Entrepreneurship is analysed as capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit. Small business enterprise is regarded as organization that employs a few workers and does not have a high volume of sales. In UK, 99% of private sector enterprise comes under category of SME which are established by entrepreneur with new ideas and innovation for purpose of maximizing profitability. In this report, different kinds of entrepreneurial ventures that operates in economy are discussed along with typology of entrepreneurship. Relevant data and statistics have been discussed to determine influence of micro and small business on the economy. In addition, importance of small business and start-ups towards the growth and development of social economy is also determined with relevant examples.
Entrepreneurs are considered as key drivers that carry out economy towards growth and development by introducing new business and ventures. In this study, traits and skills of Jack Cohen and other successful entrepreneur have been defined which differentiate them from other managers. At last, study will determine how the background and experience can hinder and foster entrepreneurship.
P1 Different kinds of Entrepreneurial ventures and typology of entrepreneurship
Entrepreneurship is both the study of the ways through which new businesses are created and actual process of introducing a new venture. An entrepreneur is a person who has an idea and who works in order to create a product or service that people will buy, by building an organization to support those sales. Although the importance of entrepreneurship and interest in it is continuously increasing and growing, High growth ventures provide us with significant amount of jobs and wealth creation in UK. One more important term in entrepreneurship is that “not all entrepreneurship is the same”. There are many types and kinds of entrepreneurial ventures in the economy, some of them are as follows:
- Small Business Entrepreneurship: In this mainly two types of businesses exist; small businesses and lifestyle business. Small business include grocery stores, hairdressers, consultants, travel agents, internet commerce store fronts, etc. An independently owned business which is not dominant in this field are termed as small businesses. Main goal of these type of businesses is to grow into a long term business that is profitable and sustainable. Capital to these businesses is provided by micro loans, bank loans (Stam and van Stel., 2011). And in lifestyle type of business that includes micro enterprises and free lancers. It can be defined as a business where to maximise profit by combining founder's skills and strengths is the primary motivator.
- Scalable Start-up Entrepreneurship : In this there are two types of businesses; scalable start-up and second stage company also known as Gazelles. Scalable start-up can be defined as the businesses which includes innovation focused firms with the potential to create new a market or can change existing one. Goal of these type businesses is to generate wealth for founders and investors through an IPO or acquisition. On the other hand second stage companies can be defined as the businesses independently owned and operated for profit enterprise that has the potential to dominate in its field. Goal is to maintain strategic growth through diversification and expansion and to find new markets for sustainable growth in the economy.
- Social Entrepreneurship : These types of businesses includes a company working to solve global health issues. This type of ventures can be defined as business built through innovations and solutions and desires to make world a better place for living (Entrepreneurial Ventures, 2018). Their main emphasis is of maximising impact in suitable way.
On the basis of model Wennekers and Thurik (1999) differentiate all these entrepreneurial ventures' comes under following three different typology,
- Entrepreneurial: In this type it usually includes, the owners and directors of independent organizations which have
- profit and growth as their main goal, they pursue and exploit opportunities. They operate within the small business sector. It includes, Small Business and Scalable Start-up Entrepreneurship.
- Intrapreneurs: Employees in companies
- . This usually includes Social Entrepreneurship in it.
- Managerial: Managerial business owners. This usually includes Large Company Entrepreneurship in it.
P2 Similarities and Differences between Entrepreneurial ventures
According to Blank (2010) there are four different types of entrepreneurial ventures, i.e., Small Business, Scalable Start-up, Large Company and Social Entrepreneurship. Their similarity and differences is explained below:
- Scalable Start-up Entrepreneurship: In this type of venture there is a high growth in the business as compared to the other entrepreneurial ventures. It is generally run by young people as they are more enthusiastic in nature and are ready to take risk in business. Company is built to scale with the goal of generating significant wealth for founder and investor. Start-ups have the potential to create significant revenue, jobs and economic impact (Aulet and Murray, 2013). These are basically come up with new and innovative ideas which is totally different from the rest of the types of entrepreneurial ventures. Businesses which can come under this venture can include, some small food shop, some kind of business, etc. Funds providers of these start up depends upon different small and medium business.
