Entrepreneurship and Small Business Management: A UK Focus

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ENTREPRENEURSHIP AND
SMALL BUSINESS MANAGEMENT

TABLE OF CONTENTS
Task 2.........................................................................................................................................1
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. Your analysis needs
to be based on the last 5 years and must include potential political and economic factors
that might have either stimulated or halted the development of SME’s in the country.........1
b. Examine the role of SME’s and analyse how they contribute to the national economy.
Your analysis must contrast the following:............................................................................4
TASK 3......................................................................................................................................8
1. Explain the difference between an entrepreneur and a manager........................................8
2. Explain what are the entrepreneurial characteristics and skills an entrepreneur needs to
have in order to achieve success............................................................................................8
3. Utilise the Big-5 Model and analyse Croft-Simon’s entrepreneurial personality............10
4. Utilise Maslow’s Pyramid and analyse if there is a correlation between entrepreneurial
characteristics and entrepreneurial success..........................................................................11
5, 6. Analyse other factors that can foster or hinder entrepreneurial success (your analysis
should include education, financial status, and demographic factors). Critically evaluate
the influence (both - positive and negative) of background and experience on
entrepreneurs........................................................................................................................13
REFERENCES.........................................................................................................................15
Figure 1: Growth of small business size....................................................................................2
Figure 2: Growth in terms of employment.................................................................................2
Figure 3: SME contribution in raising economy level of the UK..............................................3
Figure 4: Impact of SME for two UK regions...........................................................................4
Figure 5 Impact of SME's for the UK utilising various industries.............................................5
Figure 6 Five-Factor Model of Personality..............................................................................11
Figure 7 Maslow's Pyramid......................................................................................................12

Task 2
Introduction
Entrepreneurship plays a vital role in small medium enterprise that it helps in managing
business in profitable manner. It also helps in improving economic condition off the country
by providing number of job opportunities for local people. In this regards, the report will
cover the impact of small and micro businesses on the UK economy with relevant statistics
and data. Further, start-ups and small businesses importance in increasing growth of social
economy at different levels will be discussed.
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. Your analysis needs to
be based on the last 5 years and must include potential political and economic factors that
might have either stimulated or halted the development of SME’s in the country.
Small medium enterprises are those businesses whose personal numbers falls below the
criteria set by the government. It is categorised on the basis of sales, number of employees,
assets and combination of these (Kirkwood, 2016).
It can be said that there is a great impact of SME such as micro and small businesses on the
economy of the UK. They provide contribution in both financial and economic terms for the
growth and development of nation effectively. Hence, both micro and small organisations are
effective in maintaining the financial and economic stability. These businesses can be also
defined as backbone of the economy development in the UK. There are number of growth
opportunities are produced by these businesses such as employment etc. that helps in
improving the living standard of people.
Size of small business in private sector
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Figure 1: Growth of small business size
The above graphs clarify the size of business in terms of number of employees. In 2018, there
were about 5.7 million businesses in UK. The figure has been increased since 2000 and
currently 99.9% of all private sector business in UK is SMEs. 0.6% is being classified as
medium sized business and about 95% are being treated as the micro business.
Growth of employment in UK by different business
Figure 2: Growth in terms of employment
The above chart clarify that from years businesses is being facing the gradual rise and
employees are also growing along with this. But more preferences is being based on starting
own business that adds to generate revenues in the economy.
Growth
From the below statistical data, it can be said that small and micro businesses are contributing
more than 99% as compared to the private and other large businesses. The statistical data also
shows that the small and micro businesses has turnover of 51% in past decades (Business
statistics, 2019). Thus, the micro, small and medium size enterprises are contributing well
towards the development and growth in the UK economy. These are also essential for the
development in some major sector such as GDP, employment opportunities and UK
manufacturing sector.
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Figure 3: SME contribution in raising economy level of the UK
It can be said that the sales revenue generated by the SME organisations is 1.9 trillion which
shows that these organisations are contributing effectively for the growth and development in
economy level. These businesses are on 2nd position in terms of improving economic
condition of the nation as reflected in the above data and statistics. These are also managing
the financial stability within nation by increasing use of local currency to sell products and
services. However, there is a great impact of Brexit on the UK economy but the SME has
managed the financial and employment stability within nation (Williams and Gurtoo, 2016).
Local people are provided with employment which is increasing their living standard and also
GDP. One of the major issues of every country is poverty which has a major impact on
economic growth. In this regards, SME’s provide number of job opportunities for the local
people that helps in addressing the poverty issues to enhance the GDP rate. In this way, Small
and micro businesses are contributing towards the growth and development in economy to
establish financial stability effectively.
