Contents

INTRODUCTION ..................................................................................... 2

THE REPORT ........................................................................................... 3

Task 1 (LO1)........................................................................................... 3

1.0 The concept of entrepreneurship ................................................... 3

Task 2 (LO2)......................................................................................... 10

2.0 The impact of small business to the economy ............................. 10

CONCLUSION ....................................................................................... 14

References ............................................................................................... 15

1
INTRODUCTION
In recent years, entrepreneurship is the business topic that is most concerned about. Never in
Vietnam, entrepreneurship booming like now. A series of programs, creative entrepreneurship
movements of young people, students, Vietnamese enterprises are interested and poured by foreign
investors (Chuong, 2017). Vietnam has a new, young, vibrant generation of entrepreneurship that
determined to realize their passions with business beliefs. Not only young people but also many
people are not young are excited about the trend of starting a business (Thanh, 2017). Big Pharma
was formed from the idea and passion of a Vietnamese businessman - Mr. Thao. He created the
company and started a business 10 years ago. It is to supply medical equipment and medical
consumables, and at a later stage pharmaceutical in Vietnam. With a small scale, most of them
work to cover family income, pay employees' salaries and earn low interest rates. Therefore, in the
first years of starting a business, in the second year, he obtained interest, but the company's revenue
was not large. The company continues to focus on having more customers and developing their
products and services with the motto "Quality at an affordable price". The company hopes that
these products will be provided to most people, both the poor and the rich and the maximum
number of people who can benefit from advances in medical science.

This report is written with aim that create an understanding of entrepreneurship and small business
management. The report represents an opportunity to analyze different areas of the problem
learned. The report must be presented as a Management Report to Big Pharma addressing all the
tasks under the Assessment Criteria. It discusses understanding a range of entrepreneurial ventures
and of how small businesses influence on the economy of the country.

In the upcoming section of the report, the following will be provided the examination of different
types of entrepreneurial ventures and explanation of how they relate to the typology of
entrepreneurship, exploring the similarities and differences among entrepreneurial ventures,
illustration on how micro and small businesses impact on the economy and explanation of how
important small businesses and business start-ups to the growth of the social economy.

2
THE REPORT
Task 1 (LO1)
1.0 The concept of entrepreneurship
1.1 Definition

Entrepreneur

Entrepreneur is one who organizes, manages and assumes the risks of a business or enterprise
(Nelson, 2012). The entrepreneur is usually a sole proprietor, a partner, or the one who owns the
majority of shares in an incorporated venture. An entrepreneur takes an idea, develops a business
around it, manages the business, and assumes the risk for its success (Duermyer, 2018). The
concept of entrepreneur is associated with three elements riskbearing, organizing and innovating

Entrepreneurship

Entrepreneurship is both the study of how new businesses are created as well as the actual process
of starting a new business. Entrepreneurship is the process of creating something new of value by
devoting the necessary time and effort, by accepting and acknowledging the necessary financial,
psychological, and social risks and finally receiving the resulting rewards be it monetary and
personal satisfaction and freedom to do what you want (Fernandes, 2018). The most obvious
example of entrepreneurship is the starting of a new business. Entrepreneurship is running a
business of one’s own, is the phenomenon associated with entrepreneurial activity. (Ferreira, 2018)

Entrepreneurial ventures

Entrepreneurial venture can be defined as an organization that places innovation and opportunism
at its heart in order to produce economic or social value (Iriobe, 2016).

3
1.2 Types of entrepreneurial ventures

Small business

Small business is a privately owned and independently operated business which can only be run
by the owners and typically has a small number of employees (Beal, 2018). They vary a great deal
in terms of size, revenues and regulatory authorization, both within a country and from country to
country (Wiley, 2016). Small businesses can generate payroll taxes and jobs, but are not large
employers. They provide products and services that are necessary parts of a city’s infrastructure,
as well as leisure goods and retail. Depending on each industry, a small business generally consist
of 250 employees at the most or 1500 employees at the most (Totka, 2018). The criteria used to
identify a small business are:

- Manufacturing: Maximum number of employees may range from 500 to 1500.

