T/508/0495 -Entrepreneurship and Small Business Management | Westford University College

Introduction

Entrepreneurship is a comprehensive term of a sole trader. In an entrepreneurship business a single individual is the owner of the business. The following assignment will provide the information about the entrepreneurial ventures and their typology. The below discussed assignment will also portray about how the entrepreneurs implement their ideas to expand their business and how various strategies of business help them to earn huge profit margins. It will also enumerate how small business in the UK market impacts on the country’s economy. 

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P1 Examine different types of entrepreneurial ventures and explain how they relate to the typology of entrepreneurship

Entrepreneur is known as the owner of the business, an entrepreneur manages and controls the business rather than working as a worker. An entrepreneur is the person who implements the ideas in such a manner to produce the products which can easily meet the criteria of customer satisfaction. An entrepreneur concludes the risks of a business or enterprise. Similarly, entrepreneurship is the process of exploring new ways of combining resources. There are various types of entrepreneurial ventures which are enumerated below:

Partnership: In order to form a partnership business two persons are required who are legally competent to enter into an agreement. In case of a partnership business the persons may not increase 20 whereas in banking business the person may not increase 10. In a partnership business the profits and losses are equally distributed among the partners and each of the partners are equally liable for debts of the partnership (Barber III, et al. 2019). Forming a partnership business requires an agreement which is known as partnership deed. It contains the amount of salary, commission, interest on capital payable to the partners.

Sole proprietorship: Sole proprietorship is defined as the business which is maintained by only one individual can also be termed as sole proprietorship. It is also defined as the sole trader. The profits and losses in this type of business are assumed by the owner. This type of business maintains flexibility in the management. This type of business is easy to form and the taxes are less. The owner is liable to pay off the debts incurred by the business.

Non- profit organisation: It is a type of organisation which serves the society. This type of organisation mainly performs their work without earning any profits. They gather their investments from the state government and serve the state at the time of need. Similarly, there are some organisations which are engaged in private sector activities.

Typology of entrepreneurship:

Based on ownership:

Private entrepreneurs: It is the simplest company form. It is mainly operated by an individual and the whole profits is earned by the owner. This form of business is mainly related to sole proprietorship where an individual is the owner of the organisation or enterprise. The entire riska are also beared by the owner in this type of entrepreneurship.

Based on size:

Large scale business: This type of entrepreneurship is mainly related to partnership business where a huge amount of capital is invested and the amount of profits are also high in this type of business. In this business type the minimum amount needed to be invested is 2.6 million.

P2 Explore the similarities and differences between entrepreneurial ventures.

The types of entrepreneurship are not similar. There are many advantages and disadvantages of different types of business (Minelli and Morelli 2018). The below discussed chart will let us know about the difference between sole proprietorship, partnership and non-profit organisation business. It will also help us to know about how these industries are helpful and how they affect.

 

 

Sole proprietorship

Partnership

Non- profit organisation

Starting up business

When an individual decides to operate a business at that time sole proprietorship of business comes into consideration.

When two or more people decide to open a business at that time partnership forms of business occur. No documents need to be files to start a partnership business.

Whereas, to form a nonprofit organisation certificate of formation is required to form an organisation in state legally. The organisation needs to file documents from state to state where the organisation desires to do their business transaction. 

Taking a risk

The risk  in this type of business is high. These businesses have unlimited liability for all debts.

Similarly, this business also has immense risk. At the time of a difficult situation the partner may lose their personal assets. The fulfillment of company debts may become a huge impossibility for the partners.

The organisation provides limited liability protection against business losses and debts to the owner of the business. So, there are low risks.

Entity of business

This organisation holds a single owner so no organisation structure is required to build.

In this type of organisation votes are organised to choose the officers and the heads of the departments.

Settings up nonprofit organisations are useful as this organisation is exempt from tax.

Profits

In this entrepreneurship all the profits are earned by an individual whereas the losses are also faced by the owner only.

The losses and profits are equally shared among all the partners who serve their services in the business.

The profits are distributed among the members of the concern.

Financial resources

The financial resources in this type of entrepreneurship are pooled by a single person or the owner.

