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Introduction - Entrepreneurship and Small Business Management
In this report on “Entrepreneurship and Small Business Management”, various types of entrepreneurial ventures are discussed. The relation of these entrepreneurial ventures is shown with the topologies. The difference and similarity between different types of entrepreneurial ventures is also explained below in this report. The difference is shown on factors, such as roles, objective and characteristics. With the help of statically data considering regional, local, national and international economic impacts. Below in this report, reasons for making a business successful is being explained in detail. Traits and characteristics of a successful entrepreneur along with its personality was defined in this report. This report also carries the relation between risk and reward. Along with this, relation between past experience and person’s background is also shown in this report. Importance of small business and business start-ups on the economy of the country and is growth is measured deeply in the report.
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This report will provide a brief introduction to the entrepreneurship and entrepreneurial ventures and also tells about the typology of entrepreneurship. In addition to this, it also covers the differences between the types of entrepreneurial ventures. Furthermore, a discussion on the impact of micro and macro scale businesses on the economy is given. The report ends with the explanation of the importance of small business start-ups on the growth of social economy.
P1: Provide an introduction to the report by examining different types of entrepreneurial ventures and explaining how they relate to the typology (different types) of entrepreneurship.
Entrepreneurship is all about developing and creating a business in order to gain profits. The modern definition emphasise the transformation of the world by solving big problems. This can be related to developing a new product or service, initiating social changes, or presenting a major life-changing idea. As described by Ducker (2014), “entrepreneurship is the most innovative approach towards the business operations in order to manage, organise, and lead the workforce of an organisation. This is done to achieve the organisational goals.
Talking in terms of societal benefits, this can help in lowering the unemployment and poverty by creating jobs. Since it is all about building one’s life on pre-defined terms, it leads people in the direction set by them. The scope of the entrepreneurship is different in different countries. For example, in the developing countries like India, the poverty and unemployment rate is very high, therefore entrepreneurial activities can be an efficient way to deal with the situation. In addition to this, in the developed country, entrepreneurship can help in eradicating the socio-economic imbalance (Anderson, 2017).
Different researchers have given their own entrepreneurship typologies based on different criteria, such as need for achievement, security, power, recognition, attitude to growth, decision-making, etc. Various types of entrepreneurship have been defined in here:-
Large Corporations: These type of entrepreneurship aims at acquiring the growth and sustainability by synthesising new products and services. These have a certain life cycle and are subjected to large competition in the market. Their success depends on the innovation in the product.
Small Scale Business Entrepreneurship: These entrepreneurship usually operate in the local and regional market. The examples of this typology are supermarket, internet café, general stores, restaurants, etc. These are developed by a few members only (Storey, 2016).
Social Entrepreneurship: This type of entrepreneurship aims at developing the services and products that serve the society and benefit the people.
Scalable Business Start-ups: These ventures have the potential to change the entire business model dynamically. This type of entrepreneurship model emphasises more on quality and creativity.
P2: Explore the similarities and differences between each type of entrepreneurship venture.
The main objectives of this venture is to generate high ROI, profits and revenue.
These have acquired a competitive role. For this purpose, these venture focus on quality and sustainability.
These have a certain life cycle and are subjected to large competition in the market. Their success depends on the innovation in the product.
Scalable or Micro Entrepreneurship
Their main aim is to reach at the top of the market and acquire the largest section of the market share.
These type of entrepreneurship are directed by the persons who act as a leader. They analyse both internal and external strengths and weaknesses as well
(Anderson, 2017). These entrepreneurship have a strategic model to achieve the market shares.
These type of start-ups are controlled, supervised, and managed by the founders themselves. They aim at transforming the existing market and acquire a larger share in the market.
Small Business Entrepreneurship or micro level
To reap the maximum benefits out of the existing local and regional market (Storey, 2016).
These entrepreneurship help the workers in attaining the technical knowledge and experience. These entrepreneurial units are responsible for empowering the workforce.
These entrepreneurship usually operate in the local and regional market and are formed by fewer members. The production scale and the working space is small. The maximum number of employees is 5 to 10.