- Wholesaling: Maximum number of employees may range from 100 to 500.
- Retailing: For one-third of all retail sub-industries, size standards are set at $7.5 million in
average annual receipts. Other industries are defined by 100 to 500 employee maximums.
(McIntyre, 2018)
- Micro businesses: Employing fewer than 10 people and an annual turnover or a total balance
sheet which does not surpass $2 million.
- Small and Medium enterprises (SMEs): Small-size enterprises as companies with less than
50 employees and annual revenues of $10 million or less and medium-sized company as a
business that has less than 250 employees and annual revenues of $50 million or less.

Big Pharma currently has 12 employees, as known as a small business. With a small scale, most
of them work to cover family income, pay employees' salaries and earn low interest rates.

4
Social enterprise

Social enterprises built on innovative solutions and a desire to make the world a better place
(Kenton, 2018). Their main objective is to have a social, societal or environmental impact for the
general interest (Tapner, 2017). Social enterprises develop products and services for the betterment
and progress of the people and societal systems. It has the potential to create significant social
impact and improve lives (Jumpstart, 2016). It may be social economy or non-profit organizations.

Baron Fig - inventive group from New York, USA that produces high quality notebooks that
address the needs and expectations of everyday creative professionals and hobbyists. Aware of the
impact paper production has on trees, they are committed to planting a tree for every notebook
sold. Promoting environmental consciousness, responsibility and overcoming their impact. Up
until 2016, they have already planted 52,866 trees in more than 30 countries. (Gomez, 2016)

Large Business

Large companies are a significant employer in the community. Large companies have finite life
cycle and they focus on providing new products or services to the customers for sustainability and
longevity of the business (Krogdahl, 2017). They are always subjected to competition, hence it is
important for them to provide products and services accordingly with the changing business
environment and trend. They tend to be major brands with an established reputation and
community presence.

Apple Inc. is an American multinational corporation that designs and manufactures consumer
electronics and computer software products (Mirabal, 2009). The company operates more than 250
retail stores in nine countries and an online store where hardware and software products are sold.
Apple has always shown themselves to be a creative genius and boundless imagination. Their
products are always highly innovative and always bring newness to users. They always improve
the customer experience for their products (Kinh, 2017). Understanding and satisfying customers
are the factors that lead to Apple's success.

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High growth company

Companies generating a return on equity of greater than 15% are generally classified as high
growth companies (Farlex, 2017). According to David Birch, a high-growth business was defined
as one that grows turnover by at least 20% annually for four years or more, starting from a base of
at least $1 million (Casnocha, 2011). High growth companies have the potential to create
significant revenue, jobs and economic impact by maximizing the right opportunities for growth.
High growth companies include two types of firm:

- Scalable start-up: Scalable start-up businesses (innovation-led or high growth tech

companies) are young and innovation-focused firms with the potential to create a new market
or dramatically change an existing market via proprietary, technology-based products or
services (Blank, 2010). Startups have the potential to create significant revenue, jobs and
economic impact.
- Second-stage: Second-stage companies (Gazelles) are independently owned and operated
for-profit enterprise that has the potential to become dominant in its field (Freed, 2014).
Second-stage companies are those that have grown past the startup stage but have not yet
grown to maturity. A business typically begins to enter its second stage when it approaches
$1 million in total receipts. Employee numbers and revenue ranges vary by industry, but the
population of firms with 10 to 100 employees and $750,000 to $50 million in receipts
includes the vast majority of second-stage companies. (Elorde, 2016)

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 1.3 The similarities and differences among entrepreneurial ventures

The differences

Small business Social enterprise Large business High growth company

Employee - Manufacturing: from Depending on the There are at least 500 Depending on
number 500 to 1500 employees. size of the business. people. structure and size of
- Wholesaling: from organization.
100 to 500 employees.
- Retails: depending on
structure of company.
- Micro businesses:
fewer than 10 people.
- SMEs:
Small-size enterprise:
less than 50 employees.
Medium-sized
company: less than 250
employees.
Goals and Growing into a long- Maximizing impact Maintaining the These business aims to
objectives term business that is in a sustainable market by developing provide innovative
profitable and way. Creating new products or products constantly
sustainable, with quality products services and marketing and achieve high
possibility of eventual and services that strategies. Generating profitability for
sale to an employee or solve social needs substantial revenue investors.
hand over to a family and problems, and profit for the
member. making the world a company and its
better place. shareholders.