The financial resources are pooled by all the partners in the business (Hansen, Bosse and Rasmussen, 2016). The partnership deed is maintained in this type of business. So, the partners are equally treated in this type of business.

Here, the financial resources are pooled by the members of the organisation.

 

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P3 Interpret and assess relevant data and statistics to illustrate how micro and small businesses impact on the economy.

Micro and small businesses have an enormous impact on the economy of the country. There are a huge number of small businesses and startups in the UK. They provide job vacancies to the citizens of the country who are neglected by the big corporations or companies. In recent years it has been observed that 99% of businesses in the UK market are SMEs. They provide huge support in the economy of the country. The yearly result declared that in the UK market there is 5.4 million of micro business which covers 96% of the business in the UK market. Small and the micro business encourage the country to innovate its activities (Gangi, 2018). The employment in the country is mainly held by the SMEs. It has been observed that three fifth of the employment in the country is done by the SMEs. The employment in the SMEs is 16 million i.e 60% of total. In the UK market the SMEs covers 99.9% of the total business community.

The small business mainly operates in the markets for not more than five years. This type of business faces various types of problems such as lack of capital, uncertainty in the economy, conditions of the market, brand value of the business etc. Some businesses operate efficiently so that they could easily run their business smoothly. According to the result of 2019 it has been portrayed that the business population has been increased upto 2.4 million i.e 69%. The small companies increased their brand value by providing proper knowledge and skills to the new comers, so that they gain the idea of expressing their new ideas and creativity by gathering outsourcing knowledge. Small businesses are also known as the backbone of the country’s economy. Among all turnover generated by the private sector SMEs has contributed 51%, the result of 2018. They also provide huge support to the big businesses when they face difficult situations. The rural development is also maintained by the small business as they provide jobs to the citizens. The country faced a decrease in the business population in the year 2017 around 27000. The SMEs in the UK market act as a tool where it reduces the poverty of the country. Majority of the small businesses are operated by a single individual and they are nor employers, they mainly operate as a sole trader where they can independently enjoy the business (Obschonka, Fisch and Boyd, 2017). The SMES also provides a huge contribution to the economy of the UK. In the UK market the small business enjoys over 16.3 million of people who are working in the small scale industries.

P4 Explain the importance of small businesses and business start-ups to the growth of the social economy

The small business in the UK market plays a very important role as it is known as the backbone of the market of the UK. it is generally defined as the opening of new business in the market. As small businesses motivates and embolden competition as well as implant new and fresh business ideas as they are also known as the seabeds of modernization.This in turn motivate others to participate in this new change.There are many points as to why small businesses are are important to the expansion of the communal economy

1) SMALL BUSINESS TURNOVER HELPS SHAPING THE UK ECONOMY - Turnover is a vital aspect whenever a company desires to start a business.Small and medium sized business as defined by the UK economy are those with less than 250 employees have less turnover around 50million euros. In 2018 it has been portrayed that the mixed turnover of bothe the small medium sized businesses is 2 trillion (Kulchina, 2017). Now from another aspect it is seen that it counts for a whooping 52% of the total turnover of the private sector. SMEs devote around 99% of all the businesses that are currently under operation in the United Kingdom. So it can be said that the collective success and failures of these businesses have an enormous effect on the economy and can be observed as the key point of expansion and predictability.

2) SMALL BUSINESS EMPLOYMENT FIGURES IMPACT THE UK ECONOMY - According to the study it has been observed that in the UK market 59% of businesses are private sector as they do not have any employers or sole traders. So it can be said that SMEs have a very big impact on job creation in the UK. As from a figure it can be seen that small businesses took 60% of the employment in the UK market as they have provided around 16 million jobs to the citizens of the UK.

3)SMALL BUSINESS GROWTH AFFECTS THE UK ECONOMY -  About business growth it can be said that 50% of the employment criteria are taken by the SMEs and for this purpose SMEs are expanding their operations day by day. According to the main sector of the UK it has been observed that the SMEs captured 99% of the market. The highest quantity is in beauty and pursuit and wellbeing services such as financing consultants. The small and medium sized businesses have a beneficial relation with the economy (Ioanid, Scarlat and Militaru, 2016). They are also considered very important as they contribute to the state of the UK and the health facilities of the country. 

