiences have played a very important role in motivating a person towards his or her goals.
Their mindsets are shaped by their own relevant experiences, as failures in a field can lead to
them studying the main reasons effectively to prevent future failures. Similarly, factors and
reasons of successes are researched thoroughly for further implementation in the future, and
modifications to them are made with the aim of increasing their already proved chances of
success.
The aforementioned entrepreneurs have been observed to act based on their passion. their
willingness to follow their passion since an early age enabled them to innovate and implement
significant designs that have led to their immense success. Dyson had a great interest in
innovations and machines, especially the vacuum cleaner from a young age. Growing up in a
family that cannot be classified as very rich, he observed the usage of various gadgets from a
very young age. In particular, the vacuum cleaner interested him the most. He became
determined to modify it in a way that can enable even more efficient usage.
Kirzner (2015, p.81) observed that his determination and passion for innovating his ideas led to
him working on the same as an adult. A distinct feature of his that becomes prominent from these
observations is the fact that he had the courage as well as mental fortitude to actually go through
with it. His interest in gadgets and innovations led him to explore other avenues as well. He is
also known for other inventions such as HEPA-filtered hand dryers and bladeless fans. These
innovations and inventions led him to become one of the most prodigious inventors of his time,
and his smart entrepreneurship in dealing with his inventions played a big role in him becoming
a billionaire. Thus, his personal experiences and background, along with his upbringing led to his
eventual success as an inventor, innovator, and entrepreneur.
Cowell, on the other hand, earned and worked his way to the top. His initial job was that of
working in the mail room of a company named EMI Music Publishing. His time and experiences
there led to him developing a proper understanding of the music industry and eventual the
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television industry as a whole as well. His hard working nature, background, as well as the fact
that he has experienced working at nearly all levels of a company, helped him develop a no-
nonsense attitude. He developed into a person displaying brutal honesty.
As stated by Schaper et al. (2014, p.82) it is abundantly clear that his motivations to open his
own company stemmed from his passion for the television industry as a whole. His experiences
in another company prepared him for all the risks and potential situations that he would have to
deal with in his own company. His observant nature, which is a hallmark of all successful
entrepreneurs, helped him in assessing the good and bad marketing tactics. These helped him
develop his own company, which, coupled with his knowledge, went on to become a major
player in the music industry.
Storey (2016, p.85) has stated that main factors of motivation have been observed to arise from
them observing certain facets and aspects of their surrounding environment. These aspects and
factors had a deep impression on them, and they strove to implement their own ideas into them.
For Dyson, vacuum cleaners and other gadgets provided him the motivation to create even more
modified versions of them so as to make their use even more handy and comfortable than it
already was. Similarly, Cowell, whose passion for television continues to this day, observed the
good and the bad about the tactics and strategies implemented by the company that employed
him, and incorporated them into his own distinct vision for a successful enterprise. Thus, main
aspects of entrepreneurial personality are observant nature, passion, courage to take relevant
risks and innovative minds.
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Task 4: Examination of different environments
Effects of experience and background in entrepreneurship (P7)
As stated by Stuetzer et al. (2017, p.9) the examples of Dyson and Cowell are clear enough in
stating the importance of background and experience to entrepreneurship. Both of them
experienced times which enabled them to go through with their tasks at later points of their lives.
Their personal backgrounds of belonging to households that were never very rich, coupled with
their own passion enabled them to understand all aspects of people belonging to middle-class
societies. Since they were both born into such households, both understand the meaning of labor
and the value of money. They both developed a passion for a field at a young age.
A common feature here is that their personal backgrounds enabled them to come in direct contact
with their fields of passion in the first place. A common personality point that they both share is
being determined to complete what they set out to do. Their personal background thus helped in
broadening their minds to incorporate a wider view of their surroundings, which turned out to be
immensely beneficial in their success as entrepreneurs later in their lives.
Schaper et al. (2014, p.82) have observed that their experiences helped them immensely in most
cases as well. Cowell’s experience as a worker in a company helped him in getting a better
appreciation of all levels of employees in a company. It also exposed him to the working
methods of companies in the music industry, which in turn helped him in developing better
marketing and producing strategies for his own company down the road. His continued passion
is also a result of his experiences, as he gained a better understanding of the industry he is so
passionate about. To this day, he continues to be involved in the television industry.
According to Hart et al. (2015, p.96) Dyson’s experiences also helped him in developing his
innovations. His experiences in failing at creating his desired prototypes illuminated him to the
path he eventually had to take to create a successful prototype. His determination actually
enabled him to succeed time and time again. He has always acknowledged the fact that his
experiences with failure, as well as his experiencing his father's death at a relatively early age,
enabled him to succeed eventually. He took those sad experiences as a lesson and took
inspiration from them to formulate methods that enabled him to succeed as an inventor and
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entrepreneur. He went on to be the founder of his own company, the Dyson Company, which is a
major organization of its type in the market.
Conclusion
It is concluded that entrepreneurship is indeed beneficial for overall growth and development of
the economy. The fact that countries that have managed to achieve a drastic reduction in poverty
over the last few years reinforces this fact. Small business ventures and business start-ups of their
types are among the most significant contributors to the growth of social, as well as overall
economic growth. These businesses have been observed to be significant contributors towards
the generation of jobs and reduction of employment rates in Britain. Successful entrepreneurs
share a few common traits, such as observant natures and the determination to succeed regardless
of potential risks. Hence, it is concluded that personal experiences and backgrounds shape
personalities and working methods of entrepreneurs and directly affect their ventures.
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