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Entrepreneurship and Small Business Management

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Introduction

As per Brennan&McGowan (2016), entrepreneurship is highly significant in today’s modern

world due to the economic development. The key objectives of industrial development, regional

growth and generation of employment depend on the entrepreneurial development.

Brennan&McGowan (2016) suggest that entrepreneurs are important for the industrial

development, which ultimately, lead to greater employment opportunities to unemployed youth,

increase in income, high standard of living, and revenue to the government in the form of tax.

This report aims at analyzing the importance of entrepreneurship activity. Also, the report aims

at exploring different business ventures available for entrepreneurs, assess the effect of small

businesses on economy and entrepreneurial mindset.

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Part 1

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. Your introduction should aim to define entrepreneurship and explore

entrepreneurship scope and typology

As per Gupta et al. (2013), entrepreneurship is considered a dynamic activity which helps the

business people to bring many changes in different processes happening in the organisation. It

includes process of production, innovation, and new techniques to use the material. Gupta et al.

(2013) define entrepreneurship as the mental attitude to determine the risk and uncertainty

involved in the market and achieves specific targets by doing something new. Entrepreneurship

holds high scope in modern world. As per Kirzner, (2015), the concept of entrepreneurship is a

traditional phenomenon which is associated with the vision of an entrepreneur as well as its

implementation. It is a creative and innovative response to the environment and also a skill to

develop the economy in a positive way. There are different types of entrepreneurial ventures.

Small Business Entrepreneurship: According to Kirzner, (2015), there is significant number of

businessmen and startups in the UK that are small businesses. The small businesses usually make

around 99.7% of the companies that hire 50% of the non-governmental workers. The small

businesses include grocery stores, travel agents, internet stores, consultants etc. A small

entrepreneur is anyone who runs his business by hiring local employees or family members. The

key purpose of small businesses is to feed their family and make profits in spite of taking over an

industry.
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Scalable Startup Entrepreneurship: These entrepreneurs are those who have a belief that their

vision could change the world. They hire the best and attract investment from different financial

investors. Their key focus on scale requires high venture capital for rapid expansion.

Large companies: These companies have fixed life cycles. Large companies grow through

innovation, developing new products that are variants to their existing products. The factors such

as changes in the consumer preferences, advanced technologies, new competitors and legislation

put pressure on the large entrepreneurs for innovation. Big entrepreneurs usually adopt various

strategies to acquire the market and compete in the industry.

Social entrepreneurship: The social entrepreneurs focus on developing products and services

for the betterment of the people. The key goal of the social entrepreneurship is to make the world

a better place and not focus on market share.

These entrepreneurship ventures are run by different types of entrepreneurs. These are given in

the figure below.

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Fig 1

Source: Kirzner, 2015

Skeptical entrepreneur- This type of entrepreneur sees other’s success and start questioning. As

per these entrepreneurs, the reasons for successful businessmen are either due to lucky breaks or

inheritance.
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P2: Building on the different types of entrepreneurial ventures explored in P1, you are now

required to explore the similarities and differences between each. You could consider the

roles, characteristics and objectives of different types of ventures: private; public; social

enterprises - as well as different sized ventures: micro; small; medium.

The similarities and dissimilarities of different types of entrepreneurship ventures are given

below.

Type of ventures Roles Characteristics Objectives

Business The vision of a A business The key objective is

Entrepreneurship business entrepreneur entrepreneur delivers to achieve financial

is money oriented. value to their success i.e. generate

customers through high profit.

competitive pricing

and better products.

Social The vision of a social A social entrepreneur The key objective is

Entrepreneurship entrepreneur is delivers value creation to strike a balance

passion oriented. by focusing on social between dual mottos

value creation through of social impact and

positive influence on sustainable profits.

targeted communities.

Depending on the size of the entrepreneurship venture, these are categorized as micro and macro

ventures.

Type of ventures Roles Characteristics Objectives

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Micro ventures These ventures are The key role of small The objective of a

run by small business business entrepreneur small entrepreneur is

owners that have less is to develop a strong to feed the family and

than five employees and efficient generate profit.

and have startup cost workplace. In such an

of less than $35000 environment,

and annual revenue of employees understand

less than $10000 their role and

(Kirby, 2016). communicate with

each other to achieve

objectives.