By developing the effective services and products, the society is being benefited (Parker, 2018).
Being a responsible venture, the key role is to provide benefits to people, the environment, and society.
These can be non-profitable and can help in serving the society and nature.
P3: Present, interpret and assess relevant data and statistic to illustrate the impact micro and small business have on the economy.
According to OECD, small and medium-sized enterprises provide nearly 60% employment in the global economy. As discussed in this report, different entrepreneurship ventures operate differently in developing and developed countries. These help the developing countries in generating wealth and jobs. In addition to this, some successful entrepreneurship models attract the overseas investments in the country. At a regional level, the small-scale models provide effective solutions to some crucial issues regarding the development. For instance, these SMEs can provide solutions regarding the access to clean water and energy and training as well (Storey, 2016).
In under-developed regions, the SMEs and entrepreneurial models can promote shared prosperity by unleashing the private sector-led growth. Small businesses play a significant role in attending the development challenges in the local communities as they are the driver of local growth. Small-scale businesses assist in capacity building of larger companies dealing in wide range of areas, such as ICT, green technology, market intelligence, etc.
In the context of the UK, more than 27 million people are working in the small enterprises. It is also important to note that the growth of the small-scale business is boosting. The number of small-scale businesses has outnumbered the large-scale firms in the UK. In addition to this, they are challenging the large scale industries by implementing smart, innovative, and creative strategies in the business model. As a result of which, the UK's 39.5% revenue comes from small-scale businesses.
P4: Explain the importance that small businesses and business start-ups on the growth of the social economy.
In the 1980s, the government of the UK recognized the potential of SMEs in reducing the social challenges, such as poverty, unemployment, and socio-economic gap. Recent research works have shown that the long-term prosperity and economic growth of the United Kingdom require the full participation from the SMEs. Government is opting for fostering the small-scale entrepreneurship as a suitable instrument to curb the economic crisis. With the rising percentage in the employment opportunities in the small businesses, the local, regional, and national development goals can be achieved. In simple words, the SMEs are the spine for economic development in the UK (Parker, 2018).
The net employment growth in the small-scale start-ups is 1.8%. Small businesses play a significant role in attending the development challenges in the local communities as they are the driver of local growth. Small businesses contribute to local economies by bringing innovation and growth to the local communities. These businesses trigger the economic growth and social growth as well. The help the newcomers to gain relevant field knowledge and experience, thereby increasing their chances of getting employment in the future. Larger businesses often work with small enterprises in order to complete their consignments through the process of outsourcing (Mukherjee, 2016).
SMEs are more stable in the times of economic crisis as their scale of operation is not large, thereby their losses are not as huge as that of large-scale enterprises. Therefore, these firms barely fire their employees in the time of recession. Small business does not always remain small as with time their scale of operation grows. They often headquartered at the community in which they started their businesses. This helps in the development of that region by providing jobs for the locals and stimulating the local economy.
M1: Investigate a diverse range of entrepreneurial ventures to demonstrate an understanding of entrepreneurship in both the public and private sector.
In the UK, both public and private sector is responsible for the development of entrepreneurial models. These fully grown models lead to the economic growth of the nation. To notice their effect, one should study the socio-economic development and achievements of the nation. In addition to this, the privatisation plays a vital role in strengthening the economic growth of the region and provide a large number of jobs (Mukherjee, 2016). Government and private sector together contribute to the development of entrepreneurial ventures by providing them technical and financial support
Talking about the developing countries, they require new and effective approaches to carry out and sustain economic growth and seize the potential opportunities from these flows. Private sector entrepreneurship ventures are critical to attaining this. Governments of nations, such as India, Bhutan, Sri Lanka, and Africa are encouraging and supporting entrepreneurial zeal in the country.
The country’s business environment is depending on the public and private sector performance and policies formulated by the government. World Bank’s Ease of Doing Business indicators set rules, examine the business environment and promote investment in the country. In developing countries, the private and public sector are developing the strategies based on the criteria given by the World Bank’s indicator and the results are quite ambiguous.
