This assessment will cover the following questions:
- Analyse the impact of small businesses on the economy.
- Identify the key aspects of an entrepreneurial mindset.
- What are the factors that create barrier in entrepreneurship?
Entrepreneurship is a simple activity which helps to set up a business and taking on a financial risk in order to expand a business. While on the other side, entrepreneurs are the person who have a strong vision and help in the growth or expansion of a business. The present report main aim is to understand the meaning of entrepreneurship and the barriers to business start- up. The study explains different types of entrepreneurship ventures and how the typologies are directly related to it. Further it describe the difference as well as similarities between the ventures and also explain how micro and small business creates impact upon the economy. Report explains how small business contributes to growth of social economy after Brexit and then determines the characteristics, traits and skills which makes them differ from business managers. Moreover, report assesses how entrepreneurial personality reflects their motivation and mindset. Further it describes how background and experience can hinder or foster entrepreneurship.
P1 Presenting different types of entrepreneurs and their typologies
There are four main types of entrepreneurship ventures which are as follows:
Small business Entrepreneurship: In UK, there are about more than 50 percent small business who contributed large amount to the growth of economy. These businesses are grocery, travel agents, internet commerce, plumbers and electricians etc. They are the person who runs their own business and earn money to feed their family members (Lipset, 2018). They did not attract venture capital, they fund their business through family or small business loans.
Scalable Start- up Entrepreneurship: They are those entrepreneurs whose main aim is to earn profit from day one because their vision is to change the world. Even they hire the best and brightest people to grow their business and their job is to search for a repeatable and some scalable business model. For example, scalable startup in innovation cluster is Silicon Valley, Shanghai etc.
Large Company Entrepreneurship: This type of business have finite cycles and their entrepreneurs are quite innovative and offers different style of business offering to their customers in order to draw attention of many users. Their main aim is to earn profit in order to expand their current business. They recently accept the changes of their customer’s taste, new technologies and through their innovative ideas they sold their new products in market so that customers will also enjoy. They did not contribute their part for the growth of economy.
Social Entrepreneurship: The social innovators are those entrepreneurs who are focus on creating products and services who solve social needs as well as problems. Their main aim is to change the world and make it better place and not to take market share and also to create wealth for the wonders. Some of them are non- profit, profit or hybrid (Dees, 2017).
Typologies are related to this are as follows:
Intrprenuers: This type of person runs a company in forward direction through their innovative ideas and also promotes their business in order to achieve their defined goals and objectives. They also assign different duties to their employees and have a capability to run a business in such a direction which helps to promotes it in further level of success.
Based upon gender: these types of entrepreneurs are based upon male and female. If a business is taken and owned by male then this is known as male entrepreneurs while on the other side if business is run by female then it is known as female entrepreneurs (Volkov, 2016 ).
Skeptical Entrepreneurs: These types of skeptical entrepreneurs sees success of others and then suddenly start question about it. These types of entrepreneurs are generally start doing the same thing which an successful entrepreneurs will do in order to achieve he defined goals of their company.
P2 Presenting Differences and similarities between entrepreneurial ventures
Similarities: All large business, small business and social business entrepreneurs are work to earn money but have a different motive but aim is same. They all contribute for the growth of economy so that customers will enjoy. While on the other side, social entrepreneurs and their objective with characteristics, the main focus of this enterprises is to serve the humanity by solving the social issues and providing them need according to fulfill the demand in terms of money (Stuetzer and et.al., 2018). It clearly states that they all work to maximize profit for the welfare of their family as well as society. Some of the social entrepreneurs are not earn for the maximization of profit on the other side, at highest level most of the small business entrepreneurs are mostly looking to achieve the financial independence in order to build a profitable business. They all work in order to fulfill the demand of their customers and then generate revenue. Therefore, they all work with high impact as their primarily motive is in creation of wealth.
|Small business Entrepreneurship
|Large Company Entrepreneurship
|Their main aim is to earn profit for their welfare of their family (Siegel and et.al., 2017).
|They earn money to maximize their business and earn to grew their existing business.
|Their aim is not to earn money but to fulfill the needs of their society (Storey, 2016).
|It contributes large amount for the growth of economy of UK.
|Large business does not contribute for the welfare of the economy of UK.
|They does not contributes for the growth of economy.
|They did not have much money for investment.
|They actually earn to generate revenue for their future needs.
|They also did not have any financial goals because they work to complete the needs of their society (Naranjo-Valencia and et.al., 2018).
|Contributes biggest part of their money and also helps in total employment also (Parker, 2018).
|Doest not contribute for the growth of economy.
|Helps to provide employment that further help to contributes for the growth of economy.
|Does not have any formalities to invest some amount for the growth of business.
|Have long formality to complete the procedure and also to invest some for further business.
|Does not have to follow any legal formality for investing money.
|Small business does not have many employees and as a result their business size is small but this type of business are large in number in UK.
|Business size of large entrepreneurship is quite high because their employees range is also high (Lounsbury and Glynn, 2018).
|Individual or group of numbers is small in size that is why their business size is also low.
