Entrepreneurial Ventures: A Report on UK Small Businesses

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Entrepreneurship and Small Business Management
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Table of Contents
Introduction................................................................................................................................3
Task 1.........................................................................................................................................4
Conclusion................................................................................................................................13
Reference List..........................................................................................................................14
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Introd”uction
Entrepreneurship is the readiness and aptitude to organise, develop and run a business as well
as the different risks associated with it to earn maximum profits. In UK, the majority of the
businesses are small enterprises and are run by entrepreneurs. Consequently, the “small
businesses” put in majorly to the financial system of the nation; thereby, stating that, effective
management of small business and entrepreneurship can result in generating maximum
profits in reference to the business itself as well as the country wherein it operates. In this
paper, scope of entrepreneurship will be determined along with the barriers and enablers of
start-up businesses.
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Task 1
Examine different types of entrepreneurial ventures and explain how they relate
to the typology of entrepreneurship
An entrepreneur can be defined as an individual who works for herself or himself. The
individuals who take up their own entrepreneurial ventures along with their risks and profits
are known as entrepreneurs. The most apparent example for entrepreneurship is commencing
of a new and innovative business. The different typologies of entrepreneurship are explained
below:
Public sector entrepreneurship
The “public sector entrepreneurship” can be defined as the proliferation of innovative and
new initiatives of public policy, which generates better economic affluence by changing a
status-quo financial environment into a further conductive environment (Leyden, 2016). In
the present economy, this type of entrepreneurship is witnessed to affect the transformations
initially by enhancing the efficacy of the knowledge networks.
Corporate entrepreneurship
Corporate entrepreneurship refers to the process that is used in order to develop a new
business, service, products or processes within an existing organisation. This is done in order
to build value as well as engender growth in revenue with the help of entrepreneurial actions
and thoughts (Kuratko et al., 2015).
Individual entrepreneurship
Individual entrepreneurship refers to the businesses that are managed and operated by single
owners. In such type of businesses, the entire profits and risks are entirely enjoyed by the sole
owner of the business (Guerrero and Urbano, 2014). Here, the business owner is independent
of all constrains and are free to take all the business decisions on their own.
The different entrepreneurial ventures are explained below:
Start-ups
The start-ups are known to be the businesses that are set off by entrepreneurs or individual
founders in order to ensure “scalable business model”. In other words, start-ups are the new
businesses that carry out their business operations with the motive of growing its business
and earn better revenue (Westlund et al., 2014).
Franchise
This venture is based on a concept wherein a franchisor grants permission to the franchisors
or entrepreneurs through licensing (Altinay et al., 2014). In such type of ventures, the risk of
failure is low as the franchisor is already well established and known in the market.
Joint Venture
Joint venture refers to a cooperative organisation, wherein two or more entities or businesses
joint hands with the intension of carrying out a project or some business activity (Klijn et al.,
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2014). This type of ventures is generally considered by companies that share similar goals
and interests.
Explore the similarities and differences between entrepreneurial ventures
The difference and similarity between diverse entrepreneurial ventures are explained below:
Factors of Differentiation Smaller Profit
Entrepreneurial Venture
Higher Growth
Entrepreneurial Venture
Ownership Is run by one or more
individuals
Is run by a large group of
owners
Aim To cater to the requirements
and demand of the customers
and earn maximum profits
out of it
To expand its business
operations and generate more
revenue from the business
Risk The level of risk is low for such
ventures
The level of risk is high for
such ventures; however, they
ensure taking primitive
measures in order to avoid the
pertaining risks.
Local development It contributes considerably
towards the local economy.
It operations mainly facilitates
in economic growth of the
country.
Table 1: Difference and similarity between diverse entrepreneurial ventures
(Source: Created by the Learner)
From the above table, it has been witnessed that both the small profit and higher growth
entrepreneurial ventures share a lot of similarities and are also different at the same time. For
instance, the ownership pattern of both the organisations are different; however, the aim of
functioning is similar for the both the ventures (Kellermanns et al., 2016). Additionally, the
level of risk varies between both the ventures. The contribution towards the local economy is
also witnessed to be more in terms of the smaller profit entrepreneurial ventures, as the higher
growth ventures contribute majorly towards the country’s economy.
