Entrepreneurial Ventures and the UK Economy: A Report

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Entrepreneurship and Small Business Management

ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Contents
Introduction...................................................................................................................................................... 3
Task 1................................................................................................................................................................. 4
a) Critically examining the scope, development and growth of entrepreneurial ventures in
your borough................................................................................................................................................ 4
b) Critically examining how small businesses have impacted on the economy making
reference to relevant data and statistics.................................................................................................9
Task 2............................................................................................................................................................... 13
I. Analysing the characteristic traits, skills and motivational drivers of successful
entrepreneurs............................................................................................................................................ 13
II. Critically evaluating how their background and experience has influenced them both
positively and negatively using examples............................................................................................ 13
Conclusion...................................................................................................................................................... 27
References....................................................................................................................................................... 28
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ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Introduction
Entrepreneurship can be defined as owing a business and managing all its activities to run it
smoothly. There are different kinds of entrepreneurial ventures which have impacted the
economy of the country. There could be different business ventures like small, medium or
large size. There are many similarities and differences among them. The common thing
among them is that they all aim to contribute in the economy of the country. Emergence or
closure of any kind of business put impact on the economy. There are many factors
contributing to growth of a business. Every entrepreneur has a different logic behind his/her
success in entrepreneurship.
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ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Task 1
a) Critically examining the scope, development and growth of entrepreneurial ventures
in your borough
Entrepreneurship- This can be defined as the process of establishing business and taking
risks in it with the hope of earning huge profits. It can bring a lot of change in the economy
within borough. Thus, the whole business is centre controlled. The people who own
businesses are called entrepreneur. All the important commands are in their hands
(Kuratko, .2016)
Difference between entrepreneur and intra-preneur-
There is a lot of difference between entrepreneur and intra-preneur. It is explained through
the following points-
Figure 1: Difference between Entrepreneur and Intrapreneur (Martiarena,
2013)
Entrepreneur-
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- An entrepreneur works independently. Thus, he does not need to ask from anyone
about the operations or activities.
- An entrepreneur has to arrange for all the funds required to run the business.
- He has to work considering all the risks factors.
- There is no boundary defined for working of the entrepreneur.
- An entrepreneur has to set up his own new organisation.
- An entrepreneur can also be regarded as fresh holder, as he does not have any
experience of working anywhere.
On the contrast, here given below are characteristic of intra-preneurs-
- An intra-preneur depends wholly on entrepreneur for all the functions.
- An intra-preneur does not need to raise any fund.
- He does not care of any risk involved.
- He has to perform all his activities and operations within the boundary of
organisation.
- He only can establish his own business, only after working within someone else’s
organisation.
- An intra-preneur is an experience holder, as he already had worked for someone else
before establishing his own enterprise.
Different activities that are linked to entrepreneurship-
An entrepreneur has to work a lot in order to run his business and to make a successful strike
in the market. It is therefore, there are many activities that are linked to entrepreneur; these
are explained as below-
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ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
- Planning for the next investment- in order to make more money, an entrepreneur has
to plan for the introduction of the next product. If he is able to make better products
for the community, the more profit would be there for the business. Thus, he has to
plan for all such activities that can make huge profits. For example, if an entrepreneur
has a good establishment in the community and has made good faith with customers,
then he must introduce next product so as to retain the customers’ trust and to grow
the business (Abreu and Grinevich, 2013).
- Brainstorming- an entrepreneur must always brainstorm the next step to be taken to
promote the business.
- Knowing trends of the market- an entrepreneur must be very good at marketing skills.
He/she must know what strategy at what time should be applied. When products must
be bought and sold.
Thus, it is seen that all the above stated activities are interlinked with entrepreneurs.
Different ventures undertaken by entrepreneur-
There can be different kinds of ventures undertaken by entrepreneur like private, public and
social. As it is clear by the name, private enterprise is the business that is owned by
individual of his own. The public enterprise is run by the government. On the other hand,
social enterprise aims to benefit the society to its maximum. In addition to this, there could be
variation in size of ventures like: micro, small and medium. There exist a lot of similarities
and differences among these. The functioning of each one is different. One of the most
common similarities between private and public ventures is that they both aim to maximise
the profit gain and to increase the potential.
Difference between private and public entrepreneurial ventures-
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ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Private entrepreneurial venture Public entrepreneurial venture
It is owned by individual. It is owned, managed, run, and controlled by
government.
Its management is owned by the individuals
that own it.
It is managed by the government.
All the finance related decisions are made by
the owners.
All the financial decisions are undertaken by
the government and profit/loss are also
become the property of government.
Its main objective is to gain maximum profit. Its objective is to gain profit and helping and
the society as well.
All its accountability is in the hands of the
owner.
Its accountability is undertaken by
government.
