Federation of small business have been asked ways through which entrepreneurship coul be positively promoted in the area. This report attempts to explore range of businesses which are available and how they impact economy of a nation.
- Provide an explanation on different types of entrepreneurial: ventures and how they relate to typology.
- Identify the similarities and differences of entrepreneurial ventures mentioned in previous question.
- Conduct an assessment of data which signifies the impact of small businesses on economy.
- Explanation of how small business contributes to growth of social economy.
- Determining characteristics, traits and skills of successful entrepreneurs.
- Carrying an assessment of how entrepreneurial personality reflects entrepreneurial mindset and motivation.
- With the use of different examples, states how person’s background and experiences hinders and fosters entrepreneurship.
The world economy is developing at a steady rate. There is always a demand for goods in the market. The market is becoming large. With the developing economy and with the ever-increasing needs of the customers, many individuals are taking up small business. This is known as entrepreneurship. The individual takes up small businesses mainly to earn profits. This entrepreneurship is becoming important. In the following essay, we see the various kinds of entrepreneurial ventures and types of entrepreneurs. This essay brings out the various aspects of entrepreneurship along with bringing out the characteristics required to be a successful entrepreneur.
P1: Different types of entrepreneurial ventures and its relationship with the entrepreneurship typology
Entrepreneurship is mainly defined as the way in which a person develops a small business to earn profits by taking significant risks. As stated by Ibrahim (2014), it is where the person has the objective and mindset to have a business of his own. He is ready to take risks and challenges shortly and as such the risks small or large amounts of money with the goal to earn maximum profit. Entrepreneurship helps businesses to grow. Entrepreneurship provides the scope for small businesses men to earn profits as they take ventures. It also helps in the overall growth of a person and makes the person responsible for doing any job. As opined by DeNisi (2015),an entrepreneur is ready for any challenges which may arise in business. As such entrepreneurial ventures are mainly categorised into three types- small profit ventures, lifestyle ventures and high growth ventures.
Small profit ventures, as the name suggests are entrepreneurs who aim at small profits. Usually, the businesses of this type are also small, and they concentrate on in gaining a little amount. The company is often not very large, and the entrepreneurs are happy with only small profit. Lifestyle ventures mainly aim at the personal growth of a person. As directed by Campbell (2012),the sole authority is given to the owner, and the entrepreneurs mainly aim for the development of a person so that a considerable amount of income can be earned. Lifestyle venture helps in the grooming of a person. High growth ventures mainly involve entrepreneurs who earn high amounts of money. They aim for the maximum growth of the company and try to think of ways to maximise profits. They think of ideas for making their company big and as such are ready to take any risks. Thus, these are the three types of entrepreneurial ventures
There are various types into which the different types of entrepreneurs can be classified as:-
(A) Based on the type of business
This includes three categories: -
Trading Entrepreneurs - These entrepreneurs take up trading business. They sell finished products to the customers.
Manufacturing Entrepreneurs - These entrepreneurs are engaged with manufacturing items. They take care of the customers’ demands and produce goods based on that.
Agricultural Entrepreneurs - These entrepreneurs are engaged with agricultural products. They manufacture and sell agricultural materials mainly to the farmers.
(B) Based on the use of technology there are two types of entrepreneurs -
Technical Entrepreneurs - These entrepreneurs are mainly engaged with the technical staffs. They make the fullest use of the technology in their business and do most of the work using technology.
Non-Technical Entrepreneurs - Non-technical entrepreneurs do not use much of the technology. They are not very well versed with technologies and as such prefers to use human resources instead of technology.
Based on ownership, there are three types of entrepreneurs -
Private Entrepreneur- A private entrepreneur sets up business on his own through the individual property.
State Entrepreneur- A state entrepreneur uses the property of the state to carry out the business.
Joint Entrepreneur- Joint entrepreneur is a combination of both the private and state entrepreneurs.
