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Impact of Small and Micro Business on Economy

Answer :

INTRODUCTION

Entrepreneur is a person who starts new business to work on innovative ideas. While entrepreneurship is the art of portrait innovative idea in market through commercial activity. These days’ changes are taking place in environment very frequently through entrepreneurship strategies which are effective and significant for satisfying needs of society. There is difference in thought process of every person, so it is important to display it in market through which positive ideas can be generated (Acs Autio and Szerb, 2014). Small business can be started by entrepreneur but it will be successful when they work according to market trend. In this study there is discussion about various entrepreneurial ventures and its similarity and difference, impact of small and micro business, growth of economy because of small business, traits present in entrepreneur, Impact of entrepreneurial personality, past impact and experience of entrepreneur on business operations.

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TASK 1

P1 Different types of entrepreneurial ventures

Entrepreneurship- This is the concept which works according to knowledge and requirement of society. Entrepreneur runs some business with his/ her capability, skills, knowledge, experience, etc. which helps to know what can be done through which satisfaction among customers are more.

There are various types of entrepreneurial ventures such as scalable, start up, small business, social, large entrepreneurship. They are discussed as under-

Scaleable start-up entrepreneurship- This is the entrepreneurship which work behind some specific ideas. There is much risk in this sector but at the same time return is entrepreneur is also more. There is need of funds which help to work according to market trends through changing their plans and policies.

Small business entrepreneurship- Small business involves under 50 employees which helps to increases sales and profits. There are possibilities that due to working according to knowledge and requirement of market(Bhachu, 2017). They give employment in society, this helps to get use of various changes which are beneficial for growth of economy.

Social entrepreneurship- In this entrepreneurship, there is discussion about some problems. This is important for providing good image in market and gets aid from government. This helps to improve standard of society and some voluntaries work to serve society. Sometimes there are problems related to raising funds.

Large entrepreneurship- This is the biggest form of business, which has numerous workers and operate in various parts of country. Main behind this venture is to earn profit and provide satisfaction to customer. They conduct market research and make strategies which are significant for business growth(Brandstätter, 2011).

Types of typologies

In market there are various person having different ideas which they display in market. This makes change in roles and responsibilities of entrepreneurs. Some types of typologies are as under-

Serial entrepreneur-These entrepreneurs work according to knowledge and their experience. These people have many ideas in their mind and they perform various activities back to back. They launch one idea and then after success switch to next. This helps to create employment and reduce poverty from society.

Female entrepreneur: As per name, in this there is female candidate who perform, manage and operate business operations. There is more role of females as compared to others.

Male entrepreneur: In such business, male candidate is more effective. They have capability to coop- up with market trends and perform research through which changes can be taken in business.

Lifestyle entrepreneur: These days lifestyle entrepreneur are more famous in industry. As they are working to satisfy demand of customer which is trendy and latest it helps to provide latest trend to customers. Setting this type of business is expensive and time consuming(Dacin, 2010).

P2 Similarities and differences of different types of entrepreneurial ventures

There are many many ventures which are discussed above. There is difference as well as similar property among them. So business activities can be performed in efficient manner. Difference and similarity between various entrepreneurial ventures are discussed below-

Serial Entrepreneurship Ventures

Lifestyle Ventures

Similarities:

  • They have various ideas for which they work one after another.
  • This business has long growth policies which makes good and long relations with external parties.
  • They have new and creative ideas which are not linked with each other but associated with satisfaction of society.

Similarities:

  • In this also there is changing in trend so entrepreneur has to work as per market environment.
  • They have many changes which are taking place in market and this helps to promote changes in market.
  • They work in lifestyle stream so this helps to work according to trend and requirement of people.

Differences:

  • In this powers are associated with one person.
  • There is work on unrelated activities.

Differences:

  • Powers are distributed among many people.
  • There is practical implementation of trend which is running.

Female Entrepreneurship Venture

Male Entrepreneurship Venture

Similarities:

  • Profit and expansion of business is main motto of this venture.
  • They work according to market trend and might be for seasonal purpose.

Similarities:

  • Profit generation is one of the factors which can be attained by working according to market trend.
  • They have to run for making resources available and there is optimal use of resources.

Differences:

  • Market analysis is low.
  • Might not able to work as per change in market.

Differences:

  • Male entrepreneurs analyse market more as compared to female entrepreneurs.
  • They accept changes and work in dynamic environment.