- Small Business Entrepreneurship: Small businesses are an independently owned and operated business which can be run by single or group of people in order to make profit. Capital providers for this business are bank loans, personal findings, etc. Small businesses entrepreneurship can includes retail shops, restaurants, etc. to earn a good revenue from the business. The main aim of these business is to grow their business more in the respective industry which is totally different from the other entrepreneurial ventures. The main objective of this is to generate a payroll taxes and jobs for the unemployed people in United Kingdom.
- Large Company Entrepreneurship: These are basically established businesses in the market which are running their industries for so many years. They have relatively high number of employees working with them which is generally high as compared to all three entrepreneurial ventures. Their goal is to earn a good revenue so that they can invest that money in their business in order to increase it (Szirmai, Naudé and Goedhuys, 2011). The capital providers of these large businesses are generally their own revenue, their tax credits and subsidiaries. Businesses which are included in this are corporate business. They have a well maintained reputation they are operating on large scale.
- Social Entrepreneurship: These are basically built to give innovative ideas which can help to make the world a better place. The main of these is to maximize the effect of sustainability in United Kingdom. The capital provider of these ventures depends upon their business size. The kind of businesses which are operated in social entrepreneurship includes health businesses, they are also working in the education sectors as well. Their main aim is to uplift the standards of living which is totally different from the other entrepreneurial ventures that exist. These are basically operated by socialist workers.
Apart from this, there are other similarities as well. All these entrepreneurial ventures focuses on developing or generating a good overall revenue which they cam use in their business activities to enhance the performance of their organization. Creation of distinct identity at marketplace is also recognized as the main objectives of all kind of entrepreneurship firms or ventures. The main purpose from the business of all these ventures is to grow their organization and to contribute in the economic growth as well.
In entrepreneurship business there are various types of ventures available, for example, Small Business, Scalable Start-up, Large Company and Social Entrepreneurship which performs different functions according to their enterprise. They play an important role for the growth in countries economy.
There is huge scope development and growth of entrepreneurial ventures as they contribute in the economic growth of the country which helps to give a positive impact on their business. These can help in giving employment to people as well.
P3 Relevant data and statistics to determine impact of micro and small business on economy
Small and micro business have a huge impact on the economic growth of the country. They are considered as a focal point in shaping enterprise policy. Small businesses are the backbone of the UK economy. There are three primary ways that small businesses contribute to our nation. They give people the opportunity to achieve financial independence, encourage innovation, and create employment opportunities. Due to Brexit these micro and small business has a huge impact on them. The overwhelming weight of evidence predicts Brexit-induced uncertainty will have a significant negative effect on the United Kingdom economy. In the United Kingdom, there are some 5.7 M Small and micro Enterprises, which account for over 99% of private sector firms and 60% of total United Kingdom private sector employment. These businesses also account for 73% of all net private sector job creation in the United Kingdom (Brexit’s impact on small businesses: the experts may be spot on after all, 2018). Therefore, how these Enterprises respond to the uncertainty arising from Brexit has significant implications for the economy.
Small businesses are the United Kingdom's greatest advantage and they contribute in economy in various ways. United Kingdom's current economy is very favourable for the start up businesses in sustaining a healthy economy. Small and micro Enterprises are a large and integral part of the United Kingdom’s economy, with over 99% of all of businesses are classified as small or medium (Desai, 2011). They are also important for the exponential growth of the country as well as its contributes in giving employment to the people who are not getting jobs due to any reason. So it is very crucial to have these small and medium businesses to improve the economy of United Kingdom.
These small and micro businesses can help the country to increase their overall performance as it helps in giving employment with the help of which it will increase the employment rate as well that has a direct impact on the economic growth. These businesses also helps in bringing innovation and creativity as well which also has a huge impact on the country.