M2: Evaluate the differences that small, medium and large businesses make to the economy, applying relevant data and statistics.
Many experts have given their argument regarding supporting the entrepreneurship for the economic development. Supporting the most relevant type of business model can help in unlocking the potentials of national as well as local economies. Businesses have a different scale of operations. Small and microscale business models can easily adapt to change and explore innovative ideas. On the other hand, bigger firms seeking larger profits are positioning themselves to make large profits (Mukherjee, 2016).
There are certain facts related to the promotion of a particular scale of the business in the UK.
- Increasing the micro-entrepreneurial model of business and large-scale business can have a negative effect on the economic growth of the nation, especially in the developing country.
- Increasing the number of medium size businesses in the nation can have a positive impact on economic growth, especially in the developed country.
Based on this fact, government and private sector should promote the right mix of small, medium, and large scale businesses at the local, regional, and national level.
D1: Critically examine the scope, development, and growth of entrepreneurship ventures.
Entrepreneurship is the process of developing value through identification of business opportunity. It is just a management and the communicative task of mobilising the business funds and resources. As it is described that the SMEs have the potential to provide a larger scope for the development of the entrepreneurial models in the country. They have a vast scope in promoting services and selling them instead of producing them (Kirzner, 2015). Large-scale ventures and micro-scale are not very efficient and productive and they have a very low worker turnover.
The scope of entrepreneurial business models is into the industrial sector, service, and agricultural sector. Out of these three, the service sector has gained the maximum momentum. There are many challenges as well. For instance, the market is always fluctuating and the competition is ever-increasing. Therefore, to sustain their position and business growth, the entrepreneurs have to keep upgrading their operations. Another challenge is the lack of funds, especially for SMEs and Micro-scale businesses. The major challenge is the lack of experience and knowledge in the management team (Mukherjee, 2016).
D2: Critically examine how small businesses have an impact on different levels of the economy in a local, regional, national and international context.
In the UK, SMEs are the promoting factors for the job opportunities. Their role and contribution in the national, regional, and local economies are well understood. Being small scale, they have left a large impact on the UK's economy. There are more than 25 million SMEs in the UK that employ more than 60% of the working population of the UK. Factors like smart tax structure and policies can boost the small businesses. On the other hand, lack of funds and subsidies are the demotivating factors for SMEs in the UK. Two major factors were identified regarding the scale of businesses. First, increasing the micro-entrepreneurial model of business and large-scale business can have a negative effect on the economic growth of the nation, especially in the developing country. Second, increasing the number of medium size businesses in the nation can have a positive impact on economic growth, especially in the developed country.
In this report, a brief introduction to the entrepreneurship and entrepreneurial ventures was described. In addition to this, it also elaborated on the typology of entrepreneurship. In addition to this, it also covered the differences between the types of entrepreneurial ventures. Apart from this, a discussion on the impact of micro and macro scale businesses on the economy was also given. The report ended with the explanation of the importance of small business start-ups on the growth of the social economy.
This report describes the characteristics of a successful entrepreneur. It also assesses the entrepreneurial traits of persons. In addition to this, it also examines how experience and background factors can affect the entrepreneurship.
P5: Determine what makes a successful entrepreneur.
The success of an entrepreneur is a multidimensional concept comprising micro and macro factors. There are various ways of measuring the entrepreneurial success, such as venture growth, venture profitability, etc. Another important factor is entrepreneurial competency which is referred to as components depending upon the person's background and those attained from experiences (Kirzner, 2015). There are no true factors or characteristics that can guarantee success in the market. Entrepreneurial traits rarely have any effects on the person's behavior in isolation. Certain key traits are explained in here
- Venture Innovation: This is useful in achieving the competitive advantage. Innovation has a causal relationship with profitability and growth.
- Opportunity Recognition: Without determining and grabbing an opportunity, no business can achieve success. All this depends on the entrepreneur's ability to recognize opportunities.
- Self-efficacy: It is defined as the abilities to recognise own capabilities to perform a complicated task. This helps the entrepreneurs in pursuing opportunities.
