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Unit 3 Entrepreneurship & Small Business Management Y/508/0487 HND Business Level 4

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Introduction

Entrepreneurship is a process of starting new venture by taking risk with the help of yielding high profits. It refers to an activity where an individual is willing to operate and manage business by using their skills and resources so that enough profits can earn (Altman, Sabato and Wilson, 2010). Entrepreneurs are innovators and they have ability to determine opportunities from market and exploit them on time. They convert the resources with low productivity into higher one. This assignment covers different entrepreneurial ventures and its similarities and differences. Apart from this, report includes skills, traits and characteristics of successful entrepreneurs.

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PART 1

P1 Different types of entrepreneurial ventures and their relation to its typologies

Entrepreneurship concept:

Entrepreneurship is determined as a process of converting an idea into innovation that helps in growth and sustainability of venture. By successful conversion of idea into valuable goods and services, firm enables to yield high profits (What is Entrepreneurship?. 2018). By combining resources, capital, land and labour in business opportunities, high profits are earned by entrepreneurs. It completely depend on the ability and potential of individual to take risk, examine market and execute plan with the aim of delivering high quality products and services to target customers.

Different entrepreneurial ventures:

Small business entrepreneurship: These are small firms which are owned and managed by single individual. There is a single owner which handles the functioning of entire business. These are considered as small size firms as for starting it, high amount of capital as well as manpower is not required. These ventures are established with the aim of satisfying basic needs of people and earning enough profits. Main objectives behind operating these businesses is feed members of family rather than earning profits. Electricians, carpenters, consultants and grocery stores are some example of small business entrepreneurship.

Scalable start up entrepreneurship: These are skilled and creative entrepreneurs and have high ability & potential to change the world by their skills, competencies as well as innovative ideas (Audretsch and Link, 2012). They mainly emphasize on searching out repeatable and scalable business model. Once the found such structure or frame, their next step is to start focusing on getting attention venture capitalist. These individuals establish, develop and expand their business by their creative & innovative ideas.

Social entrepreneurship: These are the innovators that mainly focus on developing such goods which facilitates in resolving problems and needs of society. Main aim behind starting this venture is to enhance country's economic condition. Its existence is not only for the purpose to earn enough profits but to give their high contribution in welfare and development of society. These entrepreneurial ventures deals with several issues like poverty, health care and illiteracy (Barringer, 2012).

Serial entrepreneurship: These are individuals who come up with new ideas on continuous basis to establish a venture. They are somewhat different from other entrepreneur as others establish their business with own ideas and play significant role in managing routine operations of business. But in case of serial entrepreneurs, they come up their unique ideas, start a business and handover it to others after its successful running then again start a venture with different idea. These entrepreneurs are known by the name of founder of businesses.

Large scale entrepreneurship: It includes multinational firms which start up their businesses with high investment. Such organisations mainly focuses on creativity and innovation and operates with the major aim of yielding profits as well as working for social welfare. They are engaged in CSR activities and run their business ethically. For gaining high profitability and competitive edge in market, their main focus is to improve quality of products and satisfy needs of customers.

Entrepreneurship typologies:

Female entrepreneur: These are women entrepreneurs who start their business actively with innovation and creativity. Female participation in employment and equity of firm is the basis of female entrepreneurship. In this, organisation is successfully run and managed by females and have minimum 51% of stake in company (Baum, Frese and Baron, 2014).

Serial entrepreneur: These individuals continuously come up with innovative idea to start business. They take challenges, establish business properly, assigning responsibilities to perform operations and then move to another venture.

Male entrepreneur: Organisations are rely on ability and potential of men & an entire business is operated and managed by males only. Minimum 49% shares of company are hold by male entrepreneur.

P2 Similarities & differences between entrepreneurial ventures

There are several features associated with each business enterprise which differentiates it with others. Simultaneously, there are some similarities among them. Some differences and similarities are defined below:

Lifestyle venturers or business

Similarities

· These firms are operates with the aim of yielding high profits to enjoy luxury lifestyle (Bosma and Levie, 2010).

· For earning high profits and revenues, it is required to recruit skilled and competent manpower.

· These ventures are mainly emphasize on acquiring high market share and make proper use of resources so that targets and objectives can be achieved effectively and efficiently.

Serial entrepreneurs ventures

Similarities

· These ventures focus on acquiring good market position and yield high profits which allows them to get lavish lifestyle.

· Highly skilled and competent manpower is hired by these ventures so that objectives will accomplish.

· One of the major similarity is optimum utilization of funds and other resources as well as is customer centric.

Differences

· In these ventures, information is not communicated to financial capitalist regarding growing stage of firm.