P4 Importance of small businesses and businesses start-ups to the growth of social economy
An entire segment of the economy is composed of entities that aim to increase social inclusion and reduce inequalities, while simultaneously creating economic value. Social economy organisations, such as different types of cooperatives, associations, foundations, mutuals and social enterprises are developing at a fast pace around the world. Fostering their development requires an enabling ecosystem comprised of a conducive legal and regulatory framework, tailored financial tools and access to markets (Ratten, 2011). Building this enabling ecosystem requires raising awareness of the social and environmental impacts of social enterprises, and building the capacity of public authorities, social enterprises and impact investors to collaborate in a mutually beneficial way. The impact that the small business sector has on the economy is well known and has been extensively studied.
There is a huge importance of small businesses and businesses start-ups to the growth of social economy as they help the economy of the country to grow exponentially. Small businesses are vital to the success of the economy. Not only as they provide the success stories of the future, but also because they meet local needs. Most UK businesses today are small. Two thirds are owned and run by one person. Small businesses present new employment opportunities for the people and encourages them to start their own start up as well (Lesakova, 2012). There are various advantages of small business and start ups which they contribute in the improvement of social economy such as, by bringing growth and innovation to the community in which the business is established. Small businesses also help stimulate economic growth by providing employment opportunities to people who may not be employable by larger corporations. Small businesses tend to attract talent who invent new products or implement new solutions for existing ideas.
There is also a huge scope of future as well in small businesses and start ups. Same as start ups, they also contribute in increasing the economic growth as it gives chance to young entrepreneur to start their own business and can earn a money and improve their life standards as well.
There is huge difference which a small, medium and large businesses make to the economy as they contribute a lot in it. For example they help in providing employment to people who are seeking for job. They also help the government also for example in social entrepreneurship they help them by improving the society.
Small businesses have played a critical role in the development and growth of economy. They also help in maintaining the sustainability in economic growth as well which is a very aspect for the country (Desai, 2011).
P5 Characteristic and skills of Jack Cohen or other entrepreneurs and how they differentiate from the other managers.
Sir Jack Cohen 1898-1979 was an English grocer who founded the Tesco supermarkets chain, born in London and brought up in Whitechapel. He belonged to a Jewish family as his father was Avroam Kohen who was a polish immigrant from Lodz and mother was Sime Zaremba. He was named Jacob Edward Cohen, but was commonly known as Jack from an early age of his life. Jack was different and was able to think differently as compared to other entrepreneurs in the market at that time. This quality of him had leaded him to great businessman of era (Matthews, Stowe and Jenkins, 2011). After completing his studies Cohen started to help his father in their tailoring business. Cohen was very much interested to be a grocer and wanted to start a grocery shop from starting only. Jack was very much close to kids and would love to spend his maximum time with them as he was humble and soft hearted especially for children. As Cohen belonged to a tailoring business family he was very creative and innovative in thinking. And because of this skill he volunteered for Royal Flying Corps where Cohen used to make canvas for balloons and other aircraft.
Another skill of Jack that was highlighted in early stage of his life was, he knew how to work out anything in easier and simpler way and Cohen was hardworking, dedicated and focused towards his business. There was a time when he and his wife worked for 7 days in a week at his grocery store (Ratten, 2011). Cohen has another special quality which differ him from other business managers, was that he had a great belief on humanism and was able to trust anyone very quickly. As other grocery stores where not running by members of family, thus non family members where running the stores. This concept of him brought a great revolution of self service at grocery stores in the present as well as future era. This quality of him also highlighted his another characteristic i.e. courage and great market experience, which is not found in many of the other business entrepreneurs.
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Cohen had ability to get people into a new market or centre because of his positive vibes public get convinced very easily from which developers became keen to help him with start-up cost of other shops. Cohen was different from other business entrepreneurs in each and every aspect of decision making, thinking, working, belief, techniques for surviving in the market, unique and innovative style of business start-ups, etc. These all qualities of Cohen lead him to the greatest business managers of the era. Cohen was full of energy; an extrovert. He had the ability to convince anyone because of his good nature, cooperation with others, and trust, as well as he was achievement oriented, effective and efficient in doing work, and was emotionally stable by being positive. These all points made Cohen look different from other business managers.
