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Ventures and their Relation with the Typology of Entrepreneurs

Answer :

INTRODUCTION

The term “Entrepreneurship” can be described as designing, launching, organizing, or creating a new business which can often be initiated as a small business. Small business owners manage all the aspects of their company. Management is basically the alignment and coordination of various activities running in an organisation. Entrepreneurship and Small Business Management helps in building entrepreneurial skills' step by step. Every business whether large or small requires entrepreneurial skills to survive in the competitive world. Entrepreneurship and small business management help entrepreneurs to gain experience and learn unique skills which can help them to develop a new business(Scarborough, 2016). The report will outline different types of entrepreneurship ventures and their relation to the typology of entrepreneurship. Also, it will focus on the impact of micro and small businesses on economy.

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MAIN BODY

1. Different types of entrepreneurship ventures and their relation with the typology of entrepreneurs

Types of entrepreneurship ventures:

Micro Enterprise: Micro Enterprise is that enterprise where the investment done by the entrepreneur is below 25 lac. The micro enterprises have fewer employees and also they have less revenue in comparison to regular sized business. The owners of this type of enterprise can have employees up to 7. This type of local businesses like grocery store, plumber, electricians etc. are also better for local economy. Most of the micro enterprisers owner are sole proprietors. They have full control over their business.

Small Enterprise: Small Enterprises are those enterprises where the investment done by the entrepreneurs lie between 25 lac to 5 crore. The small enterprises owners can have employees up to 15 - 49. Social enterprise owners also have some social responsibility towards the environment. Often this is seen that they are not fully engage in maintaining social responsibility. The reason can be because of the size of business or engaged in the day to day activities of their company (Schaper and et.al, 2014). The major challenge for these type of enterprise is finding new customers and reaching new type of markets. They also maintain a close relationship with their customer. The major cause of failure for small business can be low sales and no keen knowledge of the environment

Medium Enterprise: Medium Enterprises are those enterprises where the investment done by entrepreneurs lie between 5 crores to 10 crores. These type of enterprises can have employees up to 50 to 249. The investment in plant and machinery is very high in comparison to small and micro enterprises. The entrepreneurs also have huge responsibility towards environment and the people. The risk of loss is also very high for the entrepreneurs who are running these enterprises.

Small Business Entrepreneurship: Small business entrepreneurship includes businesses like opening of grocery store, cloth store, hair and beauty salons, carpenters, plumbers, electricians, etc. who run their own businesses and have full control over business and are in fully of charge of these businesses. Main aim behind small business venture is to earn a basic earning which can help the entrepreneurs to feed their family and earn a reasonable amount of profit. The funding in this type of business is done via friends or family.

Scalable Start-Up Entrepreneurship: Scalable Start-Up is totally different from Small Business Entrepreneurship. The entrepreneurs here set a vision which could change the world. Investment in these types of start-ups is done by venture capitalist. The best start-up is funded by venture capitalist (Burns, and Dewhurst, eds., 2016). They search for repeatable and scalable business model.

Large Company Entrepreneurship: Large Companies grow through innovations, creativity and offering new products. They have keen knowledge of customer tastes and preferences, new technology, new legislations, etc. The innovative products discovered by the large companies can be difficult to execute. Large Companies size and culture makes difficult to execute the innovation.

Social Entrepreneurship: In this type of entrepreneurship, the entrepreneur focuses on creating those products which fulfil the social needs of the people. The goal is to make world a better place, profit maximization or wealth share is not the motive of these types of entrepreneurship.

2. Similarities and differences between entrepreneurial ventures

Basis

Small Business

Scalable Start-Up

Large Company

Social Entrepreneurship

Financial Goals

The main aim of small business is to earn a living from which they can feed their family members, and earn reasonable amount of profit. The funding in these business is done by friends and relatives.

The scalable start up is done by the entrepreneurs to earn a huge amount of profit by producing innovative products or ideas. The funding in these types of start up is done by venture capitalist.

Large companies want to earn a high profit by selling new products in existing market or by selling new products in new market range.

These business focuses on creating social value in the market by creating those products which can fulfil social needs of people. Creating wealth is not a main aim of these type of enterprises

Risk Factor

Risk is involved in every type of business whether it is small or big. The small businesses are also bounded with risk factors like theft, employee dispute, poor customer service, threat of substitutes and competitors etc.

The start-ups are always bounded by various type of risk like design risk, development risk, funding risk, economic risk, legislative and policy risk, maintenance risk, management risk, operation risk etc.

