Entrepreneurship and Small Business Management Report - Unit 17, LCCA

This report provides an in-depth analysis of entrepreneurship and small business management, exploring various types of entrepreneurial ventures including small businesses, scalable startups, large companies, and social enterprises. It examines the relationship between entrepreneurship typologies and different venture categories, comparing organizational objectives, risks, and employee numbers across venture types. The report assesses relevant data and statistics to illustrate the impact of micro and small businesses on the UK economy, including employment and turnover trends from 2010 to 2017. Furthermore, it explains the significance of small businesses and startups in fostering social and economic growth, referencing the importance of the social economy. The report incorporates definitions from various scholars, including Schumpeter's concept of "creative destruction", and concludes with a discussion on the importance of small businesses for the social economy and their contribution to the UK's financial landscape. The report is based on a unit assignment for London College of Contemporary Arts (LCCA) Unit 17: Entrepreneurship and Small Business Management.

Running head: REPORT 1
Entrepreneurship and Small Business
Management
(Student’s details)

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Executive Summary
The following written report describes about entrepreneurship and small business management,
types of business and entrepreneurial ventures, entrepreneurship typologies, comparison among
entrepreneurial ventures and importance of business startups and small businesses for the social
economy. Entrepreneurship and small industries are very helpful and significant for financial
change of the country.
The following report describes that how different forms of entrepreneurial ventures impacting
the economic growth of UK. Small business entrepreneurship, scalable startup business, social
enterprises and large company are main entrepreneurial ventures. It also includes the statistic
data which analyses the effect of micro and small businesses on the economy.

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Contents
Introduction......................................................................................................................................4
Different Categories of entrepreneurial ventures and the relation between entrepreneurship
typology and entrepreneurial ventures.............................................................................................4
Categories of Entrepreneurial Ventures.......................................................................................4
Small business entrepreneurship..............................................................................................4
Scalable startup entrepreneurship.............................................................................................5
Large company entrepreneurship.............................................................................................5
Social entrepreneurship............................................................................................................5
Entrepreneurial.........................................................................................................................5
Intrapreneurs.............................................................................................................................6
Managerial................................................................................................................................6
Prospector.................................................................................................................................6
Defenders..................................................................................................................................7
Analyzers..................................................................................................................................7
Followers..................................................................................................................................7
Comparisons between entrepreneurial ventures..............................................................................7
Organizational objectives and goals............................................................................................7
Risks.............................................................................................................................................7
Number of employees..................................................................................................................8
Effect of micro and small size businesses on the economic condition of country..........................9
Why small size businesses and business start-ups are important for the social economic growth13
Conclusion.....................................................................................................................................13

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Introduction
The entrepreneurship and small business management motivate and encouraging individuals to
begin an innovative business and grab the opportunities of work in small businesses. It helps in
perceiving work alternatives in small businesses and aids them to spread information of
entrepreneurship and furthermore in building up the skills and methods of business or venture
management (Lee- Ross & Lashley, 2010).
Garfield (1991) defined, the individuals who build up a specialty in the market or build up a
technique to fulfill some need are likewise, called entrepreneurs. Steveson (1988) defined,
Entrepreneurship is a term which has been used to explain a huge range of actions for example,
creation, establishing, adjusting and dealing with the endeavor. No single control gives the
devices to dealing with entrepreneurial venture. Gartner (1985) defined; the term entrepreneur
has frequently been connected to the founder of business or an individual who began a new
business where there was none previously (Cunningham & Lischeron, 1991).
Schumpeter (1965) defined “entrepreneurs as persons who adventure market opportunity by
organizational and technical innovation” (Dicle University, 2011).
Different Categories of entrepreneurial businesses and the relation between
entrepreneurship typology and entrepreneurial ventures
Categories of Entrepreneurial Ventures
Many authors divide entrepreneur in many ways according to their studies and experiences. S.
Blank (2010) classifies entrepreneurs in four ways which are small, scalable, large and social.
These different types of entrepreneurs called as entrepreneurship typology.
Small business entrepreneurship
In today’s time, most of the people are doing small business. In United Kingdom, 99% of all
businesses are small business. This sort of businesses must be controlled by owner and in this
kind of business; employees count is very less, usually 0-9. Small businesses not generate higher
revenue but their main focus is getting more customers and sells their products and services

