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2018

Entrepreneurship and Small Business


Management
Contents
Introduction: .................................................................................................................................... 2
LO1 Explore and illustrate the range of venture types that might be considered entrepreneurial .. 2
P1 Examine different types of entrepreneurial ventures and explain how they relate to the
typology of entrepreneurship. ..................................................................................................... 2
P2 Explore the similarities and differences between entrepreneurial ventures. ......................... 3
M1 Investigate a diverse range of entrepreneurial ventures to demonstrate an understanding
of entrepreneurship in both the public and corporate sector. .................................................. 4
LO2 Assess the impact of small businesses on the economy ......................................................... 5
P3 Interpret and assess relevant data and statistics to illustrate how micro and small businesses
impact on the economy ............................................................................................................... 5
P4 Explain the importance of small businesses and business start-ups to the growth of the social
economy. ..................................................................................................................................... 6
M2 Evaluate the differences small, medium and large businesses make to the economy,
applying relevant data and statistics. ...................................................................................... 6
LO3 Determine and assess the key aspects of an entrepreneurial mind set .................................... 7
P5 Determine the characteristic traits and skills of successful entrepreneurs that differentiate
them from other business managers. ........................................................................................... 7
P6 Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation and
mind set. ...................................................................................................................................... 8
M3 Explore and examine different lines of argument relating to entrepreneurial characteristics
................................................................................................................................................. 9
LO4 Examine the different environments that foster or hinder entrepreneurship .......................... 9
P7 Examine, using relevant examples, how background and experience can hinder or foster
entrepreneurship. ......................................................................................................................... 9
M4 Analyse the link between entrepreneurial characteristics and the influence of personal
background and experience to specific successful entrepreneurs. ........................................ 10
Conclusion: ................................................................................................................................... 10
References: .................................................................................................................................... 10

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Introduction:
An entrepreneur is a person who developed a business plan and implement the plan.
Starting a business in not an easy task. Many parties and policies involved to open and run a
business. Entrepreneur designed a business plan, form a business, organized the business and take
policies to create the business successful and profitable. Now 1.3% number of business are
increased last year. So the tendency of start a new business in increasing. Obviously every business
plan not become successful. A statistics shows that more than 80% of business are closed in 3
years. So compete and survive in business is tough. Entrepreneurs should know about their
business and realizing the plan. They should fixed the business goal and fixed a way to achieve it.
Businesses are contributed in national economy also.

LO1 Explore and illustrate the range of venture types that might be considered
entrepreneurial
P1 Examine different types of entrepreneurial ventures and explain how they relate to the
typology of entrepreneurship.
Entrepreneurial ventures are the types of business farm that an entrepreneur start. The
business farm can be mainly four type’s are-

Small Business Entrepreneurship: Small business organizations are those have less than 50
employee and total turnover in a fiscal year is less than 10 million euro. So small business can start
easily and it can start up within few days and few legislation over the business (Carter, 2012). For
this reason more than 99% of business farm are in this category. Small business can be salon,
grocery shop, broadband internet service provider, beauty parlour, small restaurant and so on.
Entrepreneurs need to willing to start and few problems faces rather than others.

Scalable Start up Entrepreneurship: Scalable start up entrepreneurs have high vision to understand
and run a business. They did not invest like the normal entrepreneurs but they have the forecasting
power. This attract the venture investor. They hire the best entrepreneur and to invest in right farm.

Large company entrepreneurship: Large Company has more than 250 employees and early
turnover more than 50 million euro (Burns, 2011). Large Company developing is really a hard
task. Organized the structure and for producing the product is tough. Entrepreneur need a good

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organization and communication skill because every day he need to deal with various type of
parties. Some are internal and some are external of the organization.

Social organization: Social organization are runs for welfare of the society and the members of the
organization. Most of social organization are non-profit organization. Most of the time they just
save a portion of profit for further development of the company.

Entrepreneurs can be different type. Each of the entrepreneurs have different aim and different
goal. They designed their business that help to reach their real goal. The lifestyle entrepreneurs
who are works for their profitability cause they want to live a stylish and happy life. So most of
the time they withdraw money for their selves and always they are try to developed their status.
On the contrary the growth entrepreneur works for raise the profit for their business (Gibbs, 2009).
They do not withdraw extra money from their business and they always try to expand their business
by reinvesting the profit or money. Serial entrepreneurs are continuously come with a new business
idea and form a new business. Sometimes they sell their business ownership or start a new
business. Serial entrepreneurs are quite different because they do not stick a business after being
successful they change the business and start a new business with another idea.