 

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P5 Determine the characteristic traits and skills of successful Entrepreneurs that differentiate them from other business managers

The role of the managers and the entrepreneur in the organisation is the main differentiation between them. The manager is an employee of an organisation whereas an entrepreneur is the owner of the organisation. The entrepreneur takes all financial risks of their business. The detailed difference between a successful entrepreneur and a manager of other business are enumerated below:

 

Entrepreneur

Manager

The main difference is that the entrepreneur bears all financial risks in the organisation. The entrepreneurs are ambitious.

The managers in an organisation work for a limited amount of salary and they don't have to bear any risks in the business (Caro, 2020).

The entrepreneurs are the sole trader of the business. They are also known as the owner of the business. So, they mainly focus on how to expand the business by attracting more customers.

Whereas the managers work as an employee of the organisation. So, they work on a daily basis and aim on the functioning of the business.

Entrepreneurs are much more creative and motivated. They utilise new ideas to expand their business and also remain motivated all the time.

The managers provide support to its team with career development. The managers also develop the skills and knowledge of the employees.

The profits are earned by the owners. The profits are known as the reward for the task.

Whereas the managers receive remuneration as a reward according to his/her performance.

The one and only quality the entrepreneur must have to startup a business is leadership.

The managers must have qualities like accountability, leadership and assertiveness ("Difference between Entrepreneur and Manager - Explained", 2020).

The entrepreneurs are also known as the person who becomes prosperous in his aims.

The managers are responsible for the management and the legislation of a group of people.

The entrepreneur may not have any qualifications but then also he can operate the business according to the demand of the society.

The managers must have the proper knowledge to perform his/her work in an enterprise.

The business gains the resources through financial institutions or startup promotions.

The organisational objectives can be achieved by distributing workforce and financial resources which is the responsibility of the manager.

 

P6 Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation and mindset.

Personality of the entrepreneur includes the attributes, motives and values of an individual which help them to implement the ideas to startup a business. The behavioural processes of an individual are also caused by the personality traits (Moro, et al. 2018). The entrepreneurial personality develops the motivation of an individual and also constructs a mindset about the business (2020).  There are various aspects of the entrepreneurial personality which develop the entrepreneurial encouragement and mindset are discussed below:

Optimism: The entrepreneurs are always focused and they mainly look ahead to expand their business and how to earn more profits. The entrepreneurs are goal- oriented and for this purpose they always remain in a stage of motivation. The implementation of new ideas also supports the individual to achieve success in their business. The entrepreneurs always need to plan the work procedure to reach the goals efficiently.

Risk- takers: The entrepreneurs face various types of problems while starting up their business. There are several challenging jobs which they face in their businesses and they need to handle those in an efficient way (Mayo, Nohria and Rennella, 2016). The complacency in the behaviour of the entrepreneur will affect the company. The entrepreneur makes their mindset while starting up the business. Every financial risk is faced by the entrepreneur similarly the profits are also earned by the individual or the owner of the company.

Devotion: The entrepreneurs mainly focus on the goals and the business. They build the business according to their desires. Among the all aspects this is the most followed by the entrepreneurs to develop and to expand their business. The entrepreneurs also cope up with the challenges which arise in their business profile. They also keep doing hard work until they reach their objectives.

Creativity: The entrepreneur is also known as the owner of the business. So, they independently implement their new ideas in the business to expand it. They utilise their ideas in a different way. They gather their ideas by observing the world in a new way. They also encourage the business to become innovative by utilising several types of new ideas.

Resilience: Resilience supports the entrepreneur to fit the difficult situation. This is another personality trait which makes a successful entrepreneur. This aspect helps them to solve the problems in such a way that it could easily reach the customer satisfaction criteria. The entrepreneur must have the skills to sell its own products to the customers. They also need to develop the products in such a manner which can easily satisfy the consumers.