· These businesses are started from own earnings & livelihood.

· Power is concentrated or centralized in few hands in such ventures.

Differences

· All the information regarding internal and external situation of company is communicated to financial investors on constant basis (Bruton, Ahlstrom and Li, 2010).

· These ventures are run for the purpose of earning profits only. Entrepreneurs just want to be rich, they do not care about their own and family members.

· There is decentralization of power.

Female entrepreneur business

Male entrepreneur business

Similarities

· Business is run for the purpose of earning high growth and acquire high market shares.

· Preferences and needs of consumers are taken into consideration by these ventures and products are made accordingly (Dacin, Dacin and Matear, 2010).

· To get high competitive edge in market is the main purpose of this venture.

Differences

· Female entrepreneur have less capability & confidence then males.

· In the process of decision making, females takes more time.

· Communication and team management skills of female entrepreneur is excellent.

Similarities

· Purpose of these ventures is also similar to female entrepreneurship as it also operates to yield high revenues & growth.

· Changing consumers needs are identified and alterations are made accordingly in goods and services.

· Gaining competitive edge in market is purpose of firm.

Differences

· Male entrepreneurs have high capability and confidence level than females.

· Quick decisions are taken by male entrepreneurs.

· They are less able to effectively communicate with others than female entrepreneurs.

Sizes of firms:

There are generally 3 types of enterprises which contributes in growth and development of economy (Defourn and Nyssens, 2010). These assists in generating high employment and maximizing inflow of cash in economy. Different types of firms are defined below:

Micro: These are small firm which is operated by single individual only with purpose to feed themselves and family. These firms requires less investment and their structure is flexible and simple as number of people involved in these firms are less.

Small: These ventures are operated either by single person or by partner and are run in local economy. There are only 10 to 12 individuals engaged in it for running operations. These firms are run with the purpose of yielding sufficient profits. They made products according to consumer's taste.

Medium: Annual sales of such firms are £ 25.9 million and around 250 members are working in these firms. Their main aim is to acquire good position in market and earn high profits. They emphasize on maximizing growth in minimum period of time.

Roles and characteristics of public, private and social enterprise:

Private firms: These are non government organisations and run by single individual or enterprise. Involvement of government is less in these firms and these businesses are run for purpose of earning high profits. These companies play major role in growth and development of economy (Delgado, Porter and Stern, 2010).

Public firms: These are the organisations run by government for the purpose of earning profits as well as welfare of society. They buy and sell shares for generating funds and running their business operations successfully.

Social firms: These are the firms which run by the help of volunteers. Main purpose behind running these organisations is welfare of society. These firms run only for well being of society and improving their living standard.

P3 Impact of micro and small business on economy

Micro and small businesses put huge impact on some areas of economy. These assist in growth and development of society (Harris and Patten, 2014). Below mentioned are the areas whose economy is impacted by micro and small businesses.

International and national level:

Small and micro businesses provides a platform to people to show their talent and skills at global level. They also administer training to them so that they get opportunity to enhance their skills and competencies. This will ultimately provides an opportunity to firm for providing their goods and services to other countries and improve inflow of foreign currency in country. Skilled manpower provides an competitive edge to firms (Impact of small-business in UK economy. 2018).

Regional level:

Economy of regional area is affected by small and medium firms as they get advantages of developing products and services according to the choice of customers. In such areas, firm first understand consumers tastes and preferences in order to offer them high quality goods and services. These helps in satisfying their needs in more better manner.

Local level:

At this level, small and medium firms provides employment to local people which assists in removing unemployment from the place. This ultimately contributes in improving economic condition of country.

P4 Significance of small businesses & start up's on growth of social economy

The contribution of small businesses and start ups in economic growth and development is high. In United Kingdom, there is very rapid growth of such businesses and provides benefits to economy (Neck and Greene, 2011). These firms contribute around 30% in growth of economy. By starting up new venture or from small businesses, around 50% of profits and revenues are generated in UK. Some significance of start up's and small businesses in development and growth of country are defined as follows:

Employment: These firms creates huge job opportunities for people of country. These businesses contributes in enhancing skills and potential of people which is beneficial for them in their personal as well as professional growth and development. These ventures are often known by the name of job creators as they render employment opportunities to domestic population of country or to the people who seek job. This will assist in increasing living standard of people as well as improving economic condition of country. Around 25 million of people are employed with start ups and small business enterprises.

Turnover: This defines as the sales turnover cycle of firm in whole year. In United Kingdom, sales turnover ratio is around 1.8 trillion and in it, small business contributes approximately 48%.