Investigate a diverse range of entrepreneurial ventures to demonstrate an
understanding of entrepreneurship in both the public and corporate sector
In the view of the fact that, the public sector mainly focuses upon providing the citizens with
all the necessary services and products, the entrepreneurial ventures operating in the public
sector aims at coming up with new initiative and innovations in the public policies; thereby,
providing better services and products to the people as well as earning profits and
contributing in the direction of the financial system of the nation. However, the ventures
operating in the public sector need to adhere to the policies and standards set by the
government in order to run its business (Zhou et al., 2015). In contrast, the entrepreneurial
ventures, which operate in the corporate sector, commence their business with the key motive
of earning profits from the business. In this sector, the entrepreneurial ventures and start-ups
are independent and have the authority to arise with latest and innovative business ideas,
services and products in the market. The corporate sector entrepreneurial ventures face little
to no involvement of the government and therefore have the liberty of taking the business
decisions on their own.
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Critically examine the scope, development and growth of entrepreneurial
ventures
Every entrepreneurial undertakings operating in the market run with a specific objective and
therefore, have different scopes and means of development and growth. The scope of
expansion and escalation of diverse entrepreneurial undertakings are explained below:
Start-ups
Start-up ventures encompass huge scope of wealth sharing and creating. This is for the reason
that, when establishing a new start-up, the entrepreneurs invest their personal resources as
well as acquires capital from the lenders, public or investors. This facilitates in mobilising the
public capital; thereby, allowing the people to incur benefits from the growth and
development of the entrepreneurs and their growing business (Westlund et al., 2014).
Furthermore, the start-ups have huge scope of creating jobs, balancing regional development
and so forth.
Franchise
Franchising being one of the most significant and successful business models holds huge
possibility of development and growth for the entrepreneurs as well as local and national
economy. These entrepreneurial ventures facilitate in bringing in a lot of job opportunities
and exposure (Altinay et al., 2014).
Joint Venture
Joint ventures allow the entrepreneurs to expand their business across different regions;
thereby, allowing the companies with the scope of expanding its market shares as well as
earns better profits. Such entrepreneurial ventures possess huge scope of development and
growth in terms of profits generation and market recognition by allowing joining hands with
different entities for accomplishing a project or business activity (Klijn et al., 2014).
Interpret and assess relevant data and statistics to illustrate how micro and small
businesses impact on the economy
As per the current reports, it has been witnessed that, the small and micro businesses
significantly put in towards the financial system of the nation. In context to the economy of
UK, the “small and micro businesses” are considered its backbone. They are the key drivers
of growth in the country, as they facilitate largely towards captivating new markets as well as
creating job opportunities. Being the seedbeds of innovation, these organisations encourage
contest and struggle in the market and bring in brand new and innovative ideas (Small
Business, 2015). As per the findings of Fsb.org.uk. (2019), the small businesses in UK
comprise of 99.3 percent of the private sector organisations. In addition to this, it has been
also witnessed that, “the small organisations provide huge employment to the people of the
country, that is, nearly 16.3 million”. “The accumulated yearly turnover of the small and
micro businesses was estimated to be £2.0 trillion, as of 2018, which is almost 52 percent of
the entire turnover of UK’s private sector”.
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Figure 1: Different Sectors of SMEs in United Kingdom
(Source: Statista., 2019)
The above figure highlights the key industries in UK wherein the small and micro
organisations operate. It further signifies that, the personal and professional service sector
majorly comprise of the small business. Followed by that, it has been studied that the
wholesale or retail sector including the online shopping sites also comprises of small and
micro companies; thereby, largely contributing towards the financial system of the country.
As a result, it can be asserted that, the growth of the “small and micro businesses” have
provided huge opportunities to the entrepreneurs to suggest their original and innovative
business ideas and run their business successful as well as generate huge revenues.
Explain the importance of small businesses and business start-ups to the growth of the
social economy
Social economy can be ensured by a rich assortment of business organisations such as,
paritarian institutes, associations, cooperatives, mutual, social enterprises, foundations and so
forth. The key features of a social economy are that these allows open and voluntary
membership, it adheres to democratic governance, enjoys autonomous management and is
independent of any public authorities. A social enterprise refers to the organisation, which
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implements commercial strategies in order to increase improvements in environmental, social
and economic well-being. “Corporate social responsibility” is considered a significant part of
the “social economy” (KritiKoS, 2014). It refers to the activities that the organisations carry
out by considering the society’s interest by being accountable for their business operations
and its impact upon different entities including its employees, consumers, suppliers, and so
forth. In the present scenario, it has become extremely necessary for the small businesses to
carry out efficient CSR activities, as it helps in enhancing the brand image as well as
attracting more customers.