Macro ventures These ventures are The role of a macro The objective of a

run by large business entrepreneur is to large entrepreneur is

owners that consider determine the to compete actively in

their enterprise as the strengths and the industry.

way to change the weaknesses of the

industry and become businesses to compete

dominant in the in the market.

market.
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P3: Present, interpret and assess relevant data and statistic to illustrate the impact micro

and small business have on the economy. You should consider local, regional, national and

international economic impacts.

According to Kirby (2016), UK is thriving on the SMEs and there is high record of start-up

businesses in 2013 and 2014. The economic climate in the UK is highly favorable for the start-up

success and the country needs high number of small businesses to sustain a healthy economy. As

per Kirby (2016), micro and small businesses are integral part of the country’s economy. There

are plenty of reasons for the success of SMEs in the UK’s economy, including turnover, growth

and industry. According to (), small and medium sized businesses had a total turnover of £1.6

trillion in 2014. The turnover of the small businesses in the UK amounts to a whopping 47% of

the private sector’s overall turnover. The majority of the small businesses works independently

and makes a disproportionately large contribution to the job creation in the UK. It present, they

employ more than 24 million men and women in the United Kingdom. This account for nearly

60 percent of the total private-sector employment in the country and 81 percent of the total

workforce in the UK. As far as the business growth is concerned, small and medium enterprises

in the country win over their bigger or larger counterparts. A large part of this growth of SMEs is

innovation. This is because innovation has been keeping markets fresh, stopping enterprises from

becoming inactive or passive, and allowing active businesses rise above unproductive firms. As

per Miller, (2013), a colossal 37 percent of small and medium businesses in the UK indulge in

innovative activity. This clearly suggests that small enterprises in the United Kingdom are

among the major drivers of competition, innovation as well as growth in the country. Between

the years 2009 and 2013, UK saw a massive 47 percent shoot up in the number of number of

small enterprises births. This helped the country in economic recovery following the recession in
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2008 (Miller, 2013). SMEs have played a major role in bringing or lifting the United Kingdom

out of recession.

Manufacturing, retail and the repair/fixing up of motor vehicles are among the largest industries

in the United Kingdom. These three major economic activities in the country are mostly

controlled by small businesses. A colossal 46 percent of the total SME revenue is generated from

small enterprises in one of these three industries. As per Miller (2013), 3 out of UK’s every 20

small enterprises operate in one of these three sectors. This clearly shows how important small

businesses are to the overall economy of the UK.

According to Miller (2013), the small and medium scale companies in the United Kingdom have

a symbiotic or mutually beneficial relationship with the nation’s economy. The contributions of

SMEs are important to the economic health and the country’s present financial and economic

climates are an perfect facilitators for growth of small businesses and start-ups.

P4: Building on the information you provided for P3, you must explain the importance that

small businesses and business start-ups on the growth of the social economy.

In the United Kingdom, small businesses and business start-ups play a significant role in a

country’s economic system. Small businesses in the UK are an economic engine and employ

local citizens. This leads to movement of cash through the country’s economy. Successful small

businesses in the UK have been generating great opportunities for other enterprises and the

society as a whole (Olaosebikan, 2016). As pointed out in P3, small and medium enterprises are

the backbone of the economy of the United Kingdom. They have been opening new markets,

driving economic growth and creating new jobs. Hence, the contribution of small businesses and
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business start-ups to the growth of the social economy of the UK is vital. They have been

contributing incredibly to the pro-poor economic growth in the UK by the means of Job creation

as well as income generation, Diversification of income, Increasing income as well as economic

activities of women in the country, and Acting as a seedbed for improvement and modernisation.

In the United Kingdom, small and medium businesses integrate economic as well as moral

values and operate in a socially acceptable manner. The owners of small businesses in the

country form the backbone of the society or the local communities. This is because a majority of

local people work in small businesses and live near small businesses. In addition, small

businesses take part in community activities and lend their support to charities, cooperatives,

associations and mutuals. Small businesses also share community concerns or worries on issues

like crime, environment, etc. A majority of small businesses in the UK provides people with the

opportunity to earn well and rise above the poverty level. Also, as per the data analysed in P3,

small and medium businesses in UK have been contributing to the growth of social economy of

the country by bringing growth as well as innovation to various communities of people..

Moreover, small businesses are the most effective as well as efficient training ground for

unskilled workers and young people.