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Kind of Restaurants, retail A company Corporations. A company producing
business stores, construction working to solve medical devices or
firms, agriculture. global health developing life-saving
issues; a company medicine; IT
solving specific companies developing
problems in B2B software or apps;
developing clean tech-geared
countries; firms.
nonprofits with a
philanthropic
mission.
Capital Micro-loans, bank Depending on the Revenue, tax credits, Risk capital, non-
providers loans, revenue, friends, type and size of subsidiaries. dilutive capital,
family and personal company; can run friends, family and
funds. the entire capital personal funds.
continuum.
Structure No proper Mainly trustee The organizational Mainly corporations or
organizational structure based structure is often limited partnerships.
and often run with sole organizations. complex and can be
proprietorship in public limited or
partnership. private limited
company.
Risks The risks might be The risks are not The risks are medium The risks are high due
lower but competition is much high because, because large to high amount of
high with same sized these businesses businesses often financial investment
organizations. often get support manage to sell high and pressure to return
from government volume due to their high amount to the
and public due to brand value. investors by achieving
their vision. high sales volume.

8
The similarities

- All entrepreneurial ventures had an idea which led them to make profit.
- They all make profit.
- The entrepreneurs have a new idea who they develop.
- Discovery, evaluation, and exploitation of opportunities.
- Initiation of new products, services and business.
- Impact on the economy positive and negative at different levels.

Entrepreneurial activity

Entrepreneurial activity is the enterprising human action in pursuit of the generation of value,
through the creation or expansion of economic activity, by identifying and exploiting new
products, processes or markets.

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Task 2 (LO2)
2.0 The impact of small business to the economy
Small business growth is important to the economy

A small business is the only type that can survive while serving a reduced population in some
towns and villages. In a big city, small businesses often offer a more diverse inventory or specialize
in providing unique or personalized customer experiences. Therefore, small businesses contribute
to growth and vitality in specific areas of economic and socioeconomic development by creating
jobs, sparking innovation, providing opportunities for many people, including women and
minorities to achieve financial success and independence. In addition, they complement the
economic activity of large organizations by providing them with components, services, and
distribution of their products.

 Creating jobs

Although small businesses often use less than five hundred people, it helps create more job
opportunities. Small businesses help stimulate economic growth by providing employment
opportunities to people who may not be employable by larger corporations. Whіle multinational
corporates focus оn recruiting commendable educated people, small enterprises hire people even
wіth most unimpressive resumes along wіth providing training аnd development (Wright, 2016).
Small businesses create job opportunities and drive economic growth in smaller geographic areas.
Therefore, small businesses keep local economies strong.

 Innovation

According to the SBA, small companies develop more patents per employee than do larger
companies. Small businesses tend to attract talent who invent new products or implement new
solutions for existing ideas (Brown, 2018). Small businesses are very innovative because they tend
to offer environments that appeal to individuals with the talent to invent new products or improve
the way things are done. Fast decision making is encouraged, their research programs tend to be
focused, and their compensation structures typically reward top performers. (Gruyaert, 2017)

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  Helping large businesses

Small firms supply many of the components needed by big companies. They also provide large
firms with such services as accounting, legal, and insurance, and many provide outsourcing
services to large companies, that is they hire themselves out to help with special projects or handle
certain business functions (Gruyaert, 2017). Small companies (such as automotive dealerships)
often act as sales agents for the products of large businesses (for example, car makers).

2.1 Micro and small business impact on the economy

Micro business

All micro businesses are small businesses. They are generally defined as a small business
employing nine people or fewer, started for $50,000 or less in initial capital and that may not have
access to traditional commercial loans (Sparky, 2017). They are small businesses in terms of
capital, labor or revenue. Micro Enterprise development organizations provide comprehensive
services to help entrepreneurs start and grow micro-businesses. These services include business
planning, management training, market research, networking, business incubation, and loan
packaging as well as financing of microloans (Cindy, 2016).