Exports: Today, it is very common to export goods and services in another country. The major reason behind doing exports is to increase flow of foreign currency in country and acquire large portion of market share. Around 408.9 billion of export is record in United Kingdom and nearly 15% of contribution is done in it by small and start up businesses (Schaper and et. al., 2014).

Growth: Employment situation of country put high impact on its economic growth and it can be estimated by numbers of employed and unemployed people. High job opportunities are administered by start ups as well as small businesses to domestic people of nation which is beneficial in their growth and success for long term.

Difference between Start-up's and small business

Small-business

Start-up's

· These businesses are established with the same concept or plan.

· As compared to start up, small businesses need more capital for performing their activities and operations.

· These businesses mainly administers traditional goods to their customers to satisfy them.

· These ventures are established by an innovative thought or idea.

· As it is a new business, capital requirement is less in comparison to small businesses for running its operations.

· Their business model is scalable and provides innovative goods and services to customers which are of high quality.

PART 2

P5 Traits, skills and characteristics of successful entrepreneurs

An entrepreneur is defined as a person who is able to start their own venture by using their knowledge, innovative skills, ideas and abilities. There is a high risk associated with starting a new venture and entrepreneurs are those individuals who have ability to take up risk with the hope of earning high profits (Storey, 2016). In order to make business more successful, they work with high determination and dedication. They have strong inner drive which motivates them to work for attainment of goals and objectives. The 2 successful people who have created history by using their creative and innovative skills and ideas are Jeff Bezoz and Bill gates. Several traits, skills and characteristics possess by them which brings them on the position of successful businessman are as follows:

Jeff Bezoz:

He is one of the well known entrepreneur who is CEO, chairman and founder of Amazon.com. Amazon is a most popular online shopping retailer of world which provides various products and services to customers. The business was established in year 1994 and initiates as online books merchant. After that, the expanded their business by offering range of products to customers (Unger and et. al., 2011). As use of internet is increasing day by day with rapid speed and it is a big opportunity that has been taken by Jeff. He left his job for developing their own business. By offering variety of products to customers, satisfy their needs in effective way. It is the major reason behind success of Amazon.com. Some characteristics, skills and traits possess by Jeff Bezoz are defined as follows:

Knack for innovation: Jeff is known from his childhood days for innovation and uniqueness. A sound alarm is created by him in his early days which guards his room. His passion and dedication brings his name in the list of world's richest person. Jeff, by his creative skills, expand his business. E-book and Kindle are the innovative products of Amazon which assist firm in gaining more popularity (Welter, 2011).

Hardcore realistic: It is an essential quality that should be possess in every successful entrepreneur & Bezoz have this. He thinks about all such issues and risks which may involved in business before establishing his own business. The fact of venture failure is accepted by him and examine all the factors and forces carefully which may leads Amazon towards downfall. By careful examination of all factors, Jeff is able to grow business in effective way by taking up high risk.

Risk taker: It is an ability that should be possess by all individuals in order to grow and sustain in competitive world. Jeff have this ability. For fulfilling his dreams and desires, he left his job. The risk related to human resource, finance, physical and technological resources are calculated by him carefully. One of the main thing is that, he is aware or well known from all those risks which may leads the firm towards failure but, his strong determination & beliefs did not let him down.

Bill Gates:

He is the founder of Microsoft Corporation and drop out from Harvard University. He sets an example of being successful entrepreneur in front of people. He is a successful person who believes in hard working and determination. He believes that if a person wants to attain something then they can (Wheelen and Hunger, 2011). The thing that matters the most is strong courage and determination of individual. Some traits possess by Bill Gates are defined below:

Philanthropist: Bill and Melinda Gates Foundation are founded by Gates and his wife. They both believe that it is always better to think for future in present. His wife became software architect and Gates took retirement. Before getting retired, he used to prepare future plans. Bill Gates is one of the big philanthropist and they always focus on improving education system of country.

Voracious reader: Reading assists in improving communication and skills of person and the same is believed by Bill Gates. He prefer to read books more and thinks that by reading these, he can improve his knowledge and communication skills. This will assist him in getting knowledge about diverse areas which helps in his personal growth directly or indirectly.

Know to prioritize things: It is necessary for people to priorities things in proper way so that objectives can be attain in systematic manner. It is a habit which determines failure & success of an individual. Gates very well know how to prioritize things in proper manner which is the major reason of his success (Zott, Amit and Massa, 2011).