The risk faced by large businesses can be strategic risk, compliance risk, operational risk. The companies' reputation can be ruined if they can't overcome these risks.

The social entrepreneur also faces risks which includes hindering of human rights, hazardous working conditions, dispute related to land, polluting environment, following corruptive policies, breaking laws etc.

Rewards

Rewards are also important for small business to retain employees and to motivate them. The rewards given by small business can be both in monetary and non-monetary terms.

The rewards given in the start-ups can be chilling work culture, flexibility, break hours during work. All these can make the employees stay with the organisation.

Large companies also provides various benefits to their employees in terms of rewards like training of employees, recognition in front of peers, cash prize or gifts, vip meet and greet, warm welcome of employees, holiday with family, free dine in luxurious hotel etc. These benefits make employees more productive

The social entrepreneurs also give rewards to their employees on their awesome contribution in office. These rewards can be a gift or cash prize or appreciation in front of all the peers, thank-you note etc

Marketing Communication

The small business communicate in the market by grabbing the attention of customers, imparting information which the consumer require or they also use online portal to communicate.

The main mode of communication for the start-up is their products. By producing innovative and creative products they can grab the attention of the people.

Large businesses communicate with the people through advertisement on television, radio or even by using print media like magazines, newspaper, journals etc.

The social entrepreneurs can communicate with the people by showing their impact in work, involving the general people in their transaction, aligning the cause with consumer, by delivering a stellar product.

3. Impact of Micro and Small Businesses on economy

Small and Micro enterprises are currently on boom in United Kingdom. There have been a number of start-ups in the year 2013-2014. The economic climate in UK is in favour of these enterprises(Matchaba-Hove, Farrington, and Sharp, 2015). 99% of Britain business can be classified as small or micro.

Turnover- The small and micro industries have a combine turnover of 1.6 trillion in united kingdom. This turnover consists of 47% of overall turnover of private sector industries.

Employment- The major employment in United Kingdom is done by small and micro enterprises. The small enterprises employees 24.3 million people in UK which comprises for 60% of all private sector employment and 81% of workforce. Small businesses are engine of growth which provides huge employment opportunities

Growth- The most rising enterprises in UK are small and micro enterprises which are on boom in the country. The growth of these industries are because of many factors like innovation is the main key to the growth of these industries, producing creative products and always bringing something new to the market. Reports say that 37% of small and micro enterprises are engaged in innovative activities(Scarborough, 2016). Small and micro enterprises are giving tough competition to other existing industries. There was a 47% increase in small scale industries between year 2008-2013 which also led to recovery of UK's economy after recension in the year 2007. Small industries have a great role in lifting UK after recession. The entrepreneurial spirit is very high in united kingdom.

Industry- The retail, manufacturing, service and the small industries are the largest industries which are running in United Kingdom and these industries are heart of UK 's economy. 47% of small industries' revenue come from engaging in activities related to manufacturing, retail or service. Also, 3 out of 20 every small enterprise are engaged in these activities(Goss, 2015). So it is quiet clear that how essential these industries are for UK's economy. These industries have a mutually beneficial and symbiotic relationship with country's overall economy. This time in Britain is best for opening any small scale industry or having a start-up. The contribution of these industries is vital for countries economic health and also play an important part in countries well being. These industries also give individual financial independence, encourage innovation and creates employment. These businesses also involve low amount of risk as the investment in plant and machinery is low in comparison to large firms.

4. Importance of Small Businesses and Business Start-up in contribution to growth of social economy after Brexit

The economy of UK has faced a critical juncture. Leaving EU has many economic challenges for UK which has resulted in widespread policy change. The economy of UK is growing but it largely accounts for increase in employment rather than productivity. The UK workers are currently 30% less productive than their counterpart USA workers. However, the growth of Small and Micro enterprises has affected the growth of UK's economy and has a leading charge over it at the consumer level. The people running these small industries consists of sole proprietors who are offering retail services, which has increased the number of Self employed person in UK(Solomon, and Linton, 2016). The services by the self employed person are also provided online. These people work on quality rather than quantity, so the quality of the products are improves in the country. The small and micro enterprises are the only enterprises who has fulfilled the evolving demands of the people after the departure from EU. The country is focusing more on the development of localised economy which can create a more stable economic structure(Laukkanen, and Tornikoski, 2018). Small and micro industries reacts very quick to change, they have adopted the changes very easily in comparison to large scale industries as there structure is so rigid which cannot be changed more often. The large scale industries is unable to keep a pace with consumer habits.

