Entrepreneurship and Small Business

Contents

Day to day business and various enterprises become more popular due to it freedom, nature and other advantages. Among of them businesses, small business becomes more popular among the entrepreneur because of having various special criteria such as it is easy to open, easily managed, limited capital, flexibility, no profit share and other. A small business is type of business that has limited capital and less number of employees or no employees. The person who takes risk to start up called small entrepreneur. This report is based on the Entrepreneurship and Small Business that it will be discuss the various types of entrepreneurships in UK. Among the entrepreneurships, there are some similarities and some dissimilarity that also will be illustrated. Small business has great impact on the UK economy as well. Then the report also showed the importance of small business started and grow in UK economy as well. Then the entrepreneur character will be showed in here which can make different to other. Entrepreneur personality, knowledge and experience impact will be showed here.

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P1 & M1. Different types of entrepreneurship ventures and relation to typology

Entrepreneur is an individual who takes risk to start a business and operates the business with his own willingness. These businesses get chance to be the future industry. An entrepreneur is the individual who has limited resource, idea and planning about any distinct matter where risk is also existed and get profit as the reward of risk taking. There are various types of entrepreneurship ventures existed in the UK market at present base on the size, nature, activity and others. These entrepreneurships are as following-

Small Business Entrepreneurship: Small Business Entrepreneurship is the business where a person takes total risk for business with having limited capital. Small business is managed by the own, his family or sometime hired employee. The capital managed from family member and friends. This is the most popular business all over the world as well as also popular in UK that every day there is many small businesses lunched. According to statistics, there are 5.5 million small businesses in London whereas 97,000 was previous year (Casnocha, 2011). This is not public sector business and non-governmental employees’ business such as travel agency, tourism, Barber shop and other small level of business. This is also related to Business Entrepreneurship because it is creative, motivated, capital investment, risk taking, Versatility and others. This type of business has developed in corporate or private sector.

Scalable Start-up Entrepreneurship- A start-up entrepreneurship venture is new emerged business that mainly developed with having new product idea, innovative product, service and process. The vision of this entrepreneurship is growing very firstly within the market as well. The capital is managed by the financial investor where it successful ratio is higher. The crazy financial investor mainly come to light lime through this business. This entrepreneurship is also type of ventures because it taking higher risks and innovating things (Mullins, 2013). This is on corporate sector business ventures.

Large Scale Business Entrepreneurships: A large scale business is the entrepreneurship where there are many employees, large capital and has balance sheet. There are more than five thousand employees worked, the capital is more than 1.5 billion and total balance sheet over 2 billion. The large scale business entrepreneurship has finite life cycles. Such kind of entrepreneurship grows largely with having sustaining innovation and new variety of product based on the customer demand and test. The large scale business entrepreneurship’s size and culture makes the disorderly innovation intensively to execute. This business is related to the entrepreneurship because there are some characteristic such as risk taking to starting, innovating product idea, higher level of energy and high need of achievement .

Social Entrepreneurship- Social Entrepreneurship is the entrepreneurship that is developed for solving problem related to the social or environmental issues in particular area by creating product and service. The vision of the business is to make better place. This venture has developed for non-profit, for-profit, or hybrid. This is also type of venture because it is motivated, innovative organization and risk taking but in minimal level (Mair and Noboa, 2006). Most of the cases, this venture is developed by the public sector and sometime in corporate sector. This organization is also called the charity organization.

P2. Exploration of the similarities and differences between these three entrepreneurial ventures

The four types of entrepreneurial ventures have explained above where have some differences and similarities found as well. Small business can take worker one or two to manager in some countries where this is also restricted in other country to the business legislation to start.

Small business has taking the full risk of the business in case of risk taking behaviour whereas a group of people takes risk in large Scalable Start-up business venture. Large Scale Business Entrepreneurship is known as public sector business where the risk of the business is distributed to the existing member of the organization as well. Among of the businesses, social entrepreneurship is lower risking business ventures where there is no risk or little risk of the ventures. But all the entrepreneurship ventures have taken risk to sustain in the market that it called the similarity.

