Entrepreneurial Ventures and Typology: A UK Small Business Analysis

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Entrepreneurship and Small Business Management
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Executive Summery
In the given report, it has been found that the entrepreneurial ventures are
connected to the typology of entrepreneurship. There are some similarities and
differences among the ventures. The micro and small businesses helps in the overall
economy of the country. The background and characteristics of the entrepreneurs
help in determining the mindset of the entrepreneur.
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Table of Contents
Introduction................................................................................................................. 4
LO1............................................................................................................................. 5
LO2............................................................................................................................. 8
LO3........................................................................................................................... 11
LO4........................................................................................................................... 14
Conclusion................................................................................................................ 16
Reference list............................................................................................................ 17
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Introduction
The purpose of the study is to focus on the small business and on the impact of the
small business on the economy of United Kingdom. It gives an elaborate description
of the entrepreneurial activities and it explains how it is related to typology. There are
many differences and similarities of the entrepreneurial ventures, which are
explained in this study. The small businesses’ impact in increasing the growth of the
economy is elaborated. The small business helps in increasing the growth of GDP of
the country. The unemployment rate of the country begins to decrease because of
the small business. The people, who have no high skills, are employed in the small
business sector. The small business also improves the education rate of the country.
The people also become able to fulfil their need for the employment and the entire
economical growth of UK only because of the small business. However, if the social
businesses are increasing that way with the passing day, the social- economical
factors will be improved gradually.
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LO1
P1 Examine different types of entrepreneurial ventures and explain how they
relate to the typology of entrepreneurship.
The role of entrepreneurial ventures is to provide advisory services to the
companies. There are three different types of entrepreneurial ventures, these are:
Start-up- It is a newly established venture. This venture is small, operated and
financed by an individual or some founders. The individual entrepreneurs establish
this type of venture. For instance, a new construction company or restaurant is an
example of a startup venture.
Acquisition- This venture means buying an established business. In this venture,
the entrepreneurs do not need to start with a new business. This venture is less risky
than the startup but more expensive. The corporate entrepreneurs, as well as the
individual entrepreneurs, can use this venture. For instance, the entrepreneur buys
an existing salon or plumbing company.
New Development- It can be a new business or new project added to the current
business or project of the present organisation. R&D department mainly uses this
venture. Corporate or public entrepreneurs do this kind of venture in business.
Franchise- This is the permission to distribute, produce, or sell a product or service
of any other company. It is an expensive type of venture but the risk is low in this.
Both the individual and corporate entrepreneurs use this venture. For instance, the
entrepreneur is buying Toyota’s franchise or MacDonald’s franchise.
Public-private partnership- Government and private organisations work together in
a new project. This has a combination of effectiveness and efficiency.
The joint venture- It is used in new organisations by two or more organisations who
could be rivals of each other. This venture helps in sharing the risks and costs of the
business. This venture does not last for a long time. Public and corporate
entrepreneurs use this venture. For instance, the Sony Ericsson Company is a joint
venture of Ericsson and Sony Companies (WILSON, 2017).
Typology of entrepreneurship is the classification or categorisation of something
into various parts in a manner that each part reflects related things. There are three
types of entrepreneurship, these are:
Individual- This is started by an individual for creating a new business. The profit is
solely depended on the individual entrepreneur and shared by none. This is also
called lifestyle entrepreneurship. This type of entrepreneurship is used by start-up,
franchise, and acquisition entrepreneurial ventures.
Corporate- This is an inventive accomplishment of the organisation that wants to
expand the business with a series of products. This entrepreneurship can be called
intrapreneurship. This related to the franchise, acquisition, joint venture, public-
private partnership and new development entrepreneurial ventures.
Public sector entrepreneurship-This entrepreneurship is created by the
Government to widen the services for the public. This is also called governmental
entrepreneurship. This covers the joint venture, new development, and public-private
partnership entrepreneurial ventures (Sjöström, 2014). The entrepreneurial ventures
are connected with the typology of entrepreneurship.
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Figure 1: Relation between the typology of entrepreneurship and
entrepreneurial ventures
(Source: Sjöström, 2014)
P2 Explore the similarities and differences between entrepreneurial ventures
The entrepreneurial ventures are classified into the lifestyle venture, high growth
venture, and the small profit venture.