Small scale businesses are flexible and stable which has allowed them to retain potential consumers. The use of social media has also helped small enterprises to advertise their product and communicate with consumers more easily. As per report 80 new companies are formed each hour in UK, which has created a hug employment opportunity for people. These industries are also more sustainable to shocks as they have a lower field of operation. The small businesses are the lifeblood of the UK economy. The small and micro industries are following many strategies for the success in the country, which are applying new technology, agility, accelerated innovation, attracting and retaining talent. The small industries are using new technology to drive sales and improve efficiency of the business. They're also using online platforms, virtual networks and products which attracts consumer to increase their sale. These factors have contributed to the growth of small industries in the country. SME's are providing innovative products by recruiting high calibre innovators or by using a new software design or by creating a team who is responsible for driving innovation(Dees, 2017). Theses industries are also attracting or retaining talents by providing them with many monetary or non monetary benefits, flexible work arrangements, good working condition, supportive seniors, attractive stock options, good salaries, and many other incentives. These industries are also following the criteria of being open to any type of investment and are free to open to the new markets. These industries try to recruit new and skilled workers who are perfect in their work. The open trade by these industries have benefited the consumers for low prices and by increasing the variety of goods and services.

5. Characteristic traits and skills of entrepreneurs which differentiate them from managers

Characteristics of entrepreneurs-

Expert Idea Generator: Entrepreneurs generate innovative and creative ideas. They create products which are innovative in nature. They are highly intelligent and also works as problem solver for the enterprise. They generate those ideas which results in the growth of the business. They have the ability to convert something boring into creative and innovative which attracts the consumer, however managers do not generate any ideas ,they are fully engaged in completing their task

Personal Achiever: Entrepreneur wants to achieve everything, he is self-motivated and dedicated. He sees failure as an opportunity to learn something new and failure can't stop him to earn whatever he wants to achieve. He is a self-driven person. They prefer a situation in which they can control and handle a situation on their own(Drucker, 2014). The Personal achiever consist of various characteristics such as, always asks for feedback Self-motivated, knowledge of environment, Honest, decision making skill, in contrast to this manager only perform that task which they are asked to do.

Risk Taker: Entrepreneurs wants to achieve their goals for this they are willing to take any amount of risk, they are risk takers. They are not immune to fear while managers are this person who have no potential to take risk, they have a confirmed job which do not includes risk.

Vision: Entrepreneurs look for opportunity everywhere. They always work on developing new and innovative ideas, and that are the qualities which make them different form others. They are always attracted and inspired by things or ideas which are yet to be discovered, they have the vision in their eyes which no one else can see while managers are the person who tend to work on companies vision, they don't have a vision of their own.

Passion and Motivation: The entrepreneurs are very passionate for achieving their goals. These people are self motivated, they do all their task with full energy and enthusiastically(Fayolle, and Gailly, 2015). They question themselves on frequent basis like is there something that they want to achieve, something which can keep them awake, in contrast managers perform in a way asked by his senior, they are not as passionate and motivated like entrepreneurs.

Optimistic: Entrepreneur are optimistic in nature. They see failure as a ladder which would lead them to success. They see positivity in every task they perform, however managers may or may not be optimistic.

Good Communication: The entrepreneurs have a very good communication skill as communication acts as a key of success for them. The entrepreneurs are also very keen listener, they try to understand their consumer by listing to their demands.

Focus: The entrepreneurs have vision in their eyes and they try to focus on that vision so that they can achieve it(Storey, 2017). They do not loose focus while achieving the vision, in contrast managers are not that much focused like entrepreneurs, as they work on companies vision and not of their own.

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6. Influence of experience and background which can hinder or foster entrepreneurship