TASK 2

P3 Impact of small and micro business on economy

There are various types of business enterprises which are working to make upgrade and improve condition of country. It is essential to know what has to be one through which changes are significant and essential to analyse changes. There are many changes which are taking place in society which has to be accepted by entrepreneurs (Dennis Jr, 2011). There is positive impact of opening new business in market, this helps to improve living of standard, reduce poverty, increases creativity, etc. While adopting changes it is necessary to consider all factors which are significant for market growth and improving position of association in market. There are various types of organisation which have their own scope, working style, etc.

Micro Businesses: This is the initial level at which business starts by people at family level. Mostly, this business is managed and controlled by managers of family members to earn their livelihood. They might not get affected because of lack of finance, lack of resources, etc. Such kind of organizations are possessed by single individual with minimum five or less number of workers. Their key objective is to acquire enough cash to satisfy the necessities and want of their family members. This type of firm is run by Sole-Proprietor keeping in mind the end goal to fulfil their essential want. These can be worked with little capital and they have adaptable legal structure because of less involvement of people.

Small Businesses: This is at upper level as comparison to micro level. This business is run by person having same type of product or services to serve but they make changes in it according to demand and requirement of society. They work according to market trend and hence they can earn profits easily.Such enterprises practices its business operation in nearby economies. They have lesser number of workforce when contrasted with huge organizations. Their fundamental preference is they basically evaluate the necessities and want of their target customers and make products accordingly. However it is little difficult for a individual to deal with and oversee independent venture, as it is better to operate with at least by two person or more. Their primary goal is to gain adequate benefit with the goal to manage its day to day operation in an effective manner. Such kind of firms are customer oriented as they can without much of a stretch change or alter their items according to purchaser's needs and wants.

Medium Businesses: In this business there is involvement of 300-400 employees which work according to directions and guidance of supervisors. Top level managers are working to attain changes which are significant for growth of business. In this business customer demand has to be considered by managers and provide services accordingly(Durst and Runar Edvardsson, 2012). These enterprises are operates on large level as compared to micro and small. They do their business task so as to capture high market share of the overall industry and amplify their benefit. Medium Business is regularly worked by organization since it ends up troublesome for a solitary individual to deal with whole workforce extending between 250-500. All accomplices similarly share benefit and misfortune and they additionally have meet assent in basic leadership process. Obligation of accomplices is constrained to some degree in such kind of organizations.

There is impact of small and medium business on economy too. This helps to provide growth to economy of country. To promote entrepreneurship government is also framing policies which promotes entrepreneur to launch their ideas in society. Impact of micro and small business on economy is as under-

  • Increase in GDP: This is the area at village level. Through entrepreneurship handicraft work, pottery, etc. gets enhanced. This help to earn some money and improve living of standard. As GDP of country gets improved because if improvement in living of standard at low level. GDP gets improved from 6%- 8%.
  • Employment generation: This is main benefit which is done with the help of small business. As per this concept there is use of some knowledge which is effective for making changes in roles and responsibilities of people residing in society(Ebert and et. al., 2014). This creates awareness among people. Unemployment gets reduced in country from 14%-11%.
  • Tax revenue and generation: There are some policies run by government which works according to demand of society. There is generation of revenue ton government as tax. Government also motivates entrepreneurs to come wit ideas and money regulations gets tarted. This helps to create good relations with one another country. Tax collected from small business are less but it increases gradually so it helps to improve condition of country(Fisher, 2012).

P4 Contribution of small businesses and start-ups to growth and social economy after Brexit

Brexit: Brexit means exit of Britishers. In 2016 there is policy of Union Trade, which talks about leaving European trade. In order to remove any kind of conflicts, there is voting by member countries. As per this concept there is important role of small and medium business to improve condition of country. Through Brexit there is good relations between member countries which work according to market trend(Neck and Greene, 2011).

Difference between small business and start up business

Small Business

Start Up Business

  • This is the business which operates at small level tom earn livelihood.
  • In this there are possibilities of continuous with services and product which are already existing.
  • There main aim is to earn profit and livelihood.
  • This business works at level of sole proprietor, partnership.
  • When person has some new idea so they start-up is established. In this person himself is employee as well employer.
  • In this new ideas are generated which are not existing in market.
  • In this there is use of technique which promotes new ideas which is associated with problem faced by society.
  • This business is run by single person.

Contribution of and importance of small business on UK social economy

Social and Economic development: There is positive impact on social and economic condition of country with the help of small and medium level. This helps to promote social welfare of country through social entrepreneurship. There is monetary generation of people which are effective for making changes in roles and responsibilities.

Social security standards: Social security gets improved with the entrepreneurship as it helps to make changes in working style. There are possibilities that due to knowledge of new idea to society then demand will generated. There is employment generation and earning is possible with the help of entrepreneur (Schaper and et. al.,2014) .

