Business Entrepreneurship and Small Business: A Comprehensive Analysis

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BUSINESS ENTREPRENEURSHIP AND SMALL BUSINESS
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Table of Contents
Introduction......................................................................................................................................3
Task 2...............................................................................................................................................4
Task 3.............................................................................................................................................12
Conclusion.....................................................................................................................................18
Reference list.................................................................................................................................19
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Introduction
Entrepreneurs can bring changes to the society and modify lifestyle of people by bringing
innovation. Moreover, successful entrepreneurial ventures contribute to the economy of the
country and provide people with several job opportunities. In recent times, number of small
businesses has also been increased significantly in UK. According to a report, total employment
in small business enterprises are more than 16.3 million among the total population of UK.
Annual turnover of such SME’s have been increased to £2.0 trillion, which can be considered as
52% of the entire turnover in private sector (statista.com, 2019). In this study, entrepreneurial
and small business ventures will be analysed for understanding entrepreneurial spirits.
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Task 2
Executive summary
In this report, Concepts and roles of small businesses in development of country economy hasd
been discussed. Therefore, small business enterprises of different regions will be compared
followed by SME’s of different countries. Additionally, SMEs of two EU countries will also be
compared for better understanding. Additionally, a set of recommendation have also been
provided for guidance.
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Background
SME in the UK community increases job opportunity and therefore, it creates a positive impact
on job opportunity in front of common people of UK. Retail industry of UK provides huge
contribution to the UK’s GDP rate than the other industries such as construction, automobile and
so on. However, Brexit creates a negative impact on SME and it creates hindrance on their
business opportunity in recent community of UK. Therefore, government of UK need to
reconstruct their cash flow strategy and taxation policies so that SME can get ample of
opportunity to explore their business.
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Introduction
In this section, definition of small medium enterprise (SME) will be described in the section
along with its impact on financial status of UK. Present scenario of construction and retail
industry of UK will be added in this section. Two location of UK will be considered in order to
interpret importance of SME in UK’s economic condition.
a. Define the concept of an SME, and evaluate the growth and financial contribution of
micro, small and medium private organisations to the UK Economy.
SME (Small and Medium enterprise) are independent firm, which has fewer employees that is
less than 500 employees. However, it plays a vital role in the economic condition and job
opportunity of the community.
b. Examine the role of SME’s and analyse how they contribute to the national economy.
Your analysis must contrast the following:
A) Compare the impact of SME’s for two UK regions;
Growth of the SME in UK has improved technological factor, labour supply, along with financial
independency of the community. It has been observed that in UK, SME has enhanced employee
turnover rate of about 19% in the year 2015 and henceforth, it creates a positive impact on job
opportunity rate, which has been increased up to 33%. Furthermore, in London, it has been
noticed that SME has increased job opportunity in front of recent community approximately 15.2
million jobs that has increased lifestyle of community (Parliament.uk, 2019). It has been
monitored in London that SME’s 127% revenue are utilised by UK in their trade activities and it
automatically maximises globalisation concept among entrepreneurs of UK. Therefore, it can be
easily analyse that SME in UK plays an important role to raise financial condition and lifestyle
of UK people as it creates job opportunity in front of people.
In case of Scotland, it has observed that Brexit creates huge negative impact on SME due to
which small organisation has to liquidate their activities due to huge number of logistic issues.
On the other hand, it has been monitored that 98% Scottish government are small in nature and it
provides 42.4% of total employment. Total employment rate of SME is 50% where about 2.3
million people are working and therefore, it creates a positive impact on employment factor
(Wallmeroth et al., 2018).
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Figure 1: Current scenario of Scotland due to SME
(Source: Gov.scot, 2019)
It has been monitored that private organisations in UK has increased their annual turnover of
about £1.9 million in the year 2016. Moreover, it is found that in London there are 805085
private and small organisation in London due to which it creates a positive impact on the
financial condition of the society. In other parts of UK also such as Northern Ireland, Wales also
generated about 16.3 million-employment opportunity in front of the recent community
(Parliament.uk, 2019).
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Figure 2: Employment rate in London
(Source: Gov.scot, 2019)
However, Brexit is the prime issue due to which SME in different location of UK cannot execute
their business activity perfectly in their concerned community. Furthermore, political factor is
another issue that creates hindrance on current business procedure of SME and it adversely
affects GDP rate of UK. Therefore, it can be said that UK government needs to modify their cash
flow system so that employees’ and SME can improve their business opportunity in
contemporary market.
B) Compare the impact of SME’s for the UK utilising two different industries
Small businesses meet the recent perceptions and needs of consumers and it also raises
employment opportunity in front of both local people and outsider of the community. As per the
recent business report, two third of SME in UK are run by single person and less than 50
employees are present in the enterprise (Parliament.uk, 2019). In construction industry of UK,
it has been noticed that growth of UK’s industry is quite slow due to intense increment of
material prices. Two third of construction business in UK are struggling due to shortage of trades
people, raw material cost and scarcity of well trained employees as Brexit has reduced talent hub
rate.