Table 1: Difference between private and public entrepreneurial ventures (Munari and
Toschi, 2015)
Thus, it is seen that there is a lot of difference between the private and public ventures. They
somehow, are similar to each other in the way of making use of available resources and
making profit out of it. Both keep a close eye on the marketing trends.
Scope, development and growth of entrepreneurial ventures in UK-
In UK, the private entrepreneurship includes mainly of sole traders (the organisation is owned
by few individuals), partnerships (the number of partners may vary from 2 to 20), and
franchises. Various private companies in UK are Home Bargains, Shop Direct and many
more. The public entrepreneurship includes the organisations that are wholly owned by UK
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government. These can be Manchester Airports Group, London Underground and many
more.
Differences between private and public enterprises in UK-
Private enterprise Public enterprise
Objective To gain maximum profit and
to lead in the market.
To give profit to society and
community for which it
operates.
Structure Its structure depends upon its
size. The higher the size,
more complex its structure
would be.
These are generally complex
in structure with a huge
hierarchical level of
management.
Size It may vary in size. It can be
small, medium or large scale
organisation.
These are usually big in size.
Decision making policy All the vital decisions are
taken by the few individuals
i.e. the owners of company.
Decision is taken by the team
at high level of management.
Table 2: Difference between Private and Public enterprises in UK
Thus, it is seen that though working of private and public entrepreneur in UK remains the
same but there lies many differences among them in terms of their objective, profit gain, size,
and decision regarding policies.
From the past few years, it has been observed in UK that there has been great decrease in
recession which results in more development. It has also been observed that young generation
in UK are now showing their interest in setting up in businesses which directly leads to high
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ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
scope and more development of entrepreneurial ventures. There has been a good rise in small
and medium size businesses in UK, thereby giving an increasing in scope (Burns and
Dewhurst, 2016).
b) Critically examining how small businesses have impacted on the economy making
reference to relevant data and statistics
It is important to put light on different types of businesses running in UK. There have been
many small or medium sized enterprises operating in UK. They even show good annual
turnover. In 2016, near about 5.5 million private businesses were recorded. There has been
witnessed continuous increase in the number. For instance, till 2015, increase of 97,000 has
been observed and since 2000, more than 2 million has been recorded. In addition to this,
there has been an increase in employing and non employing businesses as well. Putting light
on it, it has been recorded an increase of 14,000 in employing and 84,000 in non-employing
businesses since 2015.
Interrelation between SMEs (small or medium sized enterprises) and UK economy-
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ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Figure 2: Contribution to population, employment and turnover in 2016 (Cowling et at,
2015)
From the above graph it is clear that 99.3% has been accounted by small businesses in UK
and there were 99.9% small or medium sized enterprises. 60% i.e. 15.7 million of total
employment has been provided by private sector only in UK.
In the composition of business population, it has been observed that 45% of businesses were
registered for VAT or PAYE. It has been observed that there has been growth of non
employing businesses since 2000 i.e. for 89%. In the last year only, there has been increase of
86%. In industry sector in UK, 99% of the businesses have been accounted by SMEs.
Another important factor to be considered here is that there has been growth in UK private
sector business because of contribution of non employing businesses. It is explained with the
help of the following graph-
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ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Figure 3: Non employing and employing businesses in UK private sector
It is clear from the graph that-
o Non employing businesses has been increased by 77%
o Employing businesses has been increased by 19%
o 89% of total growth has been registered by non-employing businesses
Comparison between medium and large businesses in UK-
As explained earlier, near about 96% of businesses in UK are small or medium sized
businesses. The main difference between medium and large scale businesses is that of
management level that arises because of their size and composition. It becomes easy to set up
small scale businesses but they are hard to maintain because they comprise of few resources.
But on the other hand, a large scale enterprise has good human resource and capital as asset
with them. Difference between the two has been explained through the following table-
Medium businesses Large businesses
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ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
Definition Business that is owned by
single owner with few
employees.
Comparatively bigger than
medium sized, can have 250
or more employees.
Management style All the management
decisions are in the hands of
owner or of partners.
They are not easy to set up as
huge capital is required for it.
HRM Narrow scope of recruiting
new employees and lesser
need of training them.
HRM has to work really hard
here in the process of
recruiting new employees
and training them.
Finance All the capital/finance
belongs to the owner only.
There can be problem if
liquidity or cash flow here.
Because of availability of
huge capital, all the financial
decisions are taken by
finance department.
Table 3: Difference between medium and large businesses (Spithoven, Vanhaverbeke
and Roijakkers, 2013)
Thus, it can be concluded that there is great difference between medium and large businesses
in different aspects. The common factor between the two is that they both contribute to the
country’s economy.
In the end it can be concluded that in main industry sector, 99% of overall population has
been accounted by small businesses. It has also been observed an increase in SMEs in
professional, scientific and technical activities with account of 15% and 10% in wholesale
and retail trade. Thus, it leads to contribution in UK economy as well.
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