The small business, scalable start-up and social entrepreneurship are easy to start where the large scale business entrepreneurship is difficult to staring and among of them small business is more easy to start. Though small venture is easy to start but there is higher risk contain in the operation. In social business, there is no or little risk to start and organized (Mair and Noboa, 2006). Social and small business is also easy to start and social business uses more new latest technology to be faster grower. All the business has taking loan taking facility whereas small and saleable start-up business should take own responsibility.

To manage start-up venture, the skilled employees are needed and to be recruited because it is the most critical business venture in business venture to be effectively and successfully. The social business operation and function is similar to other ventures where the aim, mission and vision are different (Mullins, 2013).

All these businesses have also faces some challenges and this can handle with properly by manager where small business has only one person to manager the whole problem because there is no authority except the owner. The problem can be easily handled in large scale of business because it has great management structure.

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P3. Assess and critically examine the percentage of micro and small business that contribute to the GDP

The business report published by the Rhodes (2016) showed that about 5.5 million business organisation found in United Kingdom. Among the fast growing businesses, there are about 99% businesses ventures are in small and medium entrepreneurship ventures and the number of micro business is 96% that is about 5.3 million. In this yearly report, it is also showed that the micro level business has 0 to 9 people as employees and the 32% employees accounted to this business where as 19% employees turnover from this business as well so that it can said day to day micro and small business is being developed because it has lower turnover rate. The cause behind this is easy to open and management. So, small and micro business has importance to contribute the national economy and wealth distribution.

In London, there are around 10,000 resident adults and 1,464 propel are engaged in businesses where in North East is only 679 person. In 2015, 14,000 employees increased but in 2016 the number comes around 84,000 that is 2 present compare to all employees (Financial Time, 2017).

Additionally, this statistics is also showed that there are about 74% businesses related to the service oriented organisation as well that is called the one kind of small business and entry 79% employees and turnover 72% from here. The hosted business are only 5% from total business and 10% people ensure entry and 15% turnover that means this is negative going. Small business was started to grow in business world from 2000 on an average 3% yearly. But in 2016, the number of small business is increased at 2 million that number is 59% of total business duration (Ons, 2017). Form the time beginning 2000, the small and micro business becomes higher in growing where other business become downfallen.

Figure: Enterprises in UK, 2016

Source: Financial Time (2017)

The small business is more in Southern England than UK. In England there are around 4.8 million private businesses, 325,000 in Scotland and 222,000 in Wales. This report is also showed that 1 million businesses in London and South East have 900,000 employees. Around 823,000(15%) employees work in SME sector as Professional, Scientific & Technical employees and only 10% employees are in Retail sector (Ons, 2017).

There are large and great impact on the Micro and Small business to the national economy to GDP growing. The one fourth of the business are non-employers and do not adopt to VAT or PAYE registration. According to National Statistics 2016, there are 2.5 million hosted in the private sector including to the VAT or PAYE registry. There are also un-registered businesses around 3 million. The national and local government help them to grow because it support in the critical stage of economy and gives more support to the education, health care and transport sectors (Financial Time, 2017). Due to the Brexit, the economic condition become threated where it can be overcame through small and micro business.

P4. Importance of small businesses and business start-ups to the growth of social economy

Social entrepreneur ventures are the entrepreneur that main aim is to social service and welfare for people to eradicate the social problem where profit is not main concern as well. From intrapreneurial perspective, the social businesses are started where many large scale organizations contribute to start up this as their additional part and from social responsibility. The operation system of this business is like other business but the goal and objective of this are changed that main objective is to help people or social welfare.