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On the other hand, it has been observed that retail industry creates a positive impact on UK’s
GDP rate. In the year 2016, retail industry has improved their profit margin up to 76%. Green
policies have been implemented in the retail industry of UK. For instance, paper bag is used
instead of plastic bag in order to make the environment greener in nature. Retail industry
services the basic requirement of people with accurate price rate. Furthermore, there is presence
of online delivery service that also improves GDP rate of the country up to 17% in the year 2017
(Prospects.ac.uk, 2019). Therefore, it can be analysed that retail industry acts as a multiplier
effect as it raises job opportunity, economic condition of the country and maximises
communication factor between employees and customers by the help of advanced technology.
Below table shows current condition of retail industry in the UK.
Table 1: Current scenario of retail industry in UK
(Source: Prospects.ac.uk, 2019)
There are presences of 192 thousand registered retail industries in UK and this registered retail
industry increases 72% GDP rate of UK. It has been noticed that increment of online service
delivery in retail industry also speed up the business opportunity of this retail industry and on the
other hand, due to lack of effective construction project plan and tradesperson eliminates
business conditions of construction industry in UK. Retail sector contribution in UK’s economy
is huge in nature and retail sales in UK in the year 2017 were £350 billion (Prospects.ac.uk,
2019).
C) Compare the impact of SME’s for two EU countries: Germany and UK are two EU
countries. There are around 5.7 million SME’s in UK as of 2018 (fsb.org.uk. 2019). Small
businesses in UK have accounted for 99.3% of all the private sectors (fsb.org.uk. 2019). It is
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analysed that small businesses employs around 16.3 million people of the total population.
Annual turnover of these SMEs are £2.0 trillion, which is around 52% of the total turnover of
private sectors (merchantsavvy.co.uk. 2018). This can be observed that small businesses in UK
have grown significantly in past few years. Most of the SME’s in UK operate business in
construction sector.
Figure 3: Growth of SME in Germany
(Source: statista.com, 2019)
According to another report, there are more than 2.45 million small businesses in Germany with
an increment of 360000 employees as compared to 2011 (statista.com, 2019). Micro enterprises
tend to dominate the small businesses in Germany. However, 17% SMEs in Germany are of
medium size and there are only 8% micro enterprises in Germany (statista.com, 2019). Total
revenue of small businesses of Germany is between 50 million to 1 billion EUR (statista.com,
2019). This has been observed that most of the small businesses in Germany operate business in
Retail sector. UK has decided to leave EU recently so that will leave a negative impact on small
business, as these businesses will lose some of its employees. Small businesses in Germany will
be able to maintain their employee retention process and grow more.
Recommendation
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 More facilities and lower import export rates should be provided to the small businesses SME access should be opened up to public procurement Businesses should be supported with resources and advices Alternative finance proposals should be provided to the small businesses A prompt payment code should be created
Conclusion
Thus, it can be stated that the small businesses are successfully contributing to the UK economy.
Small businesses of different region, different country and different EU countries have been
compared for better guidance. However, a set of recommendation has been provided for guiding
purpose.
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Task 3
Introduction
Entrepreneurial spirit is a mindset or an approach that helps to think actively for bringing new
changes instead of waiting for adapting change. This mindset embraces innovation,
communication, questioning and logical thinking for improvement of the work that they are
doing. In this section, a case study of nom foods will be analysed for understanding the
entrepreneurial spirit of its owner.
Discussion
It is stated that the term ‘manager’ often contrasts with the term ‘entrepreneur’, as they are
responsible for organisation management and controlling of a company. Manager plays a key
role in managing functions and operations of an organisation. Managers are only concerned
about a job being done on time and they try to select traditional business models so that the risks
can be avoided (Velu and Jacob, 2016). On the other hand, entrepreneurs try to bring innovation
to the organisation and create new visions of improving standard of living by new and innovative
ideas. Entrepreneurs are those persons who create an organisation by taking financial risks (Lee,
2019). They focus on starting up a new business where as a manager focuses on the ongoing
operations only.
Entrepreneurs are motivated by achievement and they have very informal approach to tasks but
managers have a very formal approach to the tasks and they are motivated only by power.
Entrepreneurs are owners of the specific business and their reward is profit but managers are just
an employee of the organisation, they can be rewarded by salary only (Dew et al., 2018).
Entrepreneurs have intuitive decision-making skills. Intuition refers to the ability of having a
grab on the information or situation without the requirements of reasoning. Managers follow the
calculative decision making skills so that they can be able to protect the business from any
financial risks. Entrepreneurs are generally known as risk takers but the managers are mainly risk
averse. These are the differences between an entrepreneur and a manager.
Entrepreneurs have numerous skills, which helps them to grow their business. Entrepreneurs
need to develop some characteristics for achieving business objective. For example an
entrepreneur needs to be disciplined and confident about their steps. If they show their
confidence in front of their subordinates, they will be able to promote positive attitude in the
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