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(Drucker, 2014). Grocery stores, hairdresser, carpenters, consultant, plumbers etc. are the main
examples of small business entrepreneurship.
Scalable startup entrepreneurship
Scalable startup business stars with the new innovative ideas and usually this type of companies
and organizations provide unique products which attract customers. The main target of these
types of companies is to change the world with their innovative ideas. Scalable startup
businesses attract investors and they need employees who think very innovatively. Entrepreneurs
of these organizations search for high investment from big ventures because they need extra
investment in their innovative and technical ideas. Online shopping platforms, Instagram,
Facebook etc. are examples of scalable startup business.
Large company entrepreneurship
As the name suggests, these types of organizations have large size regarding products,
employees and customers. But in UK, large companies are very less as compare to other type of
companies and organizations. Large companies earn profit by offering new type of products and
services with new innovations. They make products according to trends and customer needs.
Large companies need advanced technology to develop the business. Microsoft, Google, Apple
etc. are examples of large companies.
Social entrepreneurship
Social entrepreneurships mainly work for society. Their main focus is to offer products which
make better world. They provide such services which solve the problems and fulfill the needs of
society. These types of organizations can be non-profit organizations, business firms or hybrid
(Scarborough, 2016).
Wennekers and Thurik (1999) classify entrepreneurs in three types in their model which are
entrepreneurial, intrapreneurs and managerial.
Entrepreneurial
An entrepreneur is one who initiates and continues a business at small level with constrained
resources and planning, and is in charge of the significant number of rewards and risks of
business venture. Business idea for the most part includes a new product or service as opposed to
a recent plan of action. Entrepreneurs work with innovative ideas to create a new product.

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These entrepreneurial ventures aim exceptional returns with similarly high level of insecurity.
The entrepreneur is eager to risk his budgetary security and profession, investing energy just as
capital on an undefined venture, arranging the raw materials, vital capital, manufacturing areas
and talented representatives. Marketing, distribution of products and sales are other significant
perspectives which are constrained by the entrepreneur (Burns, 2010).
Intrapreneurs
Intrapreneurs are employees who work for the entrepreneurial ventures. Intrapreneurs are mostly
proactive, self-motivated and task-oriented people who take decisions and initiatives very easily
within the organization structure, to create products and services innovative. A highly skilled
intrapreneur constantly pays attentions to the specific matters and his work is to include the
company process rather than the complete business.
An intrapreneur is able to give some innovative ideas to serving a good situation for the business
by providing products and services. Intrapreneurs want freedom and independency in work as
they are efficient to developing and creating charts of workflow and they can compete in market.
Managerial
Intrapreneurs and entrepreneurs usually found in the small firms including franchisees and
shopkeepers. The employee of an organization who manages other people who are working in
the organization is called the managerial business owner. Basically they are paid employees and
workers who have authority to make any changes and take any decision in the organization with
approval on priority.
Miles & Snow (1992) also classify entrepreneurs in four types which are prospector, defender,
analyser and follower.
Prospector
Prospectors are innovative organizations which always looking for fresh market opportunities
and growth. They like to do new experiments with trends which can affect business both ways
positive and negative. Their main concern is product or service which gives by organization and
creates innovative market.

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Defenders
Unlike prospectors, defender organizations are not seeking for new market opportunities. They
always look that how they protect their organization from any risk. These types of organizations
have highly expert managers who focused on adjustments in the organizations.
Analyzers
This type of organizations operates their business in two ways; one is stable and second is
changing. Stable organizations operate their business efficiently by formalized processes and
structures. Top managers of these organizations keep an eye on competitors and make changes in
organizations.
Followers
Followers are also known as reactors. This type of organizations adapts changes very quick and
easily. Reactors have no any clear plan and pattern. Their performance is very low as compare to
analyser, defender and prospector strategies.
Comparisons between entrepreneurial ventures
Organizational objectives and goals
Small business and followers might have no any particular goal and objective. They work on
attaining less profit and growth. Whereas scalable startup and prospector organization’s main
objective is serve continuously innovative products and target high profitability. Scalable startup
business and prospector organizations are similar because these both entrepreneurships looking
for innovation. Large company and analyzer entrepreneurs target to stand in market through
evolving new products, goods, services and marketing strategies. Defender organizations just
protect their business from any factor. Social organizations target to offer high quality products
and services to make better world (Kirzner, 2015).
Risks
In small business and follower organizations, risks might be less but opposition and rivalry is
very high with organizations of same size. Risks are very high due to big financial investments
and high returns of finance in scalable startup business and prospector organizations. Large
companies and analyzer entrepreneurs face risks not very much because large business regularly