- Learning Orientation: It is defined as the development of knowledge and the ability to utilise it in carrying out entrepreneurial activities. The basic key to learning orientation is to undertake both passive and active information.
- Tolerance: The need for success can sometimes make the entrepreneurs to take on some amount of risk to achieve the outcomes. There is a direct link between the need for achievement and tolerance of risk.
P6: Assess aspects of the entrepreneur personality reflect entrepreneurial motivation and mindset.
Motivation is the essential factor of the business manager for the development and growth of the business organization. With the help of motivation, employees are motivated towards their work with more dedication and energy. Motivation can be given in monetary and non-monetary benefits as per requirement and demands of employees. It is a positive component that each and every business entrepreneur must have developed. A successful business entrepreneur has followed the principle and ethics of a different person. It is the responsibility of entrepreneur to do their task in a very ethical manner so popularity can be managed. There is a large number of a famous business entrepreneur like Steve Jobs, Mark Zuckerberg, Bill gates these are most successful managers of the business.
Along with that, there is a number of factors are considered which reflects the motivation power of business entrepreneur. For example, upbringing is the element where any person can be bought by the customs and the person can also get high quality from this upbringing in the family. The lifestyle is based on living standard and communication skill of person, for example, Steve jobs have the very attractive communication skill so he motivates the employees of own organization for increasing the productivity and profitability (Mukherjee, 2016). A motivated employee works very fast with concentrates on work with dedication and mindset. Employees are influenced by the speech of Steve jobs and they are motivated towards the work. The next example is Mark Zuckerberg, who is the CEO of facebook and he is the youngest one in a successful business entrepreneur. After looking at all the personalities above mentioned that, every individual is motivated and takes some new steps in their working culture and performance.
Certain factors are considered of the motivation are as follows:
Salary: Receiving actual salary is the motivating factor to influence the payment and timely appreciation in their pay scale.
Non-monetary incentives: Some non-financial incentives are offered to satisfy the needs of self-respect and employees ego and actualization requirements. (Mukherjee, 2016).
- Enhance morale
- Develop a positive environment for work
- Motivating high performance
- Considering achievement
Relationship with leadership: employee feels a hierarchy of requirements that must be addressed and understanding the responsibility that made a good relationship with their line manager and other members.
Organization culture: Employees are focused towards the culture and align the aims and objectives of professional (Navale, 2013).
P7: Examine, using relevant examples, how a person’s background and past experiences can hinder or foster entrepreneurship.
There are various factors which help to get understanding of the background and past experience of entrepreneurship. It involves cultural factor, national culture, economic factors and character traits.
Economic factors: It includes policies of the government and other regulatory authorities which are applicable to citizens and corporate organization, tax rates, interest rates, currency rates etc. These all factors are based on purchasing power of every person that how much is expanded on buying the products and services. If any changes are incurred in the government policy then, buying power is hampered or it reduces the position of the entrepreneur
National culture: Entrepreneurs are based on culture and when culture is very helpful and supportive then, in that case, entrepreneurs can easily develop their business. There are certain factors that depend on individualism, collectivism and other factors which affect the entrepreneurs and its makes an impact on decision making power (Parker, 2018).
Educational factor: Education is a mandatory factor to being a successful business entrepreneur. For example, if the entrepreneur is highly educated then he follows the business mind, executes the advanced innovative business ideas, tools, methods, and systems are applicable to business. To maintain stability in the highly competitive market then entrepreneurs must be educated.
Character traits: To be the most successful entrepreneurs, they must follow the various qualities. For example, he should be very confident in their functions and operations, motivated. He should have effective communication skill so good relationship is built with every employee of organisation and balances the level of loyalty and trust (Parker, 2018).
There are various risk involved in the business organisation, if an entrepreneur develops business then he has to evaluate all factors and execute the plans and policies so that chances issues and problems are reduced in future. Rewards should also provide to staff and employees in monetary and non-monetary benefits as per the performance level and aims and objectives of the business organization. When employees perform effectively then rewards and compensation are received by then so it increases the level of motivation.
M3. Examine different lines of arguments.