The lifestyle venture- This venture is used by the companies that provide
independence, control, and autonomy to the owner. The working hours are flexible in
this venture as well as there is flexibility in the meeting places and the apparels. This
venture aligns the desire of the entrepreneurs with their hobbies and interests. Its
primary function is to support the lifestyle of the owner of the company. The method
of these companies includes debt financing for the expansion of the business.
The small profit venture- The companies that use this entrepreneurial venture do
not aim in making high profits. These are usually contented with limited growth. The
entrepreneur in this venture usually has full time working hours.
The high growth venture- The goal of this entrepreneurial venture is to make high
profit and development of the company. This venture style focuses on innovative
ideas. This venture style attracts investors much more than the lifestyle companies.
The industry growth helps in the overall success of the business. It helps in
manufacturing more products and the creation of more services.
These ventures have some similarities and differences. These are:
Similarities-
All of them are based on fresh ideas. It is the objective all of these ventures to
produce innovative products and services.
All of them faced risks in financial and non-financial conditions. This is because they
do not have any popular brand that would help them to attract more customers. They
do not have the chance to deal with every supplier they want. It becomes difficult for
all of them to get help from banks for loans.
The entrepreneurs who have an open mind in business establish all of them. They
do not hesitate to deal with new work.
The services and products they provide are innovative in their own way. The
entrepreneurs aimed at producing fresh products that have never been created
before.
Differences-
The aim of the small profit venture is not similar to that of a high profit venture.
The lifestyle venture improves the lifestyle of the company's owner whereas, in the
small profit venture, the owner has to be content with the limited revenue.
In the lifestyle venture, there is flexible time for work but in the small profit venture,
the owner has full time working hours.
The high growth venture attracts more investors than the lifestyle venture.
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Public sector- This is also called as the innovation inhibitors because they prevent
invention in the business or rather slow it down. The mission of this sector is ordered
from the political source and the mission of the business private sector begins from
the signals of the free market. It does not make a profit as high as the private sector.
This sector does not provide incentives to employees like private sharing. This does
not have the risk of bankruptcy; therefore, it does not provide motivation for
innovative ideas. The work ethic, available resources and professional competence
influence the performance of the employees in the public sector. The company is not
free to establish its own management system or culture in this sector. There is a
need for innovation culture in this sector that would provide high-quality service to
the people.
Social sector- This helps in solving social problems and environmental problems.
This also improves the lives of the people and the communities. It helps in reducing
the landfill problems and providing employment to the people. This has the
shortcoming too as it needs investment and grants from outside.
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LO2
P3 Interpret and assess relevant data and statistics to illustrate how micro and
small business impact on the economy.
The small as well as the micro business has a great impact or influence on economy
of UK. They are important to the economy because, the small businesses help in the
growth of the local economics. They try to bring growth to the community, where the
business is situated. It also increases the economic growth by giving many
opportunities like, employment.
Turnover: Turnover refers to the net or entire sales, which is generated by any
business and even by the small business. The small and micro businesses take a
major part in the development in the economy of United Kingdom. The increasing or
emerging rate of the small company in UK is increasing with the passing day. As a
result, the turnover of the selling of the products is very high in UK (Saridakis et al.,
2016). Moreover, when a company experience a great turnover, the ability of the
small company to contribute on the social economy is impaired. The small business,
which has a great turnover, can build their reputation in the market. There are many
new business, which are searching for some communities, which can make an
investment in the company so that, they can improve the local economy. The highest
turnover in the small businesses in UK takes the essential part in building the
economy of UK.
Figure 1: Turnover from small business
(Source: bytestart.co.uk, 2019)
Opportunity of employment: The small businesses are important to act as a major
role in improving the economy by giving a services and employment. Small
businesses can take a great part in creating new jobs or employment. As a result the
small company in the last few years, has recruits around 20 million employees in
their companies. It takes a great part in improving the economy of UK. The small
business for their low financial support cannot give training to their employees and
even can no include high skilled employees in their business.
However, this practice of employment is beneficial to the economy of the UK in two
ways like, the employment of the workers, who have no special skills help in
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increasing the productivity by giving a work experience so that, their ability and skills
may improve and take a part in improving the economy. The other part is that the
small business recruits the workers, who face issues in securing their work and as a
result, it reduce the duration unemployment in United Kingdom. The small business
takes a great part in the reduction of the unemployment rate in UK. The growth of the
small businesses matches the sustainable employment. As a result, the reduction of
the unemployment helps in increasing the economical position of UK.