P6 Entrepreneurial personality of Jack Cohen or another entrepreneur and reflection on their entrepreneurial motivation and mindset
Jack Cohen had a simple mind set for entrepreneurship. According to him, entrepreneur is an actor who has an art to carry out innovations, characterized as a source of raw material, trendy production method, product, market of new ideas, etc. Cohen says an entrepreneur is the one who has ability to carry out innovation for company and will change in the changing business environment, which he contrasts with passive adaptive behaviour. With this clear mind set and through the power of self-motivation and self-confidence, Cohen was able to carry out new business ideas with collaborators and workers or employees (Dacin, Dacin and Matear, 2010). However, Cohen put emphasis on businesses as institutions that tend to implement new ideas as Cohen did by setting up stores without doors promoting the trend of self-service grocery stores. The main motivational factor that come out from Cohen's life story is "Autonomy". According to him profit is not a prime motivation to success for any entrepreneur, thus having an idea and realizing is the main motive behind.
For other entrepreneurs making money was the main potential and motivational element but for Cohen it was just a factor of any business enterprise. He gave importance to realization of new ideas instead of profit making. In this, main motivation is the creative phase of implementing new ideas, in which there is a certain degree of autonomy of importance. Cohen said profit is nevertheless a necessity in order to implement idea successfully. Anyone can have an idea but only a certain number of persons are able to realize it, and Cohen was the one who was able to realize new idea through innovative thinking of him. There were five attribute traits through which personality of Cohen is well defined: aspects of being sociable, good natured, dependable, calm, openness to experience (Defourny and Nyssens, 2010). These all points show that Cohen's motivational factors and mind set was quite different from other business managers that resulted in the great succession of his grocery stores and new creative idea of doing business. His mind set was different from all others out there in the market while not giving emphasis on profit maximisation. Because of this thinking only Tesco was able to drew ahead of all rivals and took over them completely.
P7 Background and experience can hinder or foster entrepreneurship
Coven was very eager to return to the tailoring business from which he had gained lot of experience by assisting his father over the years. But by purchasing NAAFI stock by his demob money that he had gained by volunteering into the Royal Flying Corps where he used to use his tailoring skills for making canvas for balloons and other aircraft. The experience that he gained in tailoring business was hindering Coven's path crucially, as it is not easy to move on with other kind of business forgetting the old one and its experience. As Coven was courageous, which is his best ability as a business manager (Bruton, Ahlstrom and Li, 2010). So he didn't stop and continued doing with his new idea of business i.e. a grocery stall. Coven belonged to a middle class family doing tailoring business, so this step took a U turn in the history of his family. As coven used to be very curios and reluctant for realizing new ideas and implementing them in the realistic world, background experience did not hinder his way much.
In other sense if we say, background experience of him has also helped in formation of new ideas, creativity, innovative ways, etc. by him. As he was into tailoring business with his father assisting him in their business he had gained many skills like creativity, innovation, ideas. For which tailoring business is all about. Entrepreneurship includes two factors in it Specialisation and Generalisation. Specialisation means perfection in one single stream of subject and generalisation means forming of new ideas by considering few factors from each specialised subjects. Coven was master in both of these he used his background experience in creating of new ideas and realizing them as well overcoming the factor that were hindering his path. He overlooked the economy and took the right decision unaffected by his background experience. Cohen has a simple adaptive behaviour, means any situation can easily be adapted by him and as he was a man with positive mind set any hindrance in his path wont affect him much like background experience. Normally entrepreneurs get affected by their background experience that hinder their path but Cohen was not one of them he was different from all, his way of thinking, abilities, skills, techniques of managing business, etc. That why he was the best business manager of all time among all the other entrepreneurs in the economy.
