ENTREPRENEURSHIP AND SMALL BUSINESSES MANAGEMENT
Entrepreneurship aims to develop, manage, and organize a business venture by taking different risks in order to make a profit. In today's economy, entrepreneurship is combined with labor, land, capital, and natural resources which can produce profits. Entrepreneurship development is very much essential as it influences the economic prosperity and growth of a country. This enables the organization to create a strong free market economy. The entrepreneurs aim to provide assistance in the identification of effective opportunities for the organization. These opportunities help the organization to create innovative and effective services for the society. The present study focuses on the different types of entrepreneurial venture and how they create an impact on the economy. Moreover, the study focuses on the impact of small business on the economy along with assessing the mindset of the entrepreneur that hinders or fosters entrepreneurship.
LO1 Explore and illustrate the range of different ventures that are entrepreneurial
P1 Examine different entrepreneurial ventures and explain how they relate to entrepreneurial topology
Entrepreneurship defines the ability to take proper action and offering the courage that helps in preserving and committing to all the available challenges and problems that benefits an organization. According to Basu and Bharti (2016), entrepreneurs possess the ability to transform vision into a business. Entrepreneurs help the organization to identify several opportunities to make use of the available resources in an efficient manner. It helps to set up a promising future for the organization. Entrepreneurs in small organizations help them by identifying various areas that they need to work on along with providing many ways that help the organization in promoting their new products and services. The activities of entrepreneurship vary from organization to organization. The different kinds of entrepreneurial ventures are discussed below:
Private entrepreneurship refers to the activities of an entrepreneur, where it deals with all the prevalent process. The process at first deals with the identification of many opportunities which benefits the business in terms of overall growth. Countries consist of different entrepreneurial ventures, mostly in terms of medium and small organizations. Moreover, this entrepreneurship influences in contributing to the economy of the nation by providing employment opportunities along with value-added initiatives.
Large organizations deal with this type of entrepreneurial activities. For maintaining and developing the business operations, large organizations expand their entrepreneurial activities. This activity includes producing new products or services that help in attracting and retaining more customers. The corporate entrepreneurs mainly focus on the organization culture and process for creating a suitable and friendly working environment. This enables them to handle risks efficiently along with gaining more future opportunities.
According to Blackburn (2016), this is an innovative strategy which is used in encouraging the employees of the organization for delivering innovative products and services. After the employee ideas are approved by the high-level organizational management, the organization focuses on financing in the development and research field. This entrepreneurship helps the organization by enhancing the workplace activities.
Public sector entrepreneurship
This consists of the entrepreneurial activities that are all carried out by the government. These type of public sector entrepreneurial organizations aims to offer good services to the people of the nation. Generally, they act as a corporate entrepreneurial venture with the same sort of corporate entrepreneurial principles which helps them to manage the business efficiently.
It consists of the entrepreneurial activities that are mainly performed by the social organizations like NGOs, non-profit organizations and many more. The process assists in identifying various social issues which are mainly performed by the community and the implementation of entrepreneurial activities enable the organization in creating, finding, and managing various ventures.
These entrepreneurial activities are mainly performed by the research and academic institutions. It aims with innovation in enabling the organization to move towards the intellectual property rights. This type of entrepreneurship only exists in research and development enterprises.
P2 Explore the differences between different entrepreneurial ventures
The differences and similarities between two of the entrepreneurial ventures are discussed below:
Lifestyle entrepreneurship is termed as the purpose of an individual who forms a business venture not to make profits but to change the lifestyle. According to Boateng (2018), a lifestyle entrepreneur mainly focuses on the business rewards or sometimes they possess the business venture as their passion.
Social entrepreneurship defines the techniques through which organizations are allowed to fund, develop, and implement solutions to the environmental, social, and cultural issues within the organization. This entrepreneurship concept varies from organization to organization in terms of beliefs, size, and goals.
Profit-seekingThey do not tend to make profitsThey always tend to make profits
Exit strategyThey do not have any exit plan or strategyThey have an exit strategy
Working hourThey maintain a balance between work and lifeThey can work for more time for gaining more money
Donation They do not offer donationsThe rich organizations donate money in the form of charity
Organization goalThey do not focus towards the organizational goalThey focus towards the organizational goal
LO2 Explore the impact of small business on the economy
P3 Assess the relevant statistics and data to explain the impact of small or micro business on the economy
The role of entrepreneurship provides a contribution to the nation by developing its economic condition. The countries included are UK, USA, Australia and much more which offers many small or micro business ventures. It enhances the country's economic condition by identifying and creating many employment opportunities along with delivering innovative products and services to the customers. It creates a vast impact on both the local and national levels. According to Hussain et al. (2014), the development of entrepreneurship sees a revolution which has provided eighty percent new jobs in the small business sectors. Moreover, it has also been recorded that there are now more new innovative products and services for the customers as well. A small business comprises of merely five hundred employees. The economic role of the small business enterprises are as follows:
Fulfilling all the customer requirements
Dealing with risks to sustain in the market
Providing employment opportunities to skilled workers
Delivering innovative products
Contribution to the country’s economy in terms of financial help
Enhancing the rate of productivity
It creates impact at different levels in the following ways:
The UK is regarded as one of the developing countries in the world where there are many small business ventures that is becoming very much popular in order to enhance their market sustainability along with providing more employment opportunities. The recorded statistics offer the information of the existence of the number of business per persons is