P3 Presenting how micro and small business impact on economy
Small and micro business contributed biggest part for the growth of UK economy. They contribute in such a way that it helps to rise the GDP from 59 percent o 72 percent from the last three decades of the 20th Century. This type of business are specially work in manufacturer sector and therefore, it has resulted in a downsizing of existing companies. Even the increasing use of information technology is also reduces the economies of scale and thus it led to increases the number of small start ups in manufacturing sector in small business. Moreover the biggest contribution in small and micro business is such that it helps to increases the share of employment of UK. As per the small business service, it provided 58.5 percent of the jobs in the country’s economy and micro business have only up to 9 employees and there were about 5.4 million small businesses in the UK in 2016 which is almost 96 percent of all business (Micro and small business impact upon UK economy, 2018)
In 2016, almost 2 percent of small and micro business with no employees and more than 20 percent business are led by the women and in total, around 1.2 million business are led by the and further as per examining 11 percent of information and communication sector is led by women and in education sector 45 percent and health and service sector almost 56 percent is led by women which clearly shows that women in small and micro sector also contributes their part for the growth of economy (Women contribution in UK Economy, 2018).
As new technologies and globalization reduces the importance of economies of scale in many activities and therefore, it potential contributes of smaller firms are also get enhances. But as a result, they also faces may problems such as lack of financing, difficulties in exploiting technologies etc. Hence, the small and micro business are also creates positive impact upon the growth of the economy of UK. From last many years, the employment rate of the UK is also increases because many of the small business also start up their new business in order to feed their family. Therefore as a result this business are contributes biggest part for the growth of the economy. Even at initial stage the investment to start up new small business is also takes low amount therefore, it helps many people to start their business for the growth as well as feed their family members through generating revenue (Lipset, 2018). Such as enterprise obviously creates more jobs in same period as compared to large business. Hence it has been observed that small and micro business definitely contributes their biggest part for the growth of economy as well as employment sector too.
P4 Explain how important small business start up will contribute to growth of social economy after Brexit
The performance of UK economy is enhances after the affect of Brexit on UK which is actually summarized in the GDP. During the time of Brexit, the growth of small business is slows down and the 0.5 percent growth was mainly in the services which is directly grew up to 0.8 percent which shows quite interesting because manufacturing has been capturing the headlines because of weaker pound boosting growth (Kuratko, 2016). As a result, the small business also faces many problems because they did not get loans easily from the banks and as a result they did not invest amount to start up their business at vast level. Small business are more susceptible because they generally have lower field of operations as compared to large business and therefore they might struggle for greater investment.
Falling GDP which means that smaller business may also struggle to start up new business and around more than one lac small business were also forced in UK to pay VAT upfront on all goods which are imported from European Union after the Brexit. In addition to this, one big impact on small business and the UK economy is also faces struggle related to pound. Because the pound has suddenly dropped loosely 15 percent against currency and people faces lots of problem because of sudden raising prices of the goods and it hardly impact upon people to buy their products as per their will. Even the EU also operates a single market so that EU can freely trade with no import or export duties. The main aim of this idea is to free up trade and reported the UK to conduct billion worth of trade in order to make good market for UK. Moreover, a weak pound is bas for the economy of UK and as a result, people will buy more from oversees then they sell and the selling goods are also become cheaper and buying from oversees make more expensive (Contribution of Small business after Brexit, 2018).
As a result, a weaker economy of the country also pushing up a inflation and at last the prices of the goods also raise which means that people will not enjoy while shopping. At that time, many people start up their small business in order to provide cheap rates of products to their customers so that their people will have to spend a lot of money for buying a product. At this stage, the contribution of small business creates positive impact upon the growth of the economy of UK. Hence it has been also examined that small business also raised their revenue growth projections upon 2 percent in next few months only. Therefore, it shows that the contribution of small start up business makes positive and direct impact upon the growth of economy of UK (Kirzner, 2015).
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P5 Presenting two entrepreneurs with their characteristic, traits that makes them differ from business managers
Characteristic of Bill Gates: Bill Gates is founder of Microsoft and consider as one of the most talented entrepreneur because of his good management skills and best leadership qualities. He work tirelessly without any hesitation, even during his decision making process, he also involves their employees in order to make suggestions and provide recommendations for the good and bad for the welfare of a company (Hitt and Duane Ireland, 2017). Another characteristic is he is growing and learning abilities and always makes extra efforts to improve the communication power so that he can easily address the mass of audience.
Traits of Bill Gates: Bill Gates has faith in themselves as well as his team members which is another important trait which every entrepreneur must have. Such that while in decision making process, he always involve his team members and take advise from them. At initial level of starting up a business, Gates also have a high risk tolerance power so that If the business faces any difficulties or crisis then an entrepreneur should have the power to adjust the loss and again take new steps for the growth of a business (Goffee and Scase, 2015).
Differ from managers: As Gates have a good leadership and management skills which makes him differ from the managers of a business and entrepreneurs also have high risk tolerance power which generally business manager does not have. Managers also did not have faith in their team members but on the side top entrepreneurs do believe in their team members also take advice from their team mates which manager do not.