Contribution to taxes and revenues: Tax is one of the main revenue which is required by government to run. There is need of various policies which are run by government to promote entrepreneurs. There will income generation through which condition of country can be improved. Through entrepreneurs income can be earned which helps in improving condition of country.

Providing employment: Employment can be generated with the help of small business. As this helps to give employment to people which are important component which helps to generate revenue. When one person is starting business then there are many more peiople who get chance to employed (Shane, 2012).

TASK 3

P5. Explain the traits, skills and characteristic of successful entrepreneur

An entrepreneur is a person who created business on their own and all the risk associated with firm is incurred by him in the hope of generating more profits. These entrepreneur work with the right attitude and their goal is to make company the successful one. They have strong motives which results in to attain overall goal effectively and efficiently. Jeff Bezoz and Walt Disney are the very famous entrepreneur they both have different traits and skills which created history(Stokes, 2015). Both are possessing variety of skills and features that offers them the appellation of successful businessman.

Jeff Bezos:

He is the chair person and founder of Amazon.com that is the number one online shopping retailer. In beginning he started the firm which sells the books to large number of customers and in the last he end up with developing a platform that meet the each and every wants of an individual. This is only done when there is strong inner passion for business. Different skills and traits of Jeff Bezos which make him successful entrepreneur that are as follow:

  • Innovator: Jeff is very great innovator, when he was in his childhood day. He developed sound alarm that work as a signal for him from their siblings. His innovation grows with the span of time. Those who love reading online books, Jeff develop Kindle for them.
  • Risk taker: Jeff is a risk taker as he started his business with very less investment. He has only source of fund is his parents. Jeff knows that he has 70% chance of failure but still he work hard for his dreams and he is successful as currently Amazon.com is the world largest retail online shopping website (Schaper and et. al., 2014).
  • Highly competitive: He is the person who is highly competitive with their competitors because he believes in reducing the rivals and capture their market.

Walt Disney:

He is be like an innovator and dreamer. He was considered as a master mind of American Animation industry who became popular after developing Disney and its main character Mickey Mouse. Below explained points shows various characteristics of Walt Disney which gave them title 'innovator of animated cartoons'.

  • Be a sales person: Walt stated that every person is a dreamer but for being successful he must have a capability of selling its dream. To become a successful salesman, a person should cultivate following characteristics such as courtesy, patience, perseverance and knowledge (Schaper, 2016).
  • Serve others:- Walt conceives that one can only become successful if he wills to serve others. He consider his employees as a part of his family and treat them equally. He also provide financial help to his secretary by paying for her entire reception.
  • Have visions:- Walt belief that one should have to set visions to become successful. Visions provides them guidance to work in a systematic manner that leads to attain their aims. He has the inner passion that inspire him to work hard and follow his dreams.

P6 Affect of entrepreneurial personality

Five Factor Model is one of the commonly used method which is famous for it's feasibility and management. These five factors ordinarily depict the mind and identity of various people. These can be characterized as neuroticism, extraversion,openness to involvement, extraversion, reliability and extraversion which are frequently considered as OCEAN model. Big Five identity characteristic which is regularly in view of the identity of various person. Each component is connected with other essential variables. Beneath specified are the point by point clarification of these five variables:

Openness to Experience: Openness for the most part mirrors the innovativeness and interest of a person. High receptiveness mirrors that the individual is extremely inventive which isn't beneficial for them as they need to imaginative or reconsider each other thing which isn't conceivable. It characterizes the degree to which a man is creative or inventive and how he supposes distinctively when he is experiencing some extreme circumstances.

Conscientiousness: High Conscientiousness makes individual tenacious which isn't useful for the circumstance where they need to compelling choice. It demonstrates how a man is efficient and self-taught with a specific end goal to achieve their destinations viably. They are ideally

react to various circumstance in an organized way as opposed to responding suddenly.

Extraversion: High extraversion drives consideration seekers which creates awful picture on other individuals. It delineates the state of mind to look for recreation into others which brings about giving them adequate vitality, decisiveness, friendliness and so on.

Agreeableness: High rate of pleasantness makes the individual commanding and ends up troublesome for them to modify with others. This demonstrates the propensity of getting to be agreeable and humane among others which gives them higher upper hand over their opponents.

Neuroticism: It exhibits the content of obnoxious feeling which a man looked as far as outrage, tension, wretchedness and powerlessness so on.