P6 The way in which entrepreneurial personality aspect reflects motivation and mind set

Entrepreneur can be described as personality who start their business with Zero and conduct the business procedures in such way that help in make their business more profitable. Every individual posses different types of quality and features which they use in their business so they can manufacture such products that satisfy the needs of customers. Their are different factors and components which affect the personality of entrepreneur are stated below:-

  • Openness to experiences:- Every individual posses such special talent which they used in their business. Further it define the criteria through which individual is creative and innovative. Theses capability help them in dealing with all types of uncertainty. Imaginative power of individual help them to use in market place for gaining competitive advantage over rivalry.
  • Conscientiousness:- This quality of individual allow them to developed in effective manner that help them in accomplishing the organisational objectives. Rather then react on random basis the individual need to tackle all the situation in calm and proper manner.
  • Extroversion:- This deals with the tendency and nature of individual to value stimulation and achievement (Unger and et. al., 2011). These type of personality are very strong predictor that contribute in the success of organisation. Although they are attention seeker which is not good for brand image of company.
  • Agreeableness:- these type of individual are very cooperative and coordinate with every business activity of company. This will help them in establishing long term relationship with workforce and reduce all conflicts arises in business.
  • Neuroticism:- It is an skill that allow individual to deal with all the circumstances related to emotions, feelings and depression. Further they help in reducing the stress of person who suffer from critical situations.

P7 How background and experience can foster entrepreneurship

Entrepreneur are those effective personality that help in growing up the business by using their innovative skills and talent in their products and services (Storey, 2016). They are risk taker individuals who invest in many sector in order to gain higher returns instead of getting fear of loss and there are different elements which consider by entrepreneur in external environment so they grab all the opportunities and remove all the threats coming in market. fulfil his dreams if he have courage and potential to do it. The background of an individual assists in fostering entrepreneurship in an individual. If the background of an individual is positive then it fosters the activity of entrepreneurship in proper and accurate manner , if it is negative then it can not foster entrepreneurship among individuals.

Adopt all the changes coming in external environment and make modification in their organisation structure which allow them to improve quality standards of goods and services. Further, it help in establishing better image in the market and proper conducting in business operation help them in accomplishing the goals and objectives of business (Wilson, 2015). Although the journey of individual is not simple they have to face many difficulties and complexities which can sort out by their rational thinking.

Conclusion

As per the above mentioned report, it has been concluded that entrepreneurship is identified as a procedure in which an individual set up its own business by taking high risk in the hope of yielding high profits. Various skills and attributes of an entrepreneur defines his success. They creates new ventures by implementing their innovative ideas and convert them into goods and services that assists them in serving and satisfying customers in more better way. Different types of entrepreneurial ventures contributes in economic development of country.

References

  • Altman, E.I., Sabato, G. and Wilson, N., 2010. The value of non-financial information in small and medium-sized enterprise risk management. The Journal of Credit Risk. 6(2). p.95.
  • Audretsch, D.B. and Link, A.N., 2012. Valuing an entrepreneurial enterprise. Small Business Economics. 38(2). pp.139-145.
  • Barringer, B., 2012. Entrepreneurship: Successfully Launching New Ventures, (2012).
  • Baum, J. R., Frese, M. and Baron, R. A. Eds., 2014. The psychology of entrepreneurship. Psychology Press.
  • Bosma, N. S. and Levie, J., 2010. Global Entrepreneurship Monitor 2009 Executive Report.
  • Bruton, G. D., Ahlstrom, D. and Li, H. L., 2010. Institutional theory and entrepreneurship: where are we now and where do we need to move in the future?. Entrepreneurship theory and practice. 34(3). pp.421-440.
  • 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.
  • Delgado, M., Porter, M. E. and Stern, S., 2010. Clusters and entrepreneurship. Journal of economic geography. 10(4). pp.495-518.
  • Harris, M. and P. Patten, K., 2014. Mobile device security considerations for small-and medium-sized enterprise business mobility. Information Management & Computer Security. 22(1). pp.97-114.
  • Neck, H. M. and Greene, P. G., 2011. Entrepreneurship education: known worlds and new frontiers. Journal of Small Business Management. 49(1). pp.55-70.
  • Schaper, M. T. and et. al., 2014.Entrepreneurship and small business.
  • Storey, D. J., 2016. Understanding the small business sector. Routledge.
  • Unger, J. M. and et. al., 2011. Human capital and entrepreneurial success: A meta-analytical review. Journal of business venturing. 26(3). pp.341-358.
  • Welter, F., 2011. Contextualizing entrepreneurship—conceptual challenges and ways forward. Entrepreneurship theory and Practice. 35(1). pp.165-184.
  • Wheelen, T. L. and Hunger, J. D., 2011. Concepts in strategic management and business policy. Pearson Education India.
  • Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future research. Journal of management. 37(4). pp.1019-1042.
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