According to Social Enterprise UK (2017), around 70,000 social enterprises has been grown in 2012 that has great contribute to the national economy as well around £18.5 billion and there are millions of people are related to it. The Social Entrepreneurship report 2009, shows that there are younger people are eager to engage it whereas their age was 18 to 24 years and rate is 4.4%. Besides the younger people the elder people are also interested to social enterprises business about 1.7% involvements.

The national economy is also great impact on the growing market of small and micro business. This business ensures the job facility for the local people where before they were not engaged to any economic activities. The unemployed people get the employment facility that enhances the GDP of national economy (World Bank, 2017). The total TAX and VAT paying quantity is higher than any other business sector that is also helpful for national economy. The Welfare trust fund has been developed with the national income from TAX and VAT paying and contributes to social development. Small and micro business has frequently changed because there is no bureaucratic problem and easy to change as well that helps to grows social economy (Williamson et al, 2006).

M2. Difference small, medium and large businesses make to the UK economy

The small, medium and large businesses statistics is discuss above and among of the business, small business has much more contribution. The medium size business is also help to national economy whereas large business becomes threaten due to Brexit where they faces economic crisis to sustain in the market where as small business can change their system because it is more flexible to change (World Bank, 2017). After economic crisis, the Financial Time conducts a survey on CEO of large company where most of them show their fractionation and gloomy mentality. From the all organizations only 8% have expectation slightly to improve and rest of the businesses are not. In macroeconomic prospects, only 21% companies have expectation and 43% said exposed negatively to their condition.

Task 3

P5 & M3. The characteristic traits and skills of a successful entrepreneur that differentiates them from other business managers

To be success entrepreneur, few traits and skills are essential to make differentiate from one entrepreneur to others. The skills and traits are needed to be successes that are as following-

Passion & Motivation- Passion is the behaviour of entrepreneur that has zeal to get something. The passion of an entrepreneur is to develop the business after getting loss sometime. Motivation is also forced an entrepreneur to change the plan of business and motived to him for taking steps (Lee and Tsang, 2001).

Risk Taking- This is the best characteristic of a successful entrepreneur where it brings success to the business where the failure entrepreneur do not take this as well. The profit is called the reward of taking risk. Risk taking behaviour is essential to make differentiate to others.

Self-belief, Hard work & Disciplined Dedication- Self-belief, Hard work & Disciplined Dedication all these are needed to keep in successful entrepreneur where an entrepreneur can devote to work.

Adaptability & Flexibility- Adaptability & Flexibility are essential nature of an entrepreneur where it takes every situation easily and changes the nature as their wants.

Money Management- Money management is essential for business where it grows capital and other expenditure in business. The loan managing capacity is also included this characterises that differentiate to other entrepreneur (Lee and Tsang, 2001).

Planning- Planning is the also essential characteristic for an entrepreneur where without planning he can be failed that characteristic can be different the successful entrepreneur.

Networking Abilities- Network making among various levels can be treated as the great skills of an entrepreneur where it increase or enhances the business among friend and family that a successful entrepreneur does (Lee and Tsang, 2001).

These are the determined traits and skills that help an entrepreneur to be differentiate than other as success entrepreneurs from other business entrepreneurs.

P6. The entrepreneurial personality reflect entrepreneurial motivation and mind set

Entrepreneurial personality has a great impact on the business where it helps to change the other person mentality as well. The personality shows the entrepreneurial traits and skills that are including risk taking, hardworking, networking, managing, plan and others. These personality can motivated the others and mind-set of the manager. The reason of taking risk of an entrepreneur is developed by motivating himself that is helpful for job life. Motivation is so much important to be success in small business. Motivation gives an entrepreneur to start and business, plan making, risk taking and others where motivation works as medicine for mind (Taormina and Kin-Mei Lao, 2007). The mind-set of the entrepreneur helps the employees also to be motivated. Due to have aggressive behaviour an entrepreneur makes the employees negative attitude. So, entrepreneurial motivation treats as the model of small business.