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manages high volume sales cause of brand value and analyzers analyze all the situations time to
time. In social organization, risks are very less due to support from government and public.
Defenders have no such risk because they always ready to protect the organization from any risk.
Number of employees
In small business, employees are less than 50. Scalable startup business depends on structure. It
has no fix number of employees and it can be 10 or 100. Large organizations have usually more
than 1000 employees and employees of social organization are depending on size and structure.
This is a similarity between scalable startup business and social organization (Dees, 2017).
Defenders, prospectors, analyzers and followers have not any particular number of employees.
Schumpeterian entrepreneur, Intrapreneur and Managerial business owner are entrepreneurs who
handle these types of organizations.
Effect of micro and small size businesses on the economic condition of country
The numbers of small businesses in different industries of UK are high which cover almost 99%
of industries in United Kingdom. In UK, 96% businesses are micro which has 0 to 9 employees
(Brenkert, 2017). The table below shows the change of number of the micro and small
businesses in UK from 2010 to 2017 the respective employment and turnover.
Micro Small
Years Count Employment Turnover Count Employmen
t
Turnover
2017 2,386,740 5,491,009 791,771,342 231,715 4,450,716 616,807,735
2016 2,277,480 5,299,837 711,934,625 227,450 4,362,372 647,207,183
2015 2,173,355 5,235,540 669,333,844 227,770 4,356,007 625,594,422
2014 1,998,845 4,823,761 622,630,272 218,065 4,181,670 579,076,217
2013 1,912,445 4,631,664 565,824,167 209,710 4,029,631 561,473,698
2012 1,905,255 4,703,769 562,897,805 200,195 3,817,659 519,940,616
2011 1,847,790 4,555,092 552,345,550 190,885 3,677,478 508,579,840
2010 1,861,590 4,618,315 589,871,148 196,520 3,785,801 549,139,326
Table 1. Employment and turnover of VAT and/or PAYE based enterprises in the United
Kingdom by employment size band. Source: ONS (2017)

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2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7
3,500,000
4,000,000
4,500,000
5,000,000
5,500,000
Employment
Micro business employment Small business employment
Chart1: Employment data visualization. Source: Created by the author based on ONS data
presented in Table 1.
Above data shows the trend of employment from year 2010 to 2017. The chart shows clear
increase in employment of Small and micro size businesses.
2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7
500,000,000
550,000,000
600,000,000
650,000,000
700,000,000
750,000,000
800,000,000
Turnover
MIcro business turnover Small business turnover
Chart2. Turnover of data visualization. Source: Created by the author based on ONS data
presented in Table 1.
Above chart shows the trend of turnover from 2010 to 2017 which clear reflect the increment in
turnover of small and micro size business.

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2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7
1,800,000
1,900,000
2,000,000
2,100,000
2,200,000
2,300,000
2,400,000
MIcro business count
MIcro business count
Chart3. Number of micro-businesses by year. Source: Created by the author based on ONS data
presented in Table 1.
Above chart shows the trend of micro business count from the year 2010 to 2017. Number of
micro businesses increased year by year.
2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7
190,000
195,000
200,000
205,000
210,000
215,000
220,000
225,000
230,000
235,000
Small business count
Chart4. Number of small businesses by year. Source: Created by author based on ONS data
presented in Table 1.
Above chart shows the trend of small business count. In year 2011, small businesses were
decreased from year 2010 but after year 2011, every year number of small businesses increased.

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Source: (Schaper, 2014)
As per this graph, micro and small entrepreneurial businesses are higher than large and medium
entrepreneurs in United Kingdom. Micro and small size businesses get 37% revenue and these
businesses provide 48% of occupation in UK.
(Rhodes, 2018)
In 2018, 5.7 million small, micro and medium-sized companies were working in UK, which was
almost 99% of all the businesses. In spite of the fact that maximum organizations in the UK have
less than 10 individuals, this kind of business denotes 21% of turnover and 33% of employment.