Unit 9 Entrepreneurship and Small Business Management Report

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Unit 9: Entrepreneurship and Small
Business Management

Table of Contents
Task 2- Report.................................................................................................................................3
Introduction......................................................................................................................................3
LO2..................................................................................................................................................4
P3 Interpret and assess relevant data and statistics to illustrate how micro and small businesses
impact on the economy................................................................................................................4
P4. Explain the importance of small businesses and business start-ups to the growth of the
social economy.............................................................................................................................6
M2 Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics.............................................................................................7
D2 critically examines how small businesses have an impact on different levels of the
economy (local, regional, national) and in an international context............................................9
Conclusion.....................................................................................................................................12
Task 3- Essay.................................................................................................................................13
References......................................................................................................................................20

Task 2- Report
Introduction
This report is detailing about the Small Business. In this, there is a discussion about the Task 2
where the growth and financial contribution is done by the SME is detailed by further explaining
the contribution SME is making toward the overall development of an economy. It is also
specifying the potential social, cultural and economic benefits the UK is receiving with the
development of SME in the country. In this report, there is also comparison being done with the
other EU countries that are Russia and Germany by detailing the statistical information and data
related to the contribution being done by the SME in this countries and how these countries are
growing with the implementation of the SME.

LO2
P3 Interpret and assess relevant data and statistics to illustrate how micro and small
businesses impact on the economy.
SME (Small and medium enterprises) are basically the companies or the organizations which are
small in size with the limited number of about 250 employees and also the turnover of such
companies is also less than around 50 million. Most of the businesses which are being currently
operated in the UK are the small businesses and therefore these businesses are really important
for the growth and development of the economy because these businesses are having a huge
impact on the economy of UK (Harrison and Baldock, 2015).
Given below there will be a detailed discussion about the growth and financial contribution made
by the small and medium enterprises on the growing economy of the UK:
Figure 1: Employment size increased in the past years

Source: (UK Department of Business, energy and industrial energy, 2018)
The large part of the UK economy is consisting of the SMEs and because of these SME, there is
constant productivity and growth in the UK which is significantly having a strong impact on the
economic development of UK.
The basic fundamentals which can be used as the boosters for improving productivity are
innovation and expansion that will eventually be leading to an overall improvement in the export
field of the UK economy. It is noticed that SME in the UK is developing new and innovative
products and services every year which is contributing towards the gross value added annually to
the country (Cowling, et. al., 2015).
Figure 2: Valued added of SMEs
The values added of SMEs are detailed as:
 SMEs are contributing towards the economic growth of the country as it is helpful in the
creation of new job opportunities and also it is leading to the expansion of new and innovative
products.
 SME is also improving the competition in the market which is also providing with wider
options and varieties for the customers.
 It is seen that SME is contributing more to the growth rate as compared to the global
industrial sector. The SME is basically contributing generation of low capital expenditure.

 90% of the SME are aiming to improve the rate of employment and it is also leading to
the generation of new job opportunities.
 SMEs are also gradually shifting to e-business by conducting the online transaction for
the specific goods and services.
 The major contribution done by SME is coming from the fields like agriculture,
manufacturing and IT sectors.
 The development of the SME is leading to boosting the overall economy of the UK
(Wright, et. al., 2015).
P4. Explain the importance of small businesses and business start-ups to the growth of the
social economy.
The UK mostly comprises of the small business and other business start-ups which are usually
contributing towards the growth of the social economyare the following manner.
 Small businesses are generally considered as the backbone of the UK economy as this
business is providing ample job opportunities and opening up the new markets for the growth
and development of the overall economy.
 It is aiming to encourage competition in the market and developing the new and fresh
ideas based on creativity and innovative products developed keeping in mind the needs and
requirements of the customers.
 99.9% of the UK business comprises of the small and medium businesses which are
being encouraged by the people living out there.
 It is also developing a positive outlook towards the economy as it is leading to the overall
of the country as well as out of the country.
 It is stated as per the survey conducted that 55% of the SMEs are not able to sustain in
the market for more than a period of 5 years. So, survival is very important for the SME in the
UK and apart from survival the business also has to go through some other challenges and also
all these challenges must be survived for the continuous growth and development.
 The SMEs are also helpful in the development of personal relations with the respective
customers, suppliers, and the employees of the company. This personal contact and development
of relationship can lead to the overall development of the social economy (Fraser, et. al., 2015).

Figure 3: GDP growth rate of the UK
M2 Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics.
Figure 4: Small, medium and large business, employment and turnover in the UK

Figure 5: UK business engaged internationally
Given above is the information stated in the form of graphs and tables which is detailing that
how small, medium and large enterprises of UK are contributing towards the economy and what
is the proportion or share on the basis of which the contribution by each sector is made for the
overall development of an economy. From the above-stated graph and table, it can be concluded
that. In the UK the majority of the business is handled by the SME. There are very few large
firms that actually contributing to the economic growth of the country (Love and Roper, 2015).

D2 critically examines how small businesses have an impact on different levels of the
economy (local, regional, national) and in an international context.
Small business can have an impact on the different levels of an economy as it is leading to the
overall economic growth of the country as it is providing the multiple business opportunities
which will open up the new employment opportunities for an individual. It will eventually be
also improving the business practices in a country that will eventually lead to the success of the
markets nationally as well as internationally. It will also be improving the living standards of the
people living in the country that will eventually be leading to advancements in the economy. The
basic concept which SMEs is revolving around involvesemployment, opportunities, turnovers
and many other things. All these things are indirectly linked with the economy of the UK and are
also having a strong impact on the overall growth of the economic conditions (Lampadarios,
2016).
Impact of SME for UK regions
Figure 6: Impact of SME for UK regions
The image displayed above is detailing the regions and countries of the UK and how these
countries are having an impact on the country. Especially the SMEs are in 5,662 numbers and

this number is coming from the multiple regions of the UK and this shows that how the majority
of SME is contributing towards the overall growth and development of an economy (Gherhes, et.
al., 2016).
Figure 7: Business by industries in SMEs of UK
The image detailed above is specifying the multiple industries the SMEs of UK are working in
which majorly involves retail, transportation, financial and insurance, health, social work, and
arts.
Impact of SME in Russia

Figure 8: Impact of SME in Russia
Russia comes under one of the EU countries. The graph detailed above is specifying the impact
small and medium enterprises are having on Russia. Through this graph, it can be interpreted that
the proportion of small and micro industries in Russia is low in comparison with the medium
industries.
Impact of SME in Germany
Figure 9: Impact of SME in Germany
Germany comes under one of the European countries and the impact of SME in Germany is
detailed in the above section which shows that the number of SME is increasing gradually with
the growing years. Initially, it was not that much but now it is kept on increasing (Azucar, et. al.,
2018).

Conclusion
After detailing all the relevant statistics and data related to the SME in the UK and other
countries it can be concluded that SME is playing a major role in the UK economy as it is
covering the majority of the business of UK. It is comprised of small and other micro industries
which are falling under the SME and these SME are having a strong impact on the overall
economy of the UK. There is also comparison being done among the small, medium and large
business enterprises of the UK on the basis of different levels like local, regional and national
level. After details about the overall study of the SME, it can be concluded that in terms of other
countries the growth of SME is growing with a much faster pace in the UK and it is also
delivering the innovative and quality products or services keeping in mind the requirements of
the customers.