Personality of an entrepreneur has great impact on the small and micro business and mindset of the other people as well. An entrepreneurhas have to be planted to their work that helps the business area to enhacne. The great caracteristic of an entrepreneur is risk taking behaviour where it helps to stronger to reach objective. An entrepreneurial identity is varied from person to person where it is essential to reflect on business. Personality is essential for mind-set to other entrepreneur and related person . So every entrepreneur has to be kept practicing the personality to be success in entrepreneurial activities.

P7 & M4. Examining about how background and experience can hinder or foster entrepreneurship

Entrepreneurship Background refers the personal experience and experience where it gives much advantage to the conduct the entrepreneurship. This is the incident that a person faced before and gathers experience through the incident. Experience of an entrepreneur is gain the real field knowledge from realistic incident. Both of the things are essential for becoming a successful entrepreneur. For example- For the first time an entrepreneur stared a business that become losses that is experience and a person comes from business family and he knows the business very well that is background information about the person. The new entrepreneur becomes loses due to buyer shortage (Taormina and Kin-Mei Lao, 2007). From this, it can understand the matter from the background information. If the entrepreneur explores the cause of failing then he gather experience rather the background information. But analysing the background information, a person can understand the knowledge that is also essential but less effective than experience.

Both of the background and experience can foster entrepreneurship that brings positive result as well. These can teach the entrepreneur what should be done in future and what not by falling some situation as well. In this regarded, background and experience can foster entrepreneurship.

Conclusion

After all in concluding remark it can be said that there are various entrepreneurships and particular entrepreneurship has great impact on the national economy and entrepreneurship has some similarity and dissimilarity. Today’s people have softer cornet to small and micro business that helps to economic growth. The character of an entrepreneur is essential that is called the indicator of success. Entrepreneur background information and experience is also important for success.

Reference(s)

Casnocha, M. (2011). The Four Types of Entrepreneurship. [online] Available at: http://casnocha.com/2011/02/the-four-types-of-entrepreneurship.html [Accessed 23 Oct. 2017].

Financial Time. (2017). 44 charts that explain the UK economy. [online] Available at: https://ig.ft.com/sites/numbers/economies/uk?mhq5j=e6 [Accessed 20 Oct. 2017].

Lee, D.Y. and Tsang, E.W.(2001). The effects of entrepreneurial personality, background and network activities on venture growth. Journal of management studies, 38(4), pp.583-602.

Mair, J. and Noboa, E. (2006). Social entrepreneurship: How intentions to create a social venture are formed. In Social entrepreneurship (pp. 121-135). Palgrave Macmillan UK.

Mullins, J. (2013). The New Business Road Test: What entrepreneurs and executives should do before launching a lean start-up. Pearson UK.

Ons. (2017). Economy - Office for National Statistics. [online] Available at: https://www.ons.gov.uk/economy [Accessed 24 Oct. 2017].

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Rhodes, C. (2016). Democratic business ethics: Volkswagen’s emissions scandal and the disruption of corporate sovereignty. Organization Studies, 37(10), pp.1501-1518.

Social Enterprise UK. (2017). Leading the World in Social Enterprise 2015. [online] Available at: https://www.socialenterprise.org.uk/state-of-social-enterprise-report-2015 [Accessed 28 Oct. 2017].

Taormina, R.J. and Kin-Mei Lao, S., 2007. Measuring Chinese entrepreneurial motivation: Personality and environmental influences. International Journal of Entrepreneurial Behavior & Research, 13(4), pp.200-221.

Williamson, D., Lynch-Wood, G. and Ramsay, J. (2006). Drivers of environmental behaviour in manufacturing SMEs and the implications for CSR. Journal of Business Ethics, 67(3), pp.317-330.

World Bank. (2017). Small and Medium Enterprises (SMEs) Finance . [online] Available at: http://www.worldbank.org/en/topic/financialsector/brief/smes-finance [Accessed 28 Oct. 2017].

Entrepreneurship and Small Business

Introduction

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