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Part 2

P5: Determine what makes a successful entrepreneur. You could consider examples of

successful entrepreneurs and determine the characteristic traits and skills they possess.

Similarly, you could explore whether entrepreneurs are born or made and whether

entrepreneurship skills can be learned over time.

An entrepreneur is usually defined as a person who undertakes new initiatives or implements

business ideas that are creative as well as innovative. However, being a successful and effective

entrepreneur means more than setting up new ventures or startups every other day (Olaosebikan,

2016). A successful entrepreneur is the one who has the right attitude pr approach towards

implementation of an idea by doing business, and has the grit as well as determination to achieve

success and growth. A successful entrepreneur has a very strong and vivid inner drive that helps

his/her to become even better and more successful.

Hilary Devey CBE, Founder of Pall-Ex and a key speaker at The Business Show 2017, pointed

out how various factors contribute to the success of any entrepreneur. Ms. Devey, in her seminar,

said that successful entrepreneurs usually share a set of characteristics and risk taking is the most

easily identifiable entrepreneurial characteristic among them. Some of the general characteristics

or qualities of successful entrepreneurs include tolerance of risk, determination, commitment,

adaptability, opportunity obsession, creativity and leadership. As per another keynote speaker at

The Business Show 2017, entrepreneurs can be characterised by preference for innovation, need

for achievement and risk taking propensity (Stevenson&Jarillo, 2017). The traits that are most

commonly associated with success and growth of entrepreneurs include Innovation, Persistence,

Positive Attitude, Self-Confidence, Need for independence and Problem Solving. A successful
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entrepreneur always keeps looking for new ideas as well as innovations in order to come out as a

winner. They keep reinventing themselves constantly and keep thinking of better ways of

running an enterprise and improvising on the various services as well as products that they offer.

In addition to this, another important characteristic of a good entrepreneur is openness and

commitment to adopting changes. Change is something that is constant in any business and

nobody can make continuing profits using old techniques and methods. For a successful

entrepreneur, the right way of doing business is where continuous evolution takes place. It can be

evolution of products, services, ideas or technology. Bill Gates, one of the most famous as well

as successful entrepreneurs of our era who is also the richest man in the world, likes to learn

while growing, cares for people, is determined and committed, and is not scared of losing.

Similarly, Walt Disney, another very popular entrepreneur, had commitment and an unrelenting

spirit to his vision (Stevenson&Jarillo, 2017).

Are entrepreneurs born or made is an age-old question that has often been debated. Many

academics have presented strong point of views of this matter. In the recent times, the question

has taken on great urgency. A commonly held view is that entrepreneurs are born. Many

researchers have stated that what makes an individual to become a good entrepreneur has a lot to

do with their innate qualities as well as personality. Anything that is learned through formal

education does not play a major role here. However, some researchers have stated that talent of a

majority of entrepreneurs lies in their proficiency to align their passion and skills with coming up

opportunities and thereafter, to further enhance the attributes and skills they require for making

the most of those opportunities. No doubt, experience and hard work is the key to an individual
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becoming a successful entrepreneur. Hence, entrepreneurial attributes as well as skills can be

taught or learned. So, successful entrepreneurs can be both made and born.

P6: Assess how aspects of the entrepreneurial personality reflect entrepreneurial

motivation and mindset. You may wish to consider how personality is shaped by family

upbringing, lifestyle, cultural differences and personal motivation and drivers amongst

other factors.

According to Shane&Venkataraman (2014), an entrepreneur is a person who has the ability to

carry out innovations, which could be in the form of a new product or service, a new method or

technique of production, a new source of raw material, a new organisational principle or a new

market. He or she is a dynamic person with the will to change and get better with time. Many

research studies on entrepreneurships and leadership models have guided hypotheses regarding

the connection between entrepreneurial skills and traits (tenacity, passion, etc.) and

entrepreneurial motivation (self-efficacy, communicated vision and goals) to further business

growth. The significant role of entrepreneurs and their input for the translation of organisation as

well as technological innovation into more efficient services and products is well-known.

According to Shane&Venkataraman (2014), realisation and proper execution of innovative ideas

is not only vitally important for successful entrepreneurs, but is also a rare potential or skill.