Figure 2: Opportunity of Employment
(Source: Burstein, 2017)
High worker productivity: A small business always has an organisational structure,
which is less confusing and even which less complex. Even, the Owner and the
manger of the organisation take a great part in handling the management. As a
result, the managers and owners observe the whole process of their organisation
(Ottaviano et al., 2018). That is why, the productivity of the small organisation
become high than the other organisation and as a result, it help in increasing the
total GDP of United Kingdom.
Growth of GDP: There are many small and micro businesses like, Fruit sellers and
stores of groceries have increased the growth of the economy of United Kingdom by
contributing in the GDP (Crafts, 2015). This kind of business has the scopes to
increase their business, when the other larger organisation has no scopes.
Figure 3: value added to GDP
(Source: Geary and Stark, 2015)
Local tax income: The small businesses play an important part in the tax of UK.
The income tax, employment tax, property tax boost the economy of UK by
developing the tax income of the local governments (Brewer et al., 2016).
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P4 Explain the importance of small businesses and business starts-ups to the
growth of social economy.
The social economics refers to the relationship of economics and social behaviour. It
help in examining how the social factors, like, ethics, norms, sentiments and
philosophies influence the behaviour of the consumers and shape the trends of the
public buying. There are three factors, which take a great part in the social economy
of UK.
 The main important social economical factors are employment. The status of
employment and the particular occupation can have a large impact in the
health of the economy. The small business has increase the employment rate
by involving the persons, who has low skills. Moreover, the increasing of
employment because of the small businesses can cause skin cancer in the
people, who work outside and under the direct sun. Moreover, the people,
who spend more time near to radiation, can face cancers. However, the
increasing of employment provides the people a better life to live. Even they
can take care of themselves or takes care of their health by their employment.
Moreover, the employees become more active for their daily hard work in the
small business (Patel, 2019).
 Small business also takes a great part in improving the rate of education In
UK. Education can influence the choice of the employment. The increasing
rate of the small businesses increases the ability of the people to take higher
education, which has some financial weakness. The people, with lower
education also have lower health education. Moreover, the economy of a
country becomes more efficient and productive if the number of educated
workers increases. The effect of the education because of the small business
has some positive and negative impact on the society. Education makes the
people aware of their present situation and helps the people to find their
possibilities and to overcome their issues and problems to match the present
situation.
 Small businesses also help in establishing the personal relationship among
the employees, suppliers and customers. In the small business, the
customers can directly contact with the managers or the owners of the
company. The interaction between them becomes strong for common and
easy structure of the small businesses (Roseet et al., 2017).
 In the small business, there are flexibility to respond to the challenges and
problems. They can also quickly change their decision according to the
present situation or for serving the needs of their customers.
 Small businesses also help in the development of the social growth of the
locality. The total earned money stay in the country as the small businesses
do not trade in other country and as a result, the small business helps in the
overall growth of the country.
 The middle class people of UK because of the small business become able to
fulfil the needs as most of them are employed in the small business sector.
 Small business also has the ability to develop and introduce new ideas to do a
different thing or to tackle the competitiveness of the market. In the small
business, there is no need any approval from the owners or the managers
and as a result, their social environment becomes strong.
 The small businesses in UK also help in catering the niche markets. The large
farms, which have high overheads, can produce a great level of things to the
spread cost. As a result, they can include a huge number of employees in
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their small organisation to make an impact on the growth of socio-economy
(Stiglitz et al., 2015).
LO3
P5 Determine the characteristic traits and skills of successful entrepreneurs
that differentiate them from other business managers.
Entrepreneurship is an important tool of every business, which is related taking
proper risk for gaining more profit and enhances the financial status of the respective
organisation. It is related with developing and effective running of each and every
business in the favour of getting more profit in the business. Entrepreneurs are
considered as those who have the ability to take the risk and responsibility of running
the business successfully (Piperopoulos and Dimov, 2015). The entrepreneurs have
particular characteristics, trait and skills, which is associated with distinguishing them
from any other managers of other business. In this context, it has found that Peter
Jones, Simon Cowell and Sir Richard Branson are the most famous and successful
British entrepreneurs.