P2 Explore the similarities and differences between entrepreneurial ventures.


Every business need to have a creative and innovative mind to reach success. Every day
every time entrepreneurs are seeking for new ideas and new information. So whether it small,
medium or large first need a business idea that will work in real world. The main target of any
business to earn profit and for earning profit customer satisfaction is also important. So it is
necessary that entrepreneur should know about the target customer and their buying behaviour. If
entrepreneur failed to target the customer the business idea will be failed. So forecasting power is
very important. Running a business successfully demands managerial power. Entrepreneur need
to manage everything that part of the production. The production elements are three types. First is
Land, all types of natural resources that not created by human beings like river, mountains, lands,
coal, petroleum etc. Than the second element is labour, the employees who are works for the
business farm. Labour can be two types those are given physical effort and mental effort both are
under the sector of labour(Carter, 2012). The third one is capital, the wealth created by human.
Capital can be in cash or resource like building, machinery etc. All entrepreneurs need to deal with

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these three elements. So the creative and organizational power is needed for all types of
entrepreneurial ventures.

Though the main work is same but always there are different form of business and every
entrepreneur has an identical idea. The implementation type of the idea is different. Some business
are about production, some are giving services or maybe even non-profit business like social. So
entrepreneur planning and the desired result can vary person to person. Some entrepreneurs doing
business for himself called lifestyle entrepreneur. They only try to improving their life style by
doing business. Some entrepreneurs focused on business goal that give them bigger and more
profitable in future (Burns, 2011). This kind of entrepreneurs are called growth entrepreneur. They
withdraw less money from their business.

M1 Investigate a diverse range of entrepreneurial ventures to demonstrate an understanding of


entrepreneurship in both the public and corporate sector.
Entrepreneurs are take the risk of being failure. In every business sector the risk exist. In
public limited business company the risk is limited by the investment. The entrepreneur sell his
business ownership to general public and collect more money to invest in business. For selling
ownership the business must, meet some criteria that given by the law. In public limited sector if
the business fail the liability is limited by the investment it means if the liability is greater than the
total company asset than the creditors cannot claim any personal property (Gibbs, 2009). In
corporate sector entrepreneurs collect their investment from their own property, bank loan or
taking loan from relatives or others. They cannot sale their company ownership to the public and
their risk is unlimited. If the company bankrupted and no fund to pay the liability, the court will
announced to take the personal property. So it is a bigger risk than public limited company.

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LO2 Assess the impact of small businesses on the economy
P3 Interpret and assess relevant data and statistics to illustrate how micro and small
businesses impact on the economy.

Micro and small business name maybe not known by others. Most of these business are
exist in local market and serve the local customer. The names are not that much big but in total the
contribution in economy is big. The small business are contribute more than 99% of total number
of business in UK. The small business contains maybe less than 10 employees in an business farm
but now in UK there are more than 7 million small business existing. The entrepreneurs are not
only finding a business for himself but also creating new job opportunities for others. The impact
on the economy are-

1. Unemployment problem: Unemployment problem is disaster for every economy.


Unemployed are those are capable and seeking for a job but don’t find any job in minimum
6 months. If any country’s people unemployed that means they not engage production and
it is waste of human resource. The Forum of Private Business, a business group
representing SMEs, says that small businesses are responsible for 15.2 million jobs (Burns,
2011). Small business is good option for any entrepreneur because it needs less investment
and lower legislation than others.

2. Tax generate: The business persons give tax to the government. It helps to raise the fun of
the government and next the government can use the fund for social welfare.
3. Serve the people: Businessman earn profit by serve the people. Small business
entrepreneurs are serve the local people mostly. But the local people are get much better
service. The local unemployment problem is also solved by the small business because
there are very few business that can conduct personally.

So by doing small business entrepreneurs contribute the national economy and makes the local
economy strong.

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P4 Explain the importance of small businesses and business start-ups to the growth of the
social economy.
There are more than 7 million small and medium business in UK. Joining all of them are
contribute in national economy by-

1. Job contribution: Entrepreneurs are not only contributing themselves into a business but
also they hire other people as an employee. Now around 22% of all employees are
contributing in small business.

2. Local economic growth: Small business runs their operation in local market and they hire
employee from local market (Gibbs, 2009). That strength the local economy. Local people
become more financially independent and find a job for them.
3. Future growth: Some of the small business are fails but some are become a giant
corporation in future. We know some famous name like Microsoft, Apple, Disney etc. All
these giant company start their business as a small business. A small business serve to its
local customer and contribute country’s economy by giving tax.