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P7 Examine, using relevant examples, how background and experience can hinder or foster entrepreneurship

The hindrances faced by the entrepreneurship business are very dangerous. Sometimes this type of business affects the economy of the country. The entrepreneur may not have a deep desire to grow the business, so many businesses in the country remain unsuccessful due to lack of new innovative ideas and strategies. Jack Ma, the head of Alibaba.com is an chinese entrepreneur who achieved huge success through his website (Lee, 2019). There are several characteristics which Jack Ma utilised to achieve success in his business are described below:

He coalesces people to achieve a single objective: In an entrepreneurship business vision is the most vital element. According to Jack Ma, he always unites his people to achieve focused goals. Vision is much more vital than a leader. He always used to encourage his people to achieve higher positions in the business through which the goals can be achieved efficiently.

He has prudence: Implementation of new ideas in the business will support the business to expand. Jack Ma concludes that to become a good leader he/she must have a good prudence. In a business decision is the most working element. The leader must have a good insight on where the decisions need to be applied. So, Jack Ma always assumes new ideas after gathering information from the outside world.

He recruits people with higher qualifications: Skills and knowledge are known as the pillar of a company. People with new ideas and skills can easily support the company in achieving the organisational objectives. According to Jack Ma, hiring the wrong person may destroy the company, because they don't have any new ideas through which the company will become successful.

He makes friendship with everyone: Enemy is the one who destroys the business. So, according to Jack Ma he uses a philosophy of maintaining a friendly competition. This strategy helps Jack Ma to become successful in this developing world (Keane, Cormican and Sheahan, 2018) . Jack Ma treats his competitors as a challenging job. So, he never sees his competitors as an enemy. These characteristics made him a big billionaire in today's world.

Conclusion

The above assignment provided the information about how SMEs are capturing half of the UK market. The difference between the skills and traits of a successful entrepreneur and a manager of an organisation are also discussed. The information about how the entrepreneurial businesses are facing problems nowadays are also enumerated in the above assignment.

 

 

References

Barber III, D., Ghouse, S.M., Batchelor, J., Chaher, F., Harris, M.L. and Gibson, S.G., 2019. An investigation of Indian student attitudes towards entrepreneurs and managers. Journal of Entrepreneurship in Emerging Economies.

Gangi, J., 2018. Classical Guitar Study as Creativity Training: Potential Benefits for Managers and Entrepreneurs. Journal of Open Innovation: Technology, Market, and Complexity, 4(4), p.45.

Hansen, U.K., Bosse, M. and Rasmussen, M.A., 2016. Expectations matter when studying trusting as a process: developing trust based on expectations between investment managers and entrepreneurs. In Trust, Organizations and Social Interaction. Edward Elgar Publishing.

Ioanid, A., Scarlat, C. and Militaru, G., 2016, September. How Mobile Technologies and Social Media Merge to Help Managers and Entrepreneurs Fast Track Their Business. In European Conference on Innovation and Entrepreneurship (p. 297). Academic Conferences International Limited.

Keane, S.F., Cormican, K.T. and Sheahan, J.N., 2018. Comparing how entrepreneurs and managers represent the elements of the business model canvas. Journal of Business Venturing Insights, 9, pp.65-74.

Kulchina, E., 2017. Do foreign entrepreneurs benefit their firms as managers?. Strategic Management Journal, 38(8), pp.1588-1607.

Lee, S.Y.T., 2019. Entrepreneurs, managers and inequality. Review of Economic Dynamics, 32, pp.42-67.

Mayo, A., Nohria, N. and Rennella, M., 2016. Entrepreneurs, managers, and leaders: What the airline industry can teach us about leadership. Springer.

Mazzarol, T. and Reboud, S., 2020. Work Book: Entrepreneurs vs. Owner-Managers. In Workbook for Small Business Management (pp. 9-17). Springer, Singapore.

Minelli, E. and Morelli, C., 2018. From managers to entrepreneurs: a career transition between adaptability and protean attitude. Organizing in the shadow of power.

Moro, A., Fink, M., Maresch, D. and Fredriksson, A., 2018. Loan managers’ decisions and trust in entrepreneurs in different institutional contexts. Entrepreneurship & Regional Development, 30(1-2), pp.146-172.

Obschonka, M., Fisch, C. and Boyd, R., 2017. Using digital footprints in entrepreneurship research: A Twitter-based personality analysis of superstar entrepreneurs and managers. Journal of Business Venturing Insights, 8, pp.13-23.

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