There are both good and bad impact of SME in the UK in terms of economic condition. The
positive impact can be described as the established balance of currency rates within nation
and also increasing number of opportunities for people to develop and grow. The negative
impact is that the scope of these organisations is not vital and also affected by the political
and economic environment. However, the political environment of the UK has a major
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support to these organisations in terms of managing tax, tariff rates and policies to ensure
growth. The post-referendum in UK also has impact on both economic and financial
condition of nation which is affecting the SME.
The economic environment of the UK is affected due to the major impact of Brexit. After the
impact of Brexit, SME has contributed more than enough to maintain the financial and
economic condition of the UK. The political environment has also changed after this and
becomes more flexible in terms of supporting SME within nation (Kozubíková, Homolka and
Kristalas, 2017). In this regards, policies regarding regional development have been
introduced to manage the regions sufferings. This has improved the ways SME are operating
in order to ensure growth and development to improve economic and financial stability
effectively. In addition, both political and economic factors have major impact on business
environment.
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;
UK has highest ratio of SME, calculated by comparing the businesses in terms of 10,000
adult’s residents in each region of the nation. There are three other regions such as the South
East, South West and East of England that are above the UK average. From the data and
statistics, it can be said that UK businesses are located in South East or London while the
East of England and South West produce high SME rate and each region has similar growth
rate of 3-5% in terms of operating business (Edoho, 2015). In this regards, the impact of SME
for two regions in UK are provided below:
Figure 4: Impact of SME for two UK regions
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B) Compare the impact of SME’s for the UK utilising two different industries (for example,
retail and construction)
Service sector within UK for SME is very broad with no surprise. In the UK, there are 74%
businesses are operating in service sector and 18% in the construction sector. Scientific and
professional services within service sector in the UK are also very broad including marketing
to legal services and much more. Only 10% is of retail businesses of entire UK business,
employ 19% private sector employees which generates 33% turnover (Savvy, 2018). In
addition, in this whole process, SME is contributing very effectively to the UK economy.
They are very crucial in managing the economy level and financial stability. 99.9%
businesses are SME in Britain and generating 51 % of turnover even it is managed by sole
traders without any workers. It can be said that the working conditions are very much better
for employees in smaller businesses as SME employ 60% of UK population. from the below
data, it can be said that the impact of service, retail, construction and other sectors is different
in terms of improving economic growth and development in the country.
Figure 5 Impact of SME's for the UK utilising various industries
C) Compare the impact of SME’s for two EU countries
The impact of SME’s on EU countries such as on Malta and Poland can be compared through
its contribution for the growth and development in terms of employment opportunities,
innovation, facilitating exports etc. It can be said that SME’s in Malta is considered as key to
ensure innovation, economic growth, social integration and employment opportunities.
However, the SME’s statistics is identified on the basis of employment size such as
organisation with less than 250 workers. In Poland, SME’s is increasing job opportunities for
people in service sector to improve living standard of people in terms of income, social
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economy and social ventures (Abubakar, 2015). In addition, these SME’s are loyal towards
managing their corporate social responsibility to become responsible towards economic,
social and environmental factors in both Malta and Poland effectively.
It is concluded from this that SME’s contribution to service, construction and retail sector
including GDP as a whole is effective and value added. Through export promotion, it also
helps in mitigating issues regarding imbalance of payment accounts. They also reap benefits
of lean manufacturing to find new cost effective techniques. The involvement of risk is also
low in SME so that resources can be employed at large numbers. Further, they are
contributing towards the national economy through providing services in various regions and
different sectors. The impact of SME on EU nations is also very effective and vital which is
beneficial for the improvement and growth in economy level effectively.
SME growth in social economy
It can be said that SME plays a major role in increasing economic growth and development of
the UK in terms of employment opportunities, production, contribution to exports and
facilitating equitable income distributions. These businesses are also effective in supplying
essential products and services for mass exports and consumption. They also stimulate
economic growth in far-flung and rural areas. There is a great importance of start-ups and
small organisations in enhancing social economy growth by providing services, job
opportunities, developing economy level in regions and communities, offering innovation and
helping competition (Neergaard and Leitch, 2015). They also provide employment
opportunities for those people who are unable to be employed by large businesses. The UK
government is also extending different steps towards SME and supported by policies such as
infrastructure, updates technology, credit access etc. SME’s are increasing income of people
in order to maintain the financial stability and to provide social benefits that are crucial to
improve economic condition of the country effectively.
Conclusion
It is concluded that the micro and small organisations are very effective in raising economy
level within nation by providing employment, growth and development opportunities.
Further, these businesses are also improving the financial stability to improve and develop
living standard of people living in the UK. However, economic and political factors such as
changes in tax, policies, tariff rates etc. have impact on these organisations in terms of both
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good and bad. It can be said that an effective business environment has effect on poverty
within country by stimulating economic.