Presently, the small businesses play a significant role in ensuring the growth and expansion
and progress of the social economy. The small non profit or social economy enterprises are
presently witnessed to play a considerable role in catering to the needs and demand of the
people that are not met by the public as well as private sector. In addition to this, it helps
improving the economic productivity of the country as well as providing employment. Owing
to the fact that, the global trends are in favour of both enhancing the production of services
and governmental privatisation of those services, the not-for-profit or social economy
organisations are expected to play a huge role in benefiting the future financial system of the
countries.
Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics
In context to the UK economy, the “small and medium sized business organisations” are
considered a focal point in determining the economy of the country in comparison to that of
the large organisations (Ec.europa.eu., 2019). The small and medium organisations are the
key sources of innovation, social integration, job creation and economic growth of the
country.
Figure 2: Number of small and medium enterprise, turnover and employment in UK, as
of 2015
(Source: Ec.europa.eu., 2019)
On contrary, the large organisation in are witnessed to be more productive and dynamic in
nature. Despite the fact that, the SMEs majorly possess the UK market, the large business
organisations also play a fundamental role in determining the financial system of the nation.
The economic performance of a country can be determined by considering the amount of
large business organisations operating within the country.
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Critically examine how small businesses have an impact on different levels of the
economy (local, regional, national) and in an international context
In context to the local economy, the small businesses are witnessed to facilitate massive
growth by offering employment to the local workers who may not be able to acquire jobs at
large organisation. When considering economic growth in regional context, it has been
viewed that, the SMEs being innovative in nature has brought about various changes and
transformations in the market; thereby, increasing scope for financial growth for the business
as well as the regional economy. Being one of the major players in the market, the small
businesses are giving huge competition to the large sector organisations with its innovation
and mass employment; thereby, significantly contributing towards the national economy.
Furthermore, with globalisation, the small businesses are now able to expand across borders,
which in turn have facilitated the companies in earning better profits and market share (Liñán
and Fernandez-Serrano, 2014). This has also significantly facilitated in improving the
economy in a global context.
Determine the characteristic traits and skills of successful entrepreneurs that
differentiate them from other business managers
Every flourishing entrepreneur possesses certain skills, traits and characteristics that
distinguish them from erstwhile business persons. Some of the common characteristics and
skills of successful entrepreneurs are discussed below:
Self-confidence
Self-confidence is one of the major characteristics that every entrepreneur must possess. It
refers to how individual feels concerning their ability to do a job. If a person lacks in self-
confidence, they might easily get demoralised and resentful (He et al., 2017).
Being competitive
In the highly competitive market, it is extremely indispensable of an entrepreneur to be
highly competitive in order to successfully run his/her business. When the entrepreneurs are
competitive, they ensure coming up with creative and innovative business ideas; thus,
improving their performance and productivity in the market.
Communication skill
When running a business, it is important for the entrepreneurs to have good and effective
communication skills, as they need to ensure maintaining clarity and transparency when
communicating with the key stakeholders (He et al., 2017). Having good communication
skills will facilitate the entrepreneurs in putting out their business ideas more effective to the
stakeholders; thus, being able to perform better in the market.
Decision-making skill
In order to run a successful business and survive in the highly competitive market, it is
necessary for every business organisation to make proper business decisions. Therefore, it is
important for the entrepreneurs to encompass fine decision making ability, as it will help
him/her to take better decisions; thereby, ensure better progress and expansion of the
business.
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Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation
and mind-set
The entrepreneurial mind-sets and motivation highly depends upon the personality and
characteristics of the entrepreneurs. In a number of instances it has been witnessed that
entrepreneurs with their unique personalities have ensures successful growth of their
businesses. For instance, “Steve Jobs, the founder of Apple”, was considered an
entrepreneurial prodigy (Carey, 2017). He was known for his effective communication and
decision making skills. Additionally, “Bill Gates, the founder of Microsoft Corporation”, is
also believed to be one of the most flourishing entrepreneurs of his time. The development
and growth of entrepreneurs depends significantly on a number of factors such as, cultural
trends, family background, lifestyle, education, financial condition, experience and so forth.
The values and traits that the entrepreneurs take in from the above mentioned aspects play a
vital role in determining their entrepreneurial mind-set.
