SMEs and Entrepreneurship: A Comprehensive Overview

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SMEs AND ENTREPRENEURSHIP
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SMEs AND ENTREPRENEURSHIP
Table of Contents
Introduction......................................................................................................................................4
LO1..................................................................................................................................................5
Various Types Ventures of Entrepreneurship..............................................................................5
Similarities and Differences between Entrepreneurial Ventures.................................................6
Variety of Entrepreneurial Endeavours for Public and Corporate Sectors..................................8
Scope, Development and Growth of Entrepreneurial Endeavours..............................................8
LO2................................................................................................................................................10
Influence of Micro and Small Business on the UK Economy...................................................10
Value of Small Businesses and Business Startups....................................................................11
Dissimilarities Small, Medium, and Large Businesses Create on the Economy.......................12
Influence of Small Businesses on Different Levels of Economy..............................................13
LO3................................................................................................................................................14
Distinctive Features and Qualities of Successful Entrepreneurs...............................................14
Phases of Entrepreneurial Traits Imitating Entrepreneurial Drive and Attitude.......................15
Arguments Associating to Entrepreneurial Distinctiveness......................................................16
Distinctive Character, Abilities and Motivational Drivers of Successful Entrepreneurs with
Examples....................................................................................................................................16
LO4................................................................................................................................................18
Background and Experience Can Hamper or Cultivate Entrepreneurship with Examples.......18
Link between Entrepreneurial Characteristics, Influence of Personal Background, and
Experience to Specific Successful Entrepreneurs......................................................................18
Background and Experience Persuading the Entrepreneurs......................................................19
Conclusion.....................................................................................................................................21
References......................................................................................................................................22
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Introduction
The concept of entrepreneurship focuses on the process of thinking, designing, executing and
launching a new business based on a new aged idea. The people behind the execution of these
ideas are known as entrepreneurs (Piperopoulos, 2016).
ThirdWay is a medium enterprise that provides interior designing services for commercial
spaces. They also provide workplace consultancy (Thirdway, 2019).
In the report, the concept of entrepreneurship will be provided along with the concept of the
company chosen. The various entrepreneurial ventures will be explored and discussed. The
impact of small businesses on the economy of a country will also be highlighted. It will also
discuss the key aspects of an entrepreneurial mindset and examine the different environments
that foster and hinder entrepreneurship. Lastly, a conclusion will be drawn.
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LO1
Various Types Ventures of Entrepreneurship
It can be observed that there are several types of entrepreneurial ventures, which are being stated
below:
Tiny entrepreneurial ventures
This type of entrepreneurial ventures tends to constitute a large part of the economy in this
globalised world and is growing in a fast manner. It is helping to eradicate the problems of
unemployment as more jobs are being created (Scarborough, 2016). This type of business ranges
from hairdressers, plumbing, and electricians to various other businesses whose capital is limited
and have a higher risk is being associated with it. Thus, tiny business is always related to the
local topology of the business environment. For instance, virtual assistant is one of the emerging
tiny ventures, which is lucrative in nature.
Extensible entrepreneurial ventures
Extensible entrepreneurial ventures help to introduce new type of business, which are innovative
in nature so that it can survive in this dynamic business world. For this, Extensible
entrepreneurial ventures needs higher amount of capita during the initial stages so that there is no
problem in their operation and high skilled employees are needed (Kuratko, 2016). These high
skilled employees tend to improve the business works through higher productivity rate. On the
other hand, money is injected in various stages so that there is no problem of business expansion
and the money is injected using the process of venture capital. Domestic topology suits the
Extensible entrepreneurial ventures. For instance, Chatbot creating agency is one such extensible
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entrepreneurial ventures, which deals with marketing and sales for cutting down the costs and to
earn higher revenue.