Based on Gender there are two types of Entrepreneur-
Men Entrepreneurs- Here the business is managed by men.
Women Entrepreneurs- Women take up entrepreneurship in this case
Based on the size of the enterprises it is classified into three types -
Small-scale entrepreneurs- Entrepreneurs who invest less than Rs 1 crore in business is known as small entrepreneurs.
Medium-scale entrepreneurs- Entrepreneurs who invest between Rs. 1-5 crore is known as medium-scale entrepreneurs.
Large-scale entrepreneurs– Entrepreneurs, who invest more than Rs. 5 crore is are known as large-scale entrepreneurs.
So, the various types of entrepreneurs face different kinds of ventures. Some of the entrepreneurs aim only for small profits which other aims for significant gains. Some investment is meant for the grooming of a person. As such, the different types of entrepreneurs can be associated with the different types of investments.
P2: Interpret, assess and present the impact of the micro, as well as small businesses, have on the economy
As per a report in House of Common, May 15, 33% of the people in the UK are employed by SME, and it accounts for 19% of the turnover. Within SME there are different microbusiness booming. As per Burns (2010), there are now 5 million of these businesses in the UK up from 3.5 million in 2000 and over 15 million in the world. SMEs in the UK provide almost half of the job opportunities. Despite being deprived of multiple skills, administration, resources and finance, SMEs have had a positive impact on development. SMEs and entrepreneurship have helped eradicate poverty to a great extent. SMEs require capital, human resources, approach and marketing strategy to be successful. Nowadays, it is widespread to sell the job and pay for it, and SMEs are the ones most benefitted from it.
Various research and surveys have proved that micro and small business create a lot of jobs. They provide a lot of job opportunities and tend to hire people who are not very experienced or qualified, creating a massive opportunity for locals. Having less complex allows direct involvement of managers and decision-makers in critical decisions.
Small and micro business make a significant impact because of the enormous number and income provided in the form of wages and salaries paid to workers and distribution of profit among the entrepreneurship.
Diversification, Linkages and Foreign Trade:
Big firms have a lot of people stagnant in their job, which is not the case with SMEs they provide equal opportunities for all with discrimination leading to broad and diverse work atmosphere.
Total employment by the small and micro organisations
These above graphs clearly state the importance of small and micro business in the economy of UK. The first part shows the percentage share of different business in UK throughout different years. The second part shows the percentage share of the total turnover of UK of small, micro and big business. The last part of the image shows the percentage of job opportunities created by the small, micro and big business.
P3: Importance that small businesses and business start-ups on the development of the social economy
As opined by Kuratko (2016), small companies and business start-ups have developed to a large extent in the recent decades. Many aspiring men and women take up a small business. To gain popularity and have their name, they start their businesses. At first, they are not recognised in the market due to a high level of existing competition, but slowly they get accepted. Even at times, it becomes difficult for the businessmen to make people understand their business and sell their products. Despite all these difficulties, small companies and start-ups have helped in the development of social economy. The different importance of small business and start-ups in the social economy are as follows: -
As small companies and start-ups have joined the market; the competition has already been increased. As per directed by Paddock (2017),there is always an existing competition between the large-scale economies and these small businesses. Every business tries to establish themselves in the economy and to continue with the same brand name. To maintain such standards all companies, compete highly in the market and with the growth of small businesses, this has increased more.
Local Hiring -
At the first place, the small businesses do not have a name. They do not have a brand name as such, and most experienced people may not wish to work with them. This is because the company is hardly recognised at that time. As such, the small businesses hire local people for their business. This increases the hiring of local people. The local people get a job and a mean of survival.
The small business creates diversity in the workplace. There are people working in the same company with different backgrounds. They come from different parts and have their own culture and ways of living. As such they create a lot of diversity.
Small business and start-ups eventually help in the turnover. This is profitable for the company in the first place, but from a broader point of view, the turnover helps the economy at large (Duray, 2015).