Explore and examine different lines of argument relating to entrepreneurial
characteristics
In the view of the fact that, different entities have different entrepreneurial characteristics
differently, the question of “whether an entrepreneur is born or made” still pertains. In the
words of “Jamal Edwards, the founder of SB.TV” stated that, an entrepreneur is only 5
percent born with inherent characteristics and the rest of the 95 percent of the abilities are
gained and nurtured through different experiences in life. On contrary, Doug Richards, the
founder of “Schools for start-ups”, argued stating that, entrepreneurs are not born. He further
added that humans possess enormous ability for change and therefore can adopt the traits and
characteristics of being a thriving entrepreneur (Forbes.com., 2019). Hence, it can be stated
that, different entrepreneurs have different perceptions and opinions of whether an
entrepreneur is born or made.
Analyse the characteristic traits, skills and motivational drivers of successful
entrepreneurs, supported by specific examples
In order to analyse and assess the skills, characteristics and motivational drivers of
flourishing entrepreneurs, the following instances have been considered:
 Steve Jobs held a strong vision and a risk taker. These were his key characteristic
traits that facilitated him in becoming a successful entrepreneur and ensure long term
growth of his business. He further posses highly effective communication skills,
which facilitated him in motivating his employees and challenging their limits;
thereby, enhancing their productivity and capability of being innovative and
competent (Carey, 2017). His self-confidence and passion for excellence were the key
drivers of success of his business.
 Bill Gates is known for his highly competitive characteristic. The entrepreneur is
highly motivated and open to changes. Furthermore, he accepts fair criticism, which
allows him to improve his flaws and perform better. In addition, Gates is highly
visionary and knows how to prioritise different task. He has great communication and
time management skills. His business ideas and smart work are the key drivers of his
success (Carey, 2017).
Examine, using relevant examples, how background and experience can hinder or
foster entrepreneurship
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The experience and background of a person significantly fosters or hinders entrepreneurship.
The key factors that can hinder otherwise foster entrepreneurship is studied below:
Family background
The background of every individual also affects entrepreneurship to certain extends. If a
person belongs to wealthy relations, he/ she will not hesitate to begin a fresh business and
will be keen to take any risk that might occur, as they are not much anxious of the investment
required for the business. On contrary, individuals belonging from a less financially stable
family will hesitate in investing upon a business idea, as he/she will be fearful of incurring
loss. For instance, Bill Gates belonged to financially stable family where his mother was a
“board of directors” of a renowned company and his father, a successful lawyer
(Thefamouspeople.com., 2019). This may have instigated Gates to take the risk of opening up
a business; thus, fostering his entrepreneurial skills and ability.
Education
Education plays a significant role in inculcating entrepreneurial values and ideas among
individuals. It further allows the individuals to gain the ability to study and understand the
business environment; thus, being able to make better decision when running a business.
However, this may not be applicable in every instance. For example, Steve Jobs, one of the
top most entrepreneurs, was a college dropout; thus, presuming that had limited education but
still possesses effective entrepreneurial skills (Tobak, S., 2015). Hence, it can be stated that,
education may not always hinder entrepreneurship.
Analyse the link between entrepreneurial characteristics and the influence of personal
background and experience to specific successful entrepreneur
The personal background and understanding of an individual plays an imperative part in
determining their entrepreneurial characteristics. The impact of social status and birth order
has a strong impact upon the characteristics of an individual. For instance, if an individual’s
father or mother is self-employed or entrepreneurial, there are higher possibilities that the
individual will inspire to become one, as he or she will acquire various entrepreneurial skills
and traits such as, independence, flexibility, effective decision-making, and so on. For
instance, Bill Gates’ mother was a successful business woman, which helped Gates in gaining
necessary entrepreneurial characteristics. On the other hand, if an individual has experience
of doing business in his/ her, they will possess better entrepreneurial traits and skills, as they
are already aware of the processes and risks associated with doing a business
(Thefamouspeople.com., 2019). Additionally, if an individual experiences a loss in business
in the past, he/she may not be willing to commence a new business later, as they do not wish
for incurring further losses.
Critically evaluate how background and experience influences entrepreneurs, both
positively and negatively, by comparing and contrasting examples
An individual’s experience and background plays a significant role in determining their
entrepreneurial characteristics and traits. For instance, “Bill Gates was born in an upper
middle-class family”. His mother was actively involved into leadership. His father was a
lawyer. The gates family enjoyed a stable condition and always encouraged the children to be
competitive and struggle for excellence (Biography.com., 2019). Gates significantly inherited
the qualities of both his parents, which further facilitated him in being one of the top most
entrepreneurs in the world. In addition to this, his throughout experience in and outside Apple
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has further facilitated him in gaining better experience; thus, being able to gain excellence in
the industry. Hence, it can be stated that, the personal and family background and experience
of an individual can both positively and negatively influence their entrepreneurship.
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