Small business contribute social economy by creating job opportunity and serve local customer.

M2 Evaluate the differences small, medium and large businesses make to the economy, applying
relevant data and statistics.
Small business are those have less than 10 employees and yearly turnover less than 10
million euro. Now in United kingdom more than 99% of all business are small and medium
business. Entrepreneurs are joining in business and operates in local market (Gibbs, 2009). Now
more than 5,695,000 persons are holding job in small and medium size business. The 22% of total
public and private sector. Medium business are having less than 50 employees. This kind of
business are larger than small business. Sometimes one or more entrepreneurs join together to
operate this business. It is a bigger business form so needed more employee and management
system. So most of the more than one entrepreneur established this kind of business. Large
business are overall less than 0.03% in UK in terms of total business. The turnover is more than
50 million euro in a fiscal year. The number of employee is more than 250 in this type of business.
Now nearly 48% of total employee are working in large business organization (Carter, 2012). So

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any forms of business organization engaged employee and open working opportunity for people.
The unemployment rate is reduced. Most of the nation civilian are working and contribute in
nation’s productivity.

LO3 Determine and assess the key aspects of an entrepreneurial mind set

P5 Determine the characteristic traits and skills of successful entrepreneurs that


differentiate them from other business managers.
A successful entrepreneur need some quality that help to differentiate him from others.
Everyday many people generate some idea but it implement in real world is tough. A successful
entrepreneur implement his plan by form a business and make the business profitable for him.
Business world is so much competitive than any other so the quality needed to compete with others
are-

1. Creativity and innovation: Creativity is making something new or develop a new plan that
solve any problem. Innovation is making the plan successful in real world. Creativity helps
to start a new business that solve a customer problem. The more efficiently problem solved
the more chance to success in that business.
2. Passion and motivation: Entrepreneurs have the passion of doing business. They enjoy the
new challenge and never give up. If a business idea fails they need to search the cause of
failure and they should try again (Burns, 2011). They motivate themselves that they can do
it. Many business magnet fails there first business attempt and successful in later.
3. Risk taking: Now the business world is so much competitive. Every type of business has
competitors and possibility to be failure. An entrepreneur should have enough courage to
take the risk. Entrepreneurs can use some techniques to minimize the risk but the minimum
risk should be taken.
4. Self-belief, Hard work and discipline: Entrepreneur should believe himself that he can do
the business and after some days he will be a successful businessman. The business idea
of his is good and he operates the business well. Hard work is the key to become successful
in any stage in life. So entrepreneurs should work hard in a disciplined way.

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5. Adaptable and Flexible: Business environment are changing overtime. Sometimes the
changes are so quickly that some entrepreneurs cannot cope with the change. Sometimes
new technology invent or political environment change that affect the customer and
business (Gibbs, 2009). So the plan of business need to be flexible that can change in
emergency. Entrepreneurs should adapt in any types of business change.
6. Product and Market Knowledge: The buying behaviour of target market is important. What
customer feel about any product and understand their need is very important. If the
entrepreneur understand the customer needs than he can develop a product that will buy
the customer.
7. Money management: The sources of investment and the department of expense is really
important. All business need an investment to start and the invested money distribute and
execute in proper way make the business profitable (Peteres, 1992). Entrepreneurs always
should try to reduce the expenses that give the more profit for business.
8. Communication skill: In business, an entrepreneur need to contact and deal with many
parties. The internal and external people of the business who has interest and effect on
business. A good communication skill satisfy all the parties and help to run the business
properly.

A successful entrepreneur should have many qualities. The quality can be vary but leadership and
creativity is the most important for all types of entrepreneur.

P6 Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation


and mind set.
According to Schumpeter, Perhaps, the most distinguished scholar when it comes to
entrepreneurship, the entrepreneur is an actor that has the ability and drive to carry out
innovations, characterized as a new source of raw material, a new method of production, a new
product, a new market and/or a new 3 Organizational principle (Schumpeter, Becker, Knudsen &
Swedberg 2011). To be an innovative entrepreneur one should dynamic and adopt with the
changing environment, Schumpeter focuses on this mind set. Entrepreneurs need to establish a
business to implement the ideas and collaborate the employees. For succeed the plan and turn the

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plan into possibility entrepreneur must autonomous in business organization. Autonomous is a
motivator for every entrepreneur. Schumpeter says profit is not the best motivation tool for
entrepreneur. The main motivator is develop an idea and realizing the idea. But profit is not entirely
unimportant. However, making profit is less than the realizing the idea and implement the idea.
He give four traits of an entrepreneur that should in entrepreneur mind are Extraversion or
Surgency (talkative, assertive, energetic), Agreeableness (good‐natured, cooperative, trustful),
Conscientiousness (orderly, responsible, dependable) and Emotional Stability Versus Neuroticism
(calm, Not neurotic, not easily upset). Entrepreneur should be energetic and positive about the
business success. They need to contact with different types of people so they should talkative,
cooperative and trustful to others. They should take responsibility and complete their work
orderly. In the circumstances that not in favour they should be calm and find a way to solve it.

