Entrepreneurial Ventures and Mindset: An Analysis of UK SMEs

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ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT

Table of Contents
INTRODUCTION........................................................................................................................2
Assessment 1- Entrepreneurship ventures (LO1 and LO2).......................................................3
P1 Different types of an entrepreneurial venture and its relation to the typology of
entrepreneurship................................................................................................................. 3
P2 Similarities and difference between different entrepreneurial ventures........................6
M1 Diverse range of entrepreneurial ventures demonstrating the understanding of
entrepreneurship in both public and corporate sector........................................................8
P3 Relevant data illustrating the impact of micro and small business on the economy.......9
P4 Importance of small business and business start-ups to social economy growth.........11
M2 Relevant data and statistics to determine the difference made by SMEs and large
organization to the UK economy........................................................................................12
ASSESSMENT 2- EXPLORATION OF THE ENTREPRENEURIAL MIND-SET.................................14
CONCLUSION.......................................................................................................................... 27
REFERENCES........................................................................................................................... 28
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INTRODUCTION
In recent years, it is observed that the small scale businesses played a vital role in
developing the economy as well as a community representing the growth in importance of
entrepreneurship in the UK. Their contribution includes the enhancement in the supply
chain, generation of employment opportunities and also supports the local communities
(Schaper, 2016). This assignment includes 2 assessments that demonstrate the significance
of entrepreneurship and entrepreneurial ventures and entrepreneurial mind-sets. In
assessment 1, different types of the entrepreneurial venture are examined and also
statistical data is presented determining the impact of small and micro businesses on the
economy. In assessment 2, a PowerPoint presentation is produced differentiating the
characteristics of successful entrepreneurs from other business managers. It also assesses
the different aspects of personality that reflect the motivation as well as the mindset of
entrepreneurs. It also explores the impacts of personal situational factors including
background and education.
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Assessment 1- Entrepreneurship ventures (LO1 and LO2)
Introduction
This report is focused on investigating different types of ventures as well as their impact on
the economy.
P1 Different types of an entrepreneurial venture and its relation to the
typology of entrepreneurship
Entrepreneurs: entrepreneurs are the individuals who undertake innovations, finance and
business insights with an attempt to change the innovation into economic goods. They are
the market leaders who bring a new concept in the market and introduce change as
compared to their competitors (Brown et al., 2018). An individual is the one who conceives
the idea to start a new business venture by taking all types of risks, time and cost to produce
the product and services for the customers but also make it extremely demanding.
Entrepreneurship: entrepreneurship and entrepreneur defined by Peter F. Drucker as the
entrepreneur who always searches for changes in order to respond to it and also exploit is
as an opportunity. It is neither art nor science. It is a discipline and practise based on
knowledge (Munari and Toschi, 2015).
TYPES OF ENTREPRENEURSHIP VENTURES:
Entrepreneurs are classified into different types on the basis of their classification.
Entrepreneurship Based On Ownership:
Private: this entrepreneurship venture is run by a private group of individuals whose major
focus is no to earn profit rather than focus on social welfare (Fraser et al., 2015). Continuous
growth and development is their main aim and also attempts to improve their products and
services at regular intervals.
Public: this enterprise is often referred to as a state enterprise and is undertaken by the
government. Their main aim is to create high value to society and community and does not
have any fixed shareholders (Fraser et al., 2015). This business follows traditional routines
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and procedures and does not involve high-risk activities. For example, London boroughs are
the public sector entrepreneurship operated in London.
Voluntary: the main purpose of this type of enterprise is to maintain the benefits of society
and societal welfare so as to ensure growth and development of society. This
entrepreneurial venture aims to enhance the livening standards of society by providing basic
amenities as well as facilities (Rivera-Santos et al., 2015).
Entrepreneurship Based on the size of the enterprise:
Small-scale: microenterprises are those that comprise employees less than 10 in number
and generate a turnover under £2 million. Small business includes employees not more
than 50 and must generate the turnover under £10 million (De Massis et al., 2018).
Medium-scale: medium scale business comprises the employees limited to 250 and
generates a turnover of about £50 million (De Massis et al., 2018).
Large scale: large scale organizations are those who employ individuals more than 250
employees and generate revenue of more than £50 million (De Massis et al., 2018).
Entrepreneurs based on gender:
Men: men entrepreneurs are those male individuals who own, manage and control the
business enterprises.
Women: the enterprises that are controlled and management by a woman or women are
women enterprise, however, it must have a minimum interest of 51 per cent of capital and
also at least 51 per cent of the employment generated in the enterprise is given to women
(Bruton et al., 2015).
Serial entrepreneurs: these are those entrepreneurs who set up and develop the business
to a certain stage in order to be sold or handover to a successor as per their pre-determined
exit strategy but retain some degree of strategic input or investment with the view to repeat
the process again (Bruton et al., 2015).
Intrapreneurs: intrapreneurs are the corporate entrepreneurs that include those employees
of the organization who are authorised to initiate creativity and innovation in the products
services and projects of the company or redesign the processes and system to transform
into a successful business venture.
Lifestyle entrepreneurs: these are the entrepreneurs who reflect their passion and focused
on doing things they love rather than starting the business with a profit motive (Bruton et
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al., 2015). It may include the thoughtful choice to fit the business considering their way of
living.
Social entrepreneurs: social entrepreneur's main aim is to provide a solution to various
social problems. They provide products and services with intend to create social good and
also operates on the perspective of the triple bottom line. The profits are not distributed to
shareholders rather it is reinvested into the enterprise. For example, Divine Chocolate, Big
Issue, and Belu are social entrepreneurship
Independent entrepreneurs: this is one man band referring to an individual who operates
and manages all the aspects of business themselves (Welter et al., 2017). The advent of
technologies made it easy to perform several tasks with ease and can also outsource a
specific task to freelancers available.