A successful business entrepreneur is a person who manages and runs the business of worn instead of performing a job at any other place. To be a successful business entrepreneur there must be a requirement to follow the various qualities and character traits and adopt it on regular basis in the operations and functions of organization. Certain basic qualities must be developed in entrepreneur like self-motivation, confidence, self-control, be calm and polite, good behavior with every business employees etc. The entrepreneur should be highly competitive which considers the market evaluation and adopts the best decision for developing the business and preparing goods and services (Hechavarria, et. al., 2012).
The entrepreneur has certain features and qualities such as he must possess the sound communication skill. When there are issues faced in communication skill then it will create issues in managing the organization relationship. He should be very innovative to create new business ideas and implement them in the business process to achieve the desired outcomes. When new innovations are
M4. Analyze the link between features of the entrepreneurs and successful entrepreneurs.
There are various entrepreneurs in the country who develops their business with innovative ideas and traits but every new entrepreneur does not become more successful in this competitive world. An effective and successful entrepreneur must involve certain unique qualities to work within the business organization and it functions
Effective planning: Planning is developed about the resource utilization in a proper manner, management of time, use the money in particular resources etc into functions and operations of the organization. A successful business entrepreneur has a good business plan and they are prepared to face the overcoming challenges.
Management of money: Money is the important resource and it is proper utilization is depends on entrepreneur as particular business function and activities. The complete knowledge and understanding are necessary about the use of money and its investment (Bridge and O'Neill, 2012).
Take a risk: Business entrepreneur are also called as risk takers, to analyze the future uncertainties may happen, a businessman is willing to consider the risk with respect to time and money as per the aims and objectives.
Passion and motivation: It is the necessary element for a highly successful entrepreneur, an employer who provides motivation to employees and self-motivated as well as passion towards achieving the goals are necessary (Navale, 2013).
D3. Analyzing the characteristics traits and skills and motivational drivers of successful entrepreneurs
There is a number of features, traits and skills and other motivational factors for a successful business entrepreneur are here mentioned:
Open minded and flexibility: It is the necessary component for a successful entrepreneur who must be broad-minded with new ideas and Skills to accept problems and challenges in each and every circumstance whether negative or positive. There is a requirement of vision to achieve the aims and goals of the organization and organizational nature as well as individual nature must very comfortable to accept the new modifications of the market and culture of the environment (Barba-Sánchez and Atienza-Sahuquillo, 2012).
Motivation: The drivers of motivation depend on the needs and requirements of employees and other staff members of the company. A motivated person is productive and effective for the development and growth of the organization as compared to the employee. The productivity enhances the profit and sales for the organization.
D4. Evaluate the entrepreneurs positively and negatively
The qualities of the successful entrepreneur should be implemented accurately and if they are not executed in the perfect manner then it will develop some negative effect also to the image and reputation of the organization. For example, Bill Gates are the most famous person who is well known in the world but he gains the growth and success with hard work. He faces various struggles in life and cheated by his business partner, but he did not look back and faces issues on continuums manner in life in coming growth and success (Northouse, 2017). At present after all situations, he is the richest person in the world and owner of Microsoft Company. For example Steve jobs, who is most famous for new innovations and creations. He also struggled in life after many problems at present he is the Owner of Apple having potential and unique abilities to develop and growth of the organisation.
In this report, the characteristics of a successful entrepreneur were described. It also assessed the entrepreneurial traits of persons. In addition to this, it also examined how experience and background factors can affect the entrepreneurship.
This is being concluded from the report about various types of entrepreneurial ventures. The relation of these entrepreneurial ventures was shown with the topologies. The difference and similarity between different types of entrepreneurial ventures were also explained below in this report. The difference was shown between factors, such as roles, objective and characteristics. With the help of statically data considering regional, local, national and international economic impacts. Below in this report, reasons for making a business successful is being explained in detail. Traits and characteristics of a successful entrepreneur along with its personality were defined in this report. This report also carries the relation between risk and reward. Along with this, the relation between past experience and a person's background was also shown in this report. Importance of small business and business start-ups on the economy of the country and is growth was measured deeply in the report.
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