Small businesses and start-ups contribute to the economy. They help people to get a source of income for living and the CSR activities taken up by the company, supports the society. The company takes up various projects to develop its neighbouring areas and develop.
Small business and start-ups eventually help on the economic growth of the nation. When a company develops, it not only improves its economy but it also helps the economy at large.
Future Growth -
People expect a lot of things from small businesses and start-ups. As such, they also need to fulfil the expectations of the people to survive in the society. As such, there is highly expected future growth from small businesses and start-ups.
P4: Determining the characteristics skills and traits of the successful entrepreneur with the help of the example
To become a successful entrepreneur is not an easy job. Not all small business does succeed. Sometimes somewhere anything might go wrong. To become a successful entrepreneur is instead a tough task. As intended by Parker (2012),there are a lot of external factors which helps a business to become successful. But more than the outside factors what is required more is the will and determination of the entrepreneur. If the entrepreneur is confident in his business and does not lose hope even after failures, his company is undoubtedly going to succeed. To become a successful entrepreneur, various skills and traits are required by the businessmen. Some of the characteristics can be mentioned as: -
The businessman should know what the goals of his company are. He/she must be very focused and sure of what are the purposes s of the company and what they aim to achieve it. A proper inspiring goal is required which the businessmen should focus on.
As opined by Schaper (2016),an entrepreneur should have enough money in the first place to start the business. Then the entrepreneur should be capable of managing money. He should be able to make proper use of money and distribute it in the rift order.
An entrepreneur should be passionate about the work he is doing and should be doing it happily. If the entrepreneur has a passion for the business, he will surely be going to succeed.
The entrepreneurs should be motivated all the time. He should not be demotivated when he incurs loss or during the time of crisis.
Able to face risks-
An entrepreneur should be ready to meet threats in the business. He must not back off when he cannot withstand the dangers. He should always be prepared to face risks at any point in time.
An entrepreneur should have a positive attitude towards the business. He should always think about the company’s benefits and benefits of the workers and how that can be improved.
As directed by Smith (2012), an entrepreneur should have patience and must not lose his cool quickly. He should deal with crisis situations and employees very patiently. If he loses his cool, it will create an adverse impact on the company's name.
Good knowledge about the product-
The entrepreneur should have an excellent experience about the product and should know every detail of the product and should be able to say every aspect about it.
This is the essential characteristic of a businessman. He should be an outstanding leader for the employee and must be capable of managing all situations.
Excellent Public Relations Skills-
An entrepreneur should have excellent public relations skills so that it attracts a lot of employees, customers and the market and it becomes easy for the company to sell its products (Businesscasestudies.co.uk, 2018).
Some of the skills are imbibed in the entrepreneurs. They inherit these skills from their family. But most of the skills have to be developed in an individual to become a successful entrepreneur. With time, the skills become better and proper, and it increases with time and practice.
P5: Assessment of how entrepreneurial personality reflects the mindset and motivation of the entrepreneurs
A person is not born as an entrepreneur. There are several factors which lead a person to become an entrepreneur. Right from family, socialisation is essential for the proper upbringing of the child. As such it develops a mentality amongst the children if they choose to beam entrepreneur. Then there are relatives, extended family who also play a role in creating a mindset. As opined by Buchholz (2016), finally, the culture and society upbringing also help to motivate the entrepreneurs. As such, there are several factors which lead to the motivation and setting the mindset of the entrepreneurs. The several factors can be classified as: -
Family Upbringing- In the primary level of an individual comes the family. The family helps in the socialisation and proper upbringing of a child. If the children an adequately y socialised from childhood and are made to understand the benefits of business, then it creates a mindset in the person to start up a business or to do something. The family continuously keeps on supporting the entrepreneurs for their growth and prosperity.
Lifestyle - The lifestyle which a person follows a very important. The way they maintain their lifestyle and thinks about it creates a particular mindset. This, in turn, motivates them to become an ent