It can be concluded from the above report that there are both good and bad impact of SME in
the UK in terms of economic condition. It is analysed that these business are improving the
financial stability to improve and develop living standard of people living in the UK. SME
plays a major role in increasing economic growth and development of the UK. The impact of
SME on EU nations is also very effective and vital which is beneficial for the improvement
and growth in economy level effectively.
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TASK 3
Introduction
Essay discussed about the characteristic skills and traits of successful entrepreneurs. In
addition, how entrepreneurial aspects and personality reflect mind-set and motivation of
entrepreneurial will be explained. Finally, the report will demonstrate how experience and
background of an entrepreneur can hinder or foster entrepreneurship.
1. Explain the difference between an entrepreneur and a manager
Entrepreneur: Entrepreneur can be defined as a person who creates a new business and bear
all the risks and rewards of it. The person is responsible for taking financial risks to make
profits. The person acts as decision maker to organise a business to take advantage of
opportunities and benefits.
Manager: Manager is a person responsible for administrating and controlling a group of staff
or organisation according to its vision and mission (Monllor and Murphy, 2017).Manager
within an organisation is in charge of managing group tasks to guide people towards their
roles and responsibilities.
The major difference between manager and entrepreneur is their roles within business. An
entrepreneur is the owner of organisation and manager is the employee. An entrepreneur
takes risks such as financial for their business to make profits. In addition, a primary
difference between these two is that an entrepreneur works for themselves whereas a manager
works for someone else.
2. Explain what are the entrepreneurial characteristics and skills an entrepreneur needs to
have in order to achieve success.
It can be said that an entrepreneur requires entrepreneurial skills and characteristics in order
to become successful effectively. Characteristics and skills helps in achieving positive results
in terms of success. In this regards, characteristics of a successful entrepreneur are described
below:
Forward looking: A successful entrepreneur must have ability to anticipate opportunities,
trends and future business changes. This helps in managing business functions effectively.
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Hard working: Hard-work always pays off. In this regards, an entrepreneur must be a hard
worker to love putting hours and realising sense of satisfaction when achieving targets. It also
helps in motivating others to achieve success.
Passionate: Passion towards work or target is necessary to become motivated (Castaño,
Méndez and Galindo, 2016). In this regards, energy and true enthusiasm around the work
helps in achieving positive results in terms of success.
Opinionated: An entrepreneur must take stand for how they believe in their work. They must
be ready to take decisions regarding any situations within business. This helps in managing
work of others as well.
Confident: It can be said that confidence helps an entrepreneur to take right decisions. It also
helps people to believe that their leader is confident and mature enough to do work
effectively.
Resourceful: A successful entrepreneur always prepared for the resources required to
complete work. It is a unique talent or characteristics of an entrepreneur that helps in putting
everything together.
Positive: The attitude is very important for an entrepreneur to be clam in different situations
to take right decisions at right time and place (Momsen, 2018). Entrepreneurship is a roller
coaster where staying positive helps people to get through very low lows.
Apart from this, there are some skills which are required to become a successful entrepreneur
to achieve success such as:
Time-management: Time management skills are very useful that it helps in planning,
execution, integration, defining milestones and managing priorities. Right time management
methodology and project management helps in getting the work done.
Curiosity: An effective entrepreneur tasked to discover new issues, reveal opportunities and
refactor business procedures. This also helps in managing innovation and passion towards
various fields to conduct business cases successfully.
Strategic thinking: Strategic thinking of an entrepreneur helps in identifying growth
opportunities in order to figure out solutions that are required to deliver fruitful results. In
addition, it also helps defining scope for budget and time management.
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Resilience: Resilience such as handling stress, rejection, slow progress, determination and
focus helps in fighting issues when it comes to building an organisation from scratch
effectively.
Communication: These skills are so important that it helps in interacting with business
partners, clients, prospects and peers (Welter, Smallbone and Pobol, 2015). This also helps to
provide comprehensive understanding regarding mission and vision of business.
Networking: It can be said that growing network helps an entrepreneur to acquire growth
opportunities, future workers, partnership deals etc. This helps in increasing business scope in
terms of conveying the right message.
Hence, these are the skills and characteristics of a successful entrepreneur that helps in
achieving success in business effectively.
3. Utilise the Big-5 Model and analyse Croft-Simon’s entrepreneurial personality.
Mind-set of an entrepreneur shows the behaviour to others in terms of personality. It is a way
from which the entrepreneur sees the world’s philosophy (Wyrwich, Stuetzer and Sternberg,
2016). A successful entrepreneur such as Steph Croft-Simon, founder of Nom Foods mind-set
can be described as taking responsibility, positive actions, determining opportunities and
desire to grow business with full potentiality. In this regards, the Big-5 model will help in
determining the entrepreneurial personality of Croft-Simon. The big five personality traits are
described below:
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