Research studies have indicated that ideas are cheap which means anybody can come forward

with a good idea but there are only certain people who have the skills, capacity and capability to

realise or execute an idea. Such an individual can be described as a man or woman of action who

does not get affected by the restrictions that hinder the action of other economic actors. Hence,

there is something very special with the personality of an entrepreneur. As per ( ), there are

certain personality traits which are supposed to be directly related to the motives and intentions
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of entrepreneurs. Both personality traits as well as motivational structures are of great

significance in order to understand the entrepreneurial mindset. According to ( ), five general

traits appropriately define personality. Big Five Model has been used here to define personality

through the five traits, namely, Surgency or Extraversion (Assertive, Talkative and Energetic);

Agreeableness (Cooperative, Good-Natured and Trustful); Conscientiousness (Responsible,

Orderly and Dependable); Openness to Experience (Imaginative, Intellectual and Independent-

minded); and Emotional Stability Vs. Neuroticism (not neurotic, calm, not easily upset).

P7: Examine, using relevant examples, how a person’s background and past experiences

can hinder or foster entrepreneurship. Factors to consider may include level and type of

education, national culture, economic circumstances and character traits. The risks and

rewards of starting a business should also be considered.

By establishing companies, entrepreneurs create job opportunities for people. Entrepreneurs also

translate identified needs as well as problems into high-value services and products. A person’s

past experiences and education can hinder or foster entrepreneurship. Many research studies

have indicated that the way businessmen or entrepreneurs perceive as well as make sense of

various entrepreneurial opportunities or options is guided by their education and past

experiences. As per Olaosebikan, (2016), past experiences of an individual do not only affect the

process of finding out new opportunities but all the common traits and qualities of

entrepreneurship, namely, coordination, uncertainty and attitude toward new options or

opportunities. Past experiences and education have significant bearing upon present attitudes as

well as values. According to Olaosebikan, (2016), human behaviour and decision-making is

shaped by learning and past experiences. Past experiences are known to have a direct impact on
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the leadership style of people. Prior events and incidents shape leadership style. For example,

many research studies have indicated that people who have had negative experience with their

past managers or leaders know the importance of leadership and behave in a more

entrepreneurial way. Past success influences or affects self-efficacy in a positive way but as it

makes entrepreneurs more vulnerable to small losses or failures, it leads to decrease in self-

efficacy to a certain extent (Stevenson&Jarillo, 2015). Persistent failures or defeats decrease self-

efficacy in the same way. Hence, positive experiences of people positively influence behaviour

and attitude through self-efficacy. On the other hand, negative past experiences have inverse

influence or effect.

A person’s background including education, national culture, economic circumstance can hinder

or foster entrepreneurship. It is important for any country to foster entrepreneurship to control

economic crises and lower down the employment rates (Stevenson&Jarillo, 2015). For example,

Europe has been fostering entrepreneurship in a sustainable way by introducing education

models that focus on problem-solving and risk-taking, promoting innovative approaches to

provide finance such as providing access to crowdfunding, profit from innovation, tax incentives

for new ventures, etc. Hence, Europe supports young entrepreneurs in many ways. The national

culture to which an individual belongs can make a difference, as long as his or her country

creates a fertile climate and atmosphere for entrepreneurs no matter what their age is, which

industry they wish to operate in, and where they are. Hence, entrepreneurship is fostered by

national culture and economic environment if the policy of a country is right and contributes to a

better and richer understanding of entrepreneurship. Unfortunately, in many developing countries

or economies, such as Kenya, obstacles of various hindrances in the business environment put an
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end to entrepreneurial opportunities to their people. For example, in Lebanon, small as well as

medium-sized enterprises are bound to pay a bribe for carrying out government procedures. In

Tunisia, street vendors cannot get legal status and often get harassed by local officials.

Challenges or hindrances like these add to the usual hurdles that entrepreneurs have to cross with

regard to financing, capacity and market access. Apart from this, the national culture of an

individual greatly contributes to the development of his or her values as well as beliefs. One’s

personality traits are influenced by his/her national culture.

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Conclusion
It can be concluded from the findings that entrepreneurship plays a great role in the

contemporary world. This is because it significantly contributes to economic development.

Entrepreneurial development directly leads to the growth of the region where the enterprise is

established, industrial development and employment generation. The findings indicate that

successful entrepreneurs are important for industrial development which ultimately results in

economic development. It has also been found out that small and medium enterprises are of vital

importance to the development of economy as well as social economy as they create jobs, help

unskilled workers enhance their capabilities.

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