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P2 Similarities and difference between different entrepreneurial ventures
The similarities, as well as differences among the entrepreneurial ventures, are presented
below:
Types of entrepreneurial
ventures
Similarities Differences
Private The venture is similar to
other entrepreneurial
ventures being customer
oriented that is to serve the
people.
The main motto is to earn
more profits and ensure the
company's growth Bruton et
al., 2015).
Public The venture is providing
similar opportunities to
employees and also have an
aim for growth and
development.
The main aim is to work for
the public and profit is
retained by the government.
Social This entrepreneur put their
efforts in the development
and welfare of the people
which means it is public
oriented.
The profit is not distributed
among the shareholders
instead of reinvested in the
enterprise.
Lifestyle The venture is focused on to
meet the individuals’
requirement and has
uniform basic business
activities (Welter et al.,
2017).
Limited opportunities for
growth and low focus on the
earning profit from the
enterprise.
Serial Here the entrepreneurs carry
out all the activities required
in the planning and
development of an
enterprise.
The entrepreneur set and
develops the enterprise and
move on by selling or
handing over it to others
with the view to repeat the
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process.
Social Like other entrepreneurial
ventures, risks are taken to
manage and maintain
business activities to secure
the mission of the company
(Bertoni et al., 2015).
A major focus of social
entrepreneurs in this
enterprise is to work on
social welfare and enhance
the living standards of the
people.
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M1 Diverse range of entrepreneurial ventures demonstrating the
understanding of entrepreneurship in both public and corporate sector
Intrapreneurship is prevalent within the organization in the current corporate sector.
Although not every employee within the organization can be a successful entrepreneur.
There are some people who take well-developed strategic actions, use their teamwork and
communication skill to convert the ideas into innovative products and services and generate
profit for the organization (Dada et al., 2015).
Intrapreneurship is encouraged and allowed by top management to flourish in the routine
operations of the business. There are certain attributes that serve as innovation inhibitors.
The mission and purpose are the public sectors are imposed by the external political forces
whereas the mission and purpose of the corporate sector create from free economic signals
of the market (Wallmeroth et al., 2018). The employees are offered incentives commonly in
the corporate sector while employees in the public sector are not offered share from the
profits.
Corporate businesses aim to achieve their profits in comparison to the public sector which is
not profit-oriented. Employee work ethic, its professional competence and the degree of
resources provided politically affect the public sector performance (George et al., 2016).
Public sector enterprise is rigid as compared to private sector enterprise as they have the
ability to establish their own culture and management system.
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P3 Relevant data illustrating the impact of micro and small business on the
economy
In recent years, a trend is observed within the UK as more and more small businesses are
being initiated every year. The UK economy is largely supported by these small businesses.
The reason for the increase is the grants and loan availability to start the businesses. The
role of small scale business has grown and contributes to the economic development of the
UK. There are currently 5.7 million private sector SMEs in the UK in 2018 as compared to 3.5
million private sectors SMEs in 2000. It is observed that 63 per cent of increase is observed
in the number of businesses since 2000 (Rhodes, 2018).
There is a decline in the proportion of business with employees since 2000 from about one-
third to about a quarter. Growth in self-employment is the reason for the decline in the
number of employers (Rhodes, 2018).
Figure 1 number of private sector business in the UK, 2000-2018
Source: Rhodes, 2018
99.3 per cent of total private sector businesses were small businesses accounts for at the
start of 2018 and SMEs accounts for 99.9 per cent. 16.3 million, that is, about 60 per cent of
the all private sector employment is generated in SMEs in the UK. £2 trillion was combined
annual turnover of SMEs which is 52 per cent of all private sector turnovers (Rhodes, 2018).
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The research of Hampshire Trust bank and Centre for Economics and Business Research
(CEBR) reveals that there is a growth of 11 per cent from 2015 to 2020 with the current
contribution of £196 billion of business. It is forecasted that the contribution of SME across
10 UK cities may hit £217 billion to the UK economy by 2020 (Rhodes, 2018). London is
home to SMEs and contribution of SMEs is expected to rise from £149 billion in 2015 to
£164 billion by 2020 which is about 76 per cent of total SME contribution to the UK
economy (Rhodes, 2018).
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P4 Importance of small business and business start-ups to social economy
growth
It is been observed that the UK economy has faced a combination of issues such as an
increase in consumer price inflation as well as dampening the real income growth of
household which resulted in limited spending by consumers. The UK economy was
underperforming in comparison to other European competitors (Wallmeroth et al., 2018).
During this time it was recognised by the state that the growth in small business helps in
developing the economy.
The importance of the SMEs can be determined by their economic contribution of the
combined turnover that is £2 trillion in 2018 which is about 52 per cent of the total turnover
of the private sector. About 16.3 million people were employed by the SMEs in the UK
which accounts for 60 per cent of the total employment in the private sector (Rhodes,
2018). SMEs are said to have to do their best as about 50 per cent of the SMEs express to
expand their operations along with record high rate of employment. SMEs have become a
vital part of the core industries such as manufacturing, retailing and repair of motor vehicle
and are essential for the overall economy of the country.
Small business has become the backbone of the UK economy as it drives the growth, create
job opportunities and open new market. Small businesses, as well as start-ups, have
positively contributed to the growth of innovation by encouraging the competition through
the generation of new metrics to do business (Wallmeroth et al., 2018). Some of the
examples of innovation disruptors are Airbnb, Uber and Funding circle that stimulated their
respective industries and created new grounds to build and compete with businesses. SMEs
generate the employment opportunities for the individuals in the UK and also improve the
local economy resulting in an increase in the living standards thus contributing to the social
economy (Dada et al., 2015).
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