The significant characteristics, trait and skills of entrepreneurs are briefly discussed
in below:
Ability of taking decision:
They have the nature of being confident while performing their task. This helps them
to take proper decision while performing a difficult task. It helps to take more
challenges and risks in the favour of gaining more profit. Entrepreneurs who are
successful in their role are found to never keep doubts regarding their decision
making. It is the most effective skill, which an entrepreneurs should posses.
Competitiveness:
It has found that the current market is highly competitive in nature. The entire
business organisation is found to competing with each other for their effective
sustainability in the market and maintaining proper margin of their profit. In the
current scenario, it has found that the competition has increased many folds (Richter
et al., 2016). The most important character of entrepreneurs relies on the fact that
they should have the ability to compete in a well manner to other competitors that is
associated with achieving more success in gaining profit.
Passion:
All entrepreneurs should posses the nature of becoming passionate. It has found
that all of the successful entrepreneurs have a great interest in this kind of activities
from their childhood (Edwards-Schachter et al., 2015).
Clarity of purpose:
In running any kind of business, the most significant attribute is fall under the
category of having an appropriate clarity of business oriented purpose. An
organisation can not able to meet its goal and objectives properly or is not related
with achieving success appropriately without have a proper purpose. The most
effective entrepreneurs have the trait of focusing on the purpose of the business for
achieving its goal more efficiently. Proper recognition of the purpose is associated
with identifying the basic features of every business, which should be implemented.
It is associated with meeting the goal of the business more easily. Successful
entrepreneurs are always concerning with clarify the purpose to every employee,
which helps them to recognise their specific task. This helps to improve the
productivity of the organisation by focusing the objectives.
Believe in technology and innovation:
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Successful entrepreneurs are always focused on utilising the current technologies in
their performance for improving the productivity. This is associated with enhances
their margin of profit. This is associated with maximising the profitability of the
respective organisation along with reducing the cost, which have a significant
positive effect on the sustainability and profitability of the business.
P6 Assess how aspects of the entrepreneurial personality reflect
entrepreneurial motivation and mindset.
Mindset can be defined as the recognised set of perceptions and attitudes that an
individual holds. The mindset of an individual develops through time from an
individual’s experiences. The beliefs and individual thoughts of an individual shape
their overall mindset. The entrepreneurial outlook refers to a state of mind that is
unique to the entrepreneurs only. These individuals are drawn to new opportunities
and tend to focus on value creation (Canals, 2016). An entrepreneurial personality is
shaped by their experiences. These individuals want something more than money.
They are simply risk takers, and therefore they hardly miss opportunities. They try to
stay motivated even in the face of adversity. Various situational factors are also
involved in shaping the overall mindset of entrepreneurs. For example, Sir Richard
Branson, one of UK’s successful entrepreneurs believes in originality and innovation.
He is successful because he does not believe in staying in his comfort zone. He
audaciously moved as an entrant in the British Airways but faced financial losses.
However, he did not lose hope, as it is evident from the success of his
entrepreneurial venture, The Virgin Group.
For example, factors like lifestyle, culture, existing knowledge and experience can
help an entrepreneur shape their vision and mission. These factors, in turn, give
meaning to the vision of the entrepreneur. Social factors and cognitive
characteristics also play a vital role. Increase or decrease in the motivation levels of
an entrepreneur depends upon the social surrounding. Often negative factors like
unemployment and family commitments might give rise to entrepreneurial thinking. It
can be stated that these individuals are risk takers and therefore, they try to identify
permanent solutions to their problems.
Simon Cowell, one of the well-known British entrepreneur and television judge
believes that change is essential in an individual’s life. He loves to travel and makes
friends easily. Moreover, he is good at conveying his opinions and thoughts and
these traits help him in motivating and persuading others. At the face of misfortune,
he bounces back quite easily. By practicing anger management techniques, he is
able to accomplish his goals.
Additionally, when entrepreneurs have access to financial, labour and technological
resources, it will be reflected in their behaviour (Garcia-Cabrera et al., 2018). Adding
to that, the family background and upbringing might also shape an entrepreneurial
mindset. Emotionally stable entrepreneurs tend to be sensitive and receptive
towards the needs of others. On the other hand, insistent individuals tend to ignore
the needs of others and are only focussed towards achieving their own targets. In
short, it can be stated that political, social and cultural factors have an impact on the
mindset of these individuals.
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