The background and experience of entrepreneurs are essential to understand to know how they can hinder or foster entrepreneurship. For example the famous entrepreneur Peter Jones who is a well known business tycoon, recently appeared in BBC2 television series “Dragon Den”. Peter has interest in various fields like television, mobile phones, travel and real estate. He has a belief in “paying it forward” to some degree as he recently asked former UK prime minister gordon brown to create an academy in London for upcoming entrepreneurs or the students who wants to pursue entrepreneurship(Mugler, 2017). Jones has a total net worth of $367 million. Simon Cowell who is well known for his brutal honesty in the show “American idol”. He has worked as a music executive and television producer. He started his career by working in the mail room of EMI music publishing company in which his father held an executive position . Cowell is now the owner of a record company known as syco with its sister concern syco tv. He has net worth of $400 million. Dunncan Bannatyne started his business with only $730 by selling ice cream on a second hand van. Bannatyne then entered into the bed and breakfast and nursing home industry and later he successfully developed 30 such more properties and then sold them for $42 million. (Anna, Norat and Anna, 2018) Dunncan invested the money in fitness club arena and purchased 80% stake in just learning child care franchise and sold it after making $36 million. Now dunncan owns an empire of 40 spas and over 60 health clubs with many hotels and bars. Dunncan is also a philanthropist operating the banatyne charitable trust supporting 25 charities. JK Rowling is also the best example for how her experience has foster entrepreneurship. Rowling is the author of most popular harry potter series having a net worth of $1 billion. First author in history who has earned $1 billion and is one of the wealthiest private citizen in united kingdom. Harry potter series was later also casted in movies. Alan Sugar is also known as lord sugar or baron sugar. Sugar was the founder of popular computer brand known as Amstrad which sugar sold to BskyB for $187 million in July 2007. Sugar owns a number of business interest which includes digital signage company, property investment company and an executive aviation company. Sugar recently has a status of TV star due to his role on the BBC reality series “ The apprentice”, broadcast annually since 2005, based on US television show same name starring donald trumph. Alan currently has a net worth of $1.4 billion Sugar was declared as billionaire in year 2015. Sugar has been declared as 95thrichest person in UK.

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CONCLUSION

The report summarizes Entrepreneurship and small business management which includes different type of entrepreneurship venture like micro, small and medium enterprise. Also, it further covers typology which includes small business, scalable start-up, large company and social entrepreneurship. The report further cover similarities and differences between various entrepreneurial ventures on the basis of points like financial goals, risk, rewards and marketing communication. Besides it the report also shows statistical data of impact of micro and small industry on economy(Piperopoulos, and Dimov, 2015). Moreover, it also highlights the contribution of small industries to the growth of economy of country after Brexit. It also shows the entrepreneurial skills which are different from managers, and further it shows how experience can foster the entrepreneurship.

REFERENCES

  • Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan International Higher Education.
  • Dees, J.G., 2017. 1 The Meaning of Social Entrepreneurship. In Case Studies in Social Entrepreneurship and Sustainability.(pp. 34-42). Routledge.
  • Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
  • Fayolle, A. and Gailly, B., 2015. The impact of entrepreneurship education on entrepreneurial attitudes and intention: Hysteresis and persistence. Journal of Small Business Management. 53(1), pp.75-93.
  • Goss, D., 2015. Small Business and Society (Routledge Revivals). Routledge.
  • Laukkanen, M. and Tornikoski, E.T., 2018. Causal mapping small business advisors’ belief systems: a case of entrepreneurship policy research. International Journal of Entrepreneurial Behavior & Research.24(2), pp.499-520.
  • Mahadea, D. and Kaseeram, I., 2018. Impact of unemployment and income on entrepreneurship in post-apartheid South Africa: 1994–2015. The Southern African Journal of Entrepreneurship and Small Business Management. 10(1), pp.1-9.
  • Matchaba-Hove, T., Farrington, S. and Sharp, G., 2015. The entrepreneurial orientation-Performance relationship: A South African small business perspective. The Southern African Journal of Entrepreneurship and Small Business Management.7(1), pp.36-68.
  • Mugler, J., 2017. The climate for entrepreneurship in European countries in transition. The blackwell handbook of entrepreneurship. pp.150-17.
  • Piperopoulos, P. and Dimov, D., 2015. Burst bubbles or build steam? Entrepreneurship education, entrepreneurial self‐efficacy, and entrepreneurial intentions. Journal of Small Business Management. 53(4), pp.970-985.
  • Scarborough, N.M., 2016. Essentials of entrepreneurship and small business management. Pearson.
  • Schaper, M.T. and et.al, 2014. Entrepreneurship and small business.
  • Solomon, G.T. and Linton, J.D., 2016. Standing at the crossroad of knowledge: Technology, innovation, entrepreneurship and the small business management–Policy perspectives. Technovation.(57-58), pp.1-3.
  • Storey, D., 2017. Six steps to heaven: Evaluating the impact of public policies to support small businesses in developed economies. The Blackwell handbook of entrepreneurship. pp.176-193.
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