M3 Explore and examine different lines of argument relating to entrepreneurial characteristics


Entrepreneur need different types of qualities. We can say many qualities name but all the
quality really need to be a successful entrepreneur. Maybe it is not. Because it is impossible to
have all the quality in one person. But many of the entrepreneurs are become successful in their
business. Most of them have creativity, hardworking and positive mind, leadership and some other
qualities (Burns, 2011). It is important to realize the idea and realize is the idea really work in real
life. The most familiar argument is the entrepreneur is made or born. The most realistic answer is
it can be both. Some qualities man brings with their birth like extrovert, leadership etc. But
managerial skill can be develop by training. Many entrepreneurs those don’t have professional and
academic qualification but they become successful. So entrepreneur can be both made and born.

LO4 Examine the different environments that foster or hinder entrepreneurship


P7 Examine, using relevant examples, how background and experience can hinder or foster
entrepreneurship.
Background business experience always give an extra advantage to the entrepreneur. If he
have the experience he really knows how the business working, what type of problems can be arise
in business and about the market of that product. The entrepreneur know the buying behaviour the

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customer need and how to satisfy them (Carter, 2012). They have the information and realistic
experience that always step ahead in terms of those who has no idea to operate a real business.

M4 Analyse the link between entrepreneurial characteristics and the influence of personal
background and experience to specific successful entrepreneurs.
Now the customers have the full information what they want to buy and what a business
offering to them. They are always searching for something new or added value (Burns, 2011). So
it is really important to identify and understand the customer need. The entrepreneur have previous
experience he has better knowledge about the market. For example, a barber who works for a big
salon can start a new salon. Because he knows what type of cuts customers want now and thus he
has experience of working he can serve well than the newer.

Conclusion:
Entrepreneurs need some quality to be successful. Entrepreneur should positive towards
their goal. They should creative & innovative and have the courage of take the risk. They need to
imply the business idea and start a business. Now most of the business are fails to identify the
opportunities. So entrepreneurs should have forecasting power that will help him to imagine the
next business market. Entrepreneurs are make profit by serving people. They brings some new
ideas that serve well than the previous. Business organization contribute in national economy. It
helps to reduced unemployment, better lifestyle and personal independence. Government can earn
more tax from business and it increased the production of the country. By this way economy get
strong.

References:
1. European Commission (2009), Entrepreneurship in the EU and Beyond - A survey in

2. the EU, EFTA countries, Croatia, Turkey, the US, Japan, South Korea and China, Flash

3. Eurobarometer 283.

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4. Gibb, A. (2009), “The small business and entrepreneurship challenge to vocational
education: Revolution or evolution?”, paper presented at the OECD Conference on SMEs,
Entrepreneurship and Innovation, Udine, Italy, 22-23 October 2009, OECD LEED
Programme, Paris.

5. Hisrich, R.D. and Peters, M.P. (1992), Entrepreneurship: Starting, Developing, and
Managing a New Enterprise, Irwin, and Boston, MA.

6. Hoffman, A., N. Vibholt, M. Larsen and M. Moffet (2008), “Benchmarking


entrepreneurship education across US, Canadian and Danish universities”, in J. Potter (ed.),
Entrepreneurship and Higher Education, OECD, Paris, Ch. 6, pp. 139-164.

7. Inter-American Development Bank (2009), High Growth SMEs, Innovation,


Entrepreneurship and Intellectual Assets: Study of High Growth SMEs in Brazil, Chile,
and Mexico.

8. BURNS, P (2011) Entrepreneurship and Small Business. 3rd Ed. Basingstoke: Palgrave
MacMillan. DOWN, S. (2010) Enterprise, Entrepreneurship and Small Business. London:
Sage.
9. CARTER, S. and JONES-EVANS, D. (2012) Enterprise and Small Business: Principles,
Practice and Policy. London: Pearson.
10. GRIFFITHS, A. and WALL, S. (2011) Economics for Business and Management. 3 rd Ed.
Harlow: Pearson.

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