Sir Philip Nigel Ross Green was born on 15th march 1952 the chairman of Arcadia Group. Green was born and brought up in the middle class Jewish family. He belonged to a family where his father were a property developer and retailer. It was a U Turn in the history of Green's family when Green at the age of 15 leaved school after his father's death and started to work under a shoe importer (Nyuur, Brecic and Debrah, 2018). No one could ever predicted that a middle class Jewish family whose son working for a shoe importer could reach heights of the economy in the market. Green at the age of 21 started his first business of importing jeans from far east to sold them in London. As Green belonged to a family experienced in different sector of economy, it was hard for him to opt for such a business but he did this right.
To be a successful entrepreneur, one business man should have many good skills and abilities. An entrepreneur should have capability to think innovatively and has ability to carry out important decision for business enterprise. For Example: Sir Philip Green biggest entrepreneur of his era, who brought revolution in the field of import export. Green was so innovative in thinking and has great creativity skills which helped him to get succeed (Musteen, Francis and Datta, 2010). The main characteristic that was commonly liked by many entrepreneurs was, his motivation was not profit. The main motivation according to Green was to have new idea and realizing it.
Background of any person plays vital role in business or entrepreneurial decision of that person. It is very hard for anyone to take a U turn by leaving background and personal experience behind and move forward. One has to start from the beginning to gain experience in that field. Without experience anyone cannot survive in these kinds of markets and competition. If we take example of Green one the most successful and leading entrepreneur of UK (Matthews, Stowe and Jenkins, 2011). Green belonged to a middle class family where his father was doing business of property developers. After the death of his father Green started his journey from the beginning to gain experience in the field of import, export of goods and products to sell them. Negative impact was that Green has to struggle few years to gain experience and has to left studies and personal experience behind to move forward. To gain experience Green had worked under a shoe importer. Positive impact of it was that, while gaining experience under a shoe importer he learned modern strategies and techniques to sell products and to survive in the market.
From the above report it can be concluded the importance of entrepreneurship in business. It explained different kinds of entrepreneurial ventures and typology of entrepreneurship that exist in the industry and what are the similarities and differences between these entrepreneurial ventures. It also discussed about relevant data and statistics to determine the impact micro and small business on economy which is very important for any business to maintain properly. Apart from these topics it also focused on the importance of small businesses and businesses start-ups for the growth of social economy in United Kingdom. This report emphasised on skills and characteristic of Jack Cohen and explained how it is different from other entrepreneur in industry. In the end it discussed about various factors which can impact entrepreneurship.
Books and Journals
Stam. E. and van Stel. A., 2011. Types of entrepreneurship and economic growth.Entrepreneurship, innovation, and economic development. pp.78-95.
Aulet. W. and Murray. F., 2013. A tale of two entrepreneurs: Understanding differences in the types of entrepreneurship in the economy.
Szirmai. A., Naudé. W. and Goedhuys. M. eds., 2011.Entrepreneurship, innovation, and economic development. Oxford University Press.
Desai. S., 2011. Measuring entrepreneurship in developing countries. InEntrepreneurship and economic development(pp. 94-107). Palgrave Macmillan. London.
Ratten. V., 2011. Sport-based entrepreneurship: towards a new theory of entrepreneurship and sport management.International entrepreneurship and management journal,7(1). pp.57-69.
Lesakova, L., 2012. The role of business incubators in supporting the SME start-up. Acta Polytechnica Hungarica. 9(3). pp.85-95.
Matthews, R.B., Stowe, C.R. and Jenkins, G.K., 2011, January. Entrepreneurs-born or made?. In Allied Academies International Conference. Academy of Entrepreneurship. Proceedings (Vol. 17, No. 1, p. 49). Jordan Whitney Enterprises, Inc.
Musteen, M., Francis, J. and Datta, D.K., 2010. The influence of international networks on internationalization speed and performance: A study of Czech SMEs. Journal of World Business. 45(3). pp.197-205.
Nyuur, R.B., Brecic, R. and Debrah, Y.A., 2018. SME international innovation and strategic adaptiveness: the role of domestic network density, centrality and informality. International Marketing Review. 35(2). pp.280-300.
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.