Characteristic of Richard Branson: He is one of the famous English business magnate, investor and author and of- course one of the top entrepreneurs. Thinking of Branson makes him differ from other because he has a good and strong vision power which force him to think for a future and take risk but never get embrace for failure. Even they have good communication skills as well as inter personal skills that help to do the work and reach a business towards a next level of success.
Traits of Richard Branson: Branson have positive company culture and also hire best candidates for their company who helps them to achieve the defined goals and objectives of a company. Hr further have the ability to think differently and also have good innovative skills in order to expand their current business (Eckhardt, Ciuchta and Carpenter, 2018). Branson also have the art of delegation which further helps to reduce the workload and provide opportunities to ambitious employees.
Differ from managers: Characteristic and traits makes Branson differ from business managers. Such that having a good communication skills and broad thinking makes different from the business managers. Branson also have an ability to delegate and willingness to listen and learn which generally a business managers does not have. Having high risk tolerance power and positive attitude towards a culture makes him different from others so that it will help them to achieve the defined goals and objectives in prescribe time.
P6 Assessing how aspect of entrepreneurial personality reflect entrepreneurial motivation and mindset
The mind set of each and every entrepreneur is quite different from other business managers. They are the actors who have an ability and drive to carry out innovations. They always try to produce the new products and goods for the expansion of their business. In order to carry out as well as implement new ideas they entrepreneur also need collaborators and workers for the growth of the company (Drucker, 2014). For the possibility of the success, entrepreneurs must have a mindset for creating new ideas as well as they must be an autonomous leader in relation to any organization. Therefore, autonomous is a most important motivational factor for an entrepreneur.
While on the other side, profit is also a prime motivation factor for them. It is instead the creative phase between having an idea and realizing the idea which is the main motive for them. But only making money is not only an important, but making collaboration with their employees will also help them to create motivation. Moreover, when it comes to maximization of profit which is not creates a motivation factor because making profit is nevertheless a necessity in order to successfully implement an idea.
As Bill Gates also have creative mind and critical thinking which makes him differ from the business managers. He is also a result oriented person, which always help him to achieve the defined goals of their company’s success (Cooper and Folta, 2017). If the mind set of an entrepreneur is clear and broad then no hurdles will creates any obstacles for their success path. A mindset of an entrepreneur generally do smarter work as compared to business managers and also believe in creating new ideas and try to executing them in practical knowledge and this mindset of Bill Gates directly reflect their motivation. Moreover, Bill Gates spend lot whenever he feel that a person is needy then he spend a lot of money just to feel them good and appreciates as he is not proud on his work and himself. Entrepreneurs should also have self confidence and self motivating power to achieve the target and fulfill all the need to run the business in longer way. They are proactive to change the lifestyle and they do not need any permission to run the business. Therefore, this clearly shows the aspect of entrepreneurial personality which reflects their motivation and mindset.
P7 Presenting how background and experience can hinder and foster entrepreneurship
Bill Gates’ father was prominent lawyer and they always support Gates and help him to complete his education. Though Bill Gates is the fourth son of their family and early on his life, Gates observed that his parents wanted him to pursue a law career but on the other Gates want to become one of the most popular men in the world. At the age of 13, Gates buy a computer for his school purpose and he also took an interest in his Maths classes and then he wrote first computer program and in this way only, he start experimenting new and different thinks without any support. Hence he proves that without anyone support, a person can do anything and succeed in his life (Burns, 2016).
Gates was a National Merit Scholar when he graduated from Lakeside school and scored good marks at that time also his father also help him and support him because his father realizes that Gates is one of the best person who can do for the welfare of his country and earn fame. After completing his graduation from the college, Gates initially read the issue of Popular Electronics then he contacted MITS and then inform them about himself that he also working for the BASIC interpreter for the platform. At that time firstly he starts working with them and then organizes (Bruton, Zahra and Cai, 2018). Microsoft, BASIC was popular with the computer and this makes him popular in the world. After that he further go for IBM partnership for his upcoming personal computer. Even then Gates did not offer to transfer the copyright on the operating system because Bill Gates also believed that other hardware vendors will also clone IBM’s system.
This clearly shows that Bill Gates family members are not support him for their further studies because he already have many siblings that is why their family members did not support. On the other side, when he got a national merit award then his father realizes that he definitely do well and start supporting him. On the other side, experience also makes Bill gates more stronger entrepreneur among all. After graduation Bill Gates start doing some work and at the end became the founder of Microsoft company and consider as one of the best entrepreneur among all.
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By summing up above report it has been concluded that entrepreneurs have their own importance in every business. Report shows different types of entrepreneurship ventures such as large, small and social entrepreneurs and they all make contribution for the growth of economy of UK. In addition to this, report also concluded that small and micro business makes largest contribution for the growth and also help to provide employment opportunities to the people. Moreover, even small start up business also makes contribution to the economy after Brexit such that it creates positive impact upon the growth of economy. Report further concluded that entrepreneurs are different from the business managers in many ways such that critical thinking, high risk tolerance power, good communication skills etc. Moreover, a good entrepreneur’s personality also reflects entrepreneurial motivation as well as mindset. Report further concluded that background as well as education foster entrepreneurship and makes a person good and best entrepreneurs among all.
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