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TASK 4

P7 Impact of background and past experiences on entrepreneur

Entrepreneur is the person who can create various new innovative ideas and they can also take huge risks in the market. But there are various factors which can hinder or foster entrepreneurship. For example if an individual belongs from strong financial background then they are mentally strong and powerful and thus they can easily solve all hurdles and problems in the industry. They have to work with passion and zeal.

Jeff Bezoz is working on international level. They are the founder of famous retail application that is Amazon. They had started their business by selling of various merchant books and by selling of various products. Jeff Bezoz family is every supportive and thus their family supports them a lot. This helps in motivating them and thus they can perform all activities properly and effectively (Shane, 2012).

Both the family and the personal background had supported Jeff Bezoz. From the beginning they want to start a new business and they had taken subject which is related to entrepreneurship in their graduation. Their family always motivate them so that they can start their new business. Due to this support their enthusiasm level increases and thus they can perform all tasks in effective manner. Thus they can easily start new business and they can earn more revenues. Due to both these factors they can easily become a successful and famous entrepreneur. Hence many people knows them as they are successful entrepreneur.

Decision making process of every entrepreneur is different from each other and various factors are there which affect this such as personality traits, education and life experience of an individual (Stokes, Wilson and Wilson, 2010). Personal traits of an individual such as self management coordination, motivation and communication all traits are developed from education, conditions and life experience of an individual. One of the example of this is Richard Branson who said that his risk taking ability is developed from his past experiences. Main quality of his is that he believe that every challenge of life is come up with an opportunity of learning which enhance knowledge and skills of an individual. All the education and life experience which he get is known as one of the main reason behind his positive behaviour. Risk is known as factors which is very essential to be a successful entrepreneur. Risk concept is the one that come up with the opportunity to learn something new.

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CONCLUSION

From the above discussion it clear that entrepreneur must come with idea which is effective for providing edge in competitive market. When there is some problem faced by people residing in society related to daily life then entrepreneur can come with ideas to resolve that issues. These days trend of entrepreneur is increasing as it helps to provide growth of economy of country. There are various types of typologies which help to achieve targets. This is effective for analysing market and take actions which are significant for business growth. Entrepreneur has qualities which makes them special as compared top other. This helps to analyse market and use techniques which is effective for market growth. There are possibilities to change policies which are significant for growth of business. Entrepreneur has to keep in mind demand of society and work accordingly so customer satisfaction and loyalty can be maintained. There are positive impact on social factors which helps to improve living of standard, GDP, etc. and reduces poverty from nation.

REFERENCES

  • Acs, Z. J., Autio, E. and Szerb, L., 2014. National systems of entrepreneurship: Measurement issues and policy implications. Research Policy. 43(3). pp.476-494.
  • Bhachu, P. ed., 2017. Immigration and entrepreneurship: culture, capital, and ethnic networks. Routledge.
  • Brandstätter, H., 2011. Personality aspects of entrepreneurship: A look at five meta-analyses. Personality and individual differences. 51(3). pp.222-230.
  • Dacin, P.A., Dacin, M.T. and Matear, M., 2010. Social entrepreneurship: Why we don't need a new theory and how we move forward from here. The academy of management perspectives. 24(3). pp.37-57.
  • Defourny, J. and Nyssens, M., 2010. Conceptions of social enterprise and social entrepreneurship in Europe and the United States: Convergences and divergences. Journal of social entrepreneurship. 1(1). pp.32-53.
  • Dennis Jr, W.J., 2011. Entrepreneurship, small business and public policy levers. Journal of Small Business Management.49(1). pp.92-106.
  • Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
  • Durst, S. and Runar Edvardsson, I., 2012. Knowledge management in SMEs: a literature review. Journal of Knowledge Management.16(6). pp.879-903.
  • Ebert, R.J and et. al., 2014. Business essentials. Pearson Education Canada.
  • Fayolle, A., 2013. Personal views on the future of entrepreneurship education. Entrepreneurship & Regional Development. 25(7-8). pp.692-701.
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  • George, G. and Bock, A. J., 2011. The business model in practice and its implications for entrepreneurship research. Entrepreneurship theory and practice. 35(1). pp.83-111.
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  • Schaper and et. al., 2014. Entrepreneurship and small business.
  • Schaper, M. ed., 2016. Making ecopreneurs: developing sustainable entrepreneurship. CRC Press.
  • Shane, S., 2012. Reflections on the 2010 AMR decade award: delivering on the promise of entrepreneurship as a field of research. Academy of Management Review. 37(1). pp.10-20.
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  • Storey, D. J. and Greene, F. J., 2010. Small business and entrepreneurship. Financial Times/Prentice Hall.
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