Gigantic entrepreneurial ventures
The life cycle of gigantic entrepreneurial ventures is very much predetermined in nature. This
helps in earning a decent amount of profit over the course of time and can grow with higher
brand reputation (Burns, 2016). Innovation is the key for their growth through which the needs
of the customers are met and helps them to satisfy their needs. Further, gigantic entrepreneurial
ventures tend to bring new technologies in the production process, which will ultimately increase
the quality of the product. This are related with the national topology of the business world. For
instance, London venture partners are investing heavily on the online portals so that they are able
to promote table games.
Communal entrepreneurial ventures
Communal entrepreneurial ventures are regarded as the venture, which are developed so that the
needs of the community are being met effectively. Thus, products are designed according to the
needs and preference of the customers. These ventures are related with the overall business
topology, which shall bring sustainability in an effective manner. For instance, Peter Jones is
well-known business tycoon who has interest in television, mobile phones and other modern
gadgets. He has crested academy in London for the upcoming UK entrepreneurs.
Similarities and Differences between Entrepreneurial Ventures
It can be observed that the key similarity between the entrepreneurial ventures is that they are
integral part of the business world through which economy can be developed easily. These types
of entrepreneurial ventures are being managed, owned and controlled by a single entrepreneur
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only who takes up all the responsibility to bear the risks and develop entrepreneurship type of
business (Scarborough, 2016). Thus, it can be seen that they tend to provide innovative and wide
range of products, which are readily accepted by the customers, and it satisfied their needs by
meeting their expectation. For instance, Thirdway Group is dealing with interior decoration and
designs the office space for many clients, which helps to meet the requirements of having a
better workplace. The businesses are tiny in nature, which are being accompanied by high risk
and requires higher funds during the initial stages of the business. In addition to this,
entrepreneurial ventures tend to face higher rate of competition in the market that have higher
brand value.
Difference is stated below:
Tiny venture Extensible venture Gigantic venture Communal venture
These ventures are
growing in a fast
manner
It is undertaken for
bringing innovation
It has finite life cycle
where innovation is the
key to their success
(Kuratko, 2016)
It is related with the
community
development so that the
specific needs are met
easily
The profit rate is limited
(Cooper and Folta,
2017)
Profit rate depends on
the innovation
Profit rate depends on
creating new products
Not for profit motive
Attached with local
topology
Attached with domestic
topology
Attached with national
topology
Attached with social
topology
Funded by venture
capitals
Funded by investors
who seeks the
opportunity to earn
Funded by various
sources (Kirzner, 2015)
Funded by government
only
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higher returns
Variety of Entrepreneurial Endeavours for Public and Corporate Sectors
There are various types of public entrepreneurial ventures, which are the integral part of the
public sector and are mainly connected with serving the needs of the public. These types of
ventures are being funded through the taxes that are being collected from the public. The various
types are:
- Tiny entrepreneurial ventures: This type ventures are created with the help of skills
and strengths that the entrepreneur posses. The risk is borne by the entrepreneur and
money is generated through the help of venture capital
- Social enterprise: This venture is formed to help the society meet their needs in an
effective way. They tend to build innovative solutions for making the word a better place
to live in.
Corporate ventures are more concerned with intention to meet customer’s needs and earn a
decent rate of profit. The various types are:
- High growing companies: These type ventures helps in growth of the company and are
being accompanied by high growth through periodic investments (Nambisan, 2017)
- Established ventures: The employee strength of this companies is minimum 500 and
tends to create various job opportunities with high market share
Scope, Development and Growth of Entrepreneurial Endeavours
The scope, development and growth of entrepreneurial ventures are analyzed below:
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- The scope is very high due to fast growing nature of the business
- The business is developed through the help of micro finance so that more job
opportunities can be created (Kuratko, 2016)
- More revenue is generated which helps in the growth of the business
- Investors are easily attracted towards them which ultimately increases the scope of doing
business
- It can be observed that the bigger organization tends to create more jobs which ultimately
increases the economic development
- entrepreneurial ventures venture is considered as the centre for innovation which
introduces new technologies of doing business (Kirzner, 2015)
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LO2
Influence of Micro and Small Business on the UK Economy
From the research works of Usai et al., (2018), it has been found that the impact of micro and
small business is immense on the economy of the UK. Out of the 5.8 million businesses in the
UK market, over 99.8% of them are SMEs and micro businesses that has a total employment
number if over 16.4 million with an annual turnover of £2.0 trillion as of 2018 which is
equivalent to 52% of the private sector turnover.