Micro enterprises are the smallest component of the SME sector, but increasingly play a major
role in creating jobs for workers in many developing countries, especially for women and young
people. (Lan, 2015)

Spaza shops are informal convenience stores that offer a variety of goods, largely consisting of
snack foods and drinks (Thorne, 2015). It is considered as a micro business.

11
Micro and small business impact on the economy of Vietnam

Micro and small businesses are the only types that can survive while serving a reduced population
in some towns and villages. In a big city, micro and small businesses often offer a more diverse
inventory or specialize in providing unique or personalized customer experiences (Brown, 2018).
Therefore, micro and small businesses contribute to growth and vitality in specific areas of
economic and socioeconomic development, especially for rural areas and areas with slow
economic development. It helps those areas by creating jobs, sparking innovation, providing
opportunities for many people, including women and minorities to achieve financial success and
independence (Gruyaert, 2017). In addition, they complement the economic activity of large
organizations by providing them with components, services, and distribution of their products.
83% of micro and small businesses affirmed that expanding the international market is an
important reason contributing to their growth and development.

Currently, among more than 500,000 businesses, 85-90% are small and super small businesses.
Vietnamese micro enterprises depend heavily on the domestic market, so their revenue is low.
Only 3% of micro enterprises, 4% of small businesses and nearly 9% of medium-sized enterprises
have customers who are individuals and businesses abroad (Lan, 2015). Therefore, the revenue of
micro enterprises is very low. Many reports indicate that the difficulty of establishing, expanding
production and business activities and the support of local authorities are not as expected at the
start, which are important reasons for limiting micro enterprises to participate the international
trade market for growth and development (Duyen, 2018).

According to statistics from the socio-economic census in 2017, the number of micro enterprises
in the past year increased by 65.5% compared to the previous year, accounting for 74% of the total
number of enterprises in Vietnam (Ngoc, 2018).

In September 2017, Ms. Kitnikone - the Canadian ambassador to Vietnam said that micro, small
and medium enterprises are important elements to promote growth and the driving force of the
economy. Micro, small and medium businesses are often dynamic and creative but their markets
are mostly local. These businesses need support in mobilizing capital and accessing regional and
global markets (Thao, 2017). Mr. Hoang Van Dung, Director of Vietnam Chamber of Commerce
and Industry (VCCI) said that there are currently 110 million micro, small and medium enterprises

12
in APEC economies and this group accounts for 98% of enterprises, closing contribute 70% of
export value and create jobs for 54% of the regional population (Thao, 2017).

2.2 Small businesses and business startups contribute to the growth of the social economy

In order to maintain the growth of the social economy, start-up businesses have high influence in
different countries. Startups often offer creative ideas about products and services that can meet
certain requirements that people compare to other businesses (Cuc, 2018). In addition, they can
change the way we live and work. If successful, their innovation can improve our standard of living
and in addition to creating wealth with their business projects, they also create jobs and conditions
for a prosperous society.

Startups are the most appropriate form of innovation and therefore the best mechanism for
commercializing technology and other new things. Startups contribute to the rapid development
of new technologies and locations where they operate. They are the main drivers of economic
development and increasing productivity in a knowledge-based society. Startups create a large part
of new jobs and contribute to the country's economic growth. It promotes the research &
development as well as research & innovation approach of knowledge institutions, companies and
connecting institutions as well as contributes to the applicative orientation of research work at
universities and research institutions. Startups provide more motivation and competitiveness for
the economic system, bring the values of proactivity into the society, change the values of society
and bring a new thinking, socially based on knowledge and creativity. (Sandra, 2019)

2.3 Growth of the social economy

The small businesses in Vietnam have diverse effect on the economy of the country in different
levels (local, regional, national).

13
CONCLUSION
It can be included from the above report that report explained the examination of different types
of entrepreneurial ventures and explanation of how they relate to the typology of entrepreneurship,
exploring the similarities and differences among entrepreneurial ventures, illustration on how
micro and small businesses impact on the economy and explanation of how important small
businesses and business start-ups to the growth of the social economy.

14
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