Figure 1: Contribution of Different Sized Businesses in the UK in 2018
(Source: SME, 2019)
Since the inception of Micro Businesses and SMEs in the UK market, the country has witnessed
an increase in the growth of the two types of businesses where they have grown to the point a
major portion of the business market is occupied by them. Over 95.6% of the businesses in the
UK are micro that accounts for 81.3% of all the employment in the UK market (MicroBusiness,
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SMEs AND ENTREPRENEURSHIP
2019). From the research works of Usai et al., (2018), it has been found that while micro
businesses have a vastly low level of turnover compare to SMEs, however, they have contributed
to £673 billion which is approximately 18% of all private sector turnover in the economy. On the
contrary it has been found that while the employment growth of the micro and SME businesses
in the UK market account for 15.4%% and 15.1% respectively, the employee turnover is 13.8%
as well as 15.3% respectively (MicroBusiness, 2019).
Figure 2: Employment Statistics of Different Sized Businesses in the UK in 2018
(Source: UK SME Data, Statistics & Brilliant Charts., 2019)
Therefore, from the data obtained, it can be assessed as well as evaluated that both the roles of
SMEs and Micro businesses in prominent within the UK market. The businesses not only
contribute to the economy of the country through GDP growth, but also help in the employment
of the people in the country. Moreover, while the SMEs and Micro businesses struggle against
large sized companies, their growth has been steady in the UK and they are expected to grow
more in the future.
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Value of Small Businesses and Business Startups
From the research works of Idris and Saridakis (2018), it has been found that the concept of the
social economy refers to the diverse group of companies, businesses, and enterprises in the
market and are mutually connected or associated in some way. In the context of the UK social
economy, out of the 5.8 million businesses in the UK market, over 99.8% are small businesses.
As such, the role and importance played by the small businesses and business start-ups are
prominent and immense as they helps to ensure that the growth of the UK market is consistent.
Having small businesses and business start-ups in the UK social economy enable companies,
businesses, and enterprises to be connected to each other that would form a network chain and
help to bolster the economy and GDP growth of the country (Idris and Saridakis, 2018).
Dissimilarities Small, Medium, and Large Businesses Create on the Economy
From the research works of Afrifa and Berchie (2019), it has been found that there are different
roles that are played by the small, medium and large businesses play in the UK market and as
such, they create significant differences in the economy. These differences are:
 While the large businesses are able to recruit highly qualified candidates in the country,
however, the small and medium enterprises are able to recruit a lot more with over 81.3%
of all the employment in the UK market. This helps to mitigate the issue of
unemployment in the country.
 While large businesses are able to cater to the needs of wider customer contexts, the
small and medium enterprises are able to provide solutions to the local customers as well
as businesses that would help them in establishing a ground in the market.
 Large businesses are able to generate high revenue within the UK market that contributes
to the economy. However, the turnover from SMEs constitute of 52% of the revenue
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generation of the private sector that can be contributed to the economic growth of the
country (Rana et al., 2019).
Influence of Small Businesses on Different Levels of Economy
The impact of small businesses on the different levels of the economy as well as on the
international level includes:
 Local: On the local level, small businesses help to bring innovation, growth, and
sustainability to the community as well as employing a large part of the population.
 Regional: On the regional level, small businesses help to improve the competitiveness
between themselves that results in innovation as well as creation of new jobs and
employing more people (Fini et al., 2018).
 National: On the national level, small businesses help to contribute to the economy of
the country of the UK through their annual turnovers and revenue generation.
 International: On an international level, small businesses help to boost the economic
growth by creating job opportunities, developing new products and service through
innovation, and many more. This helps the country to compete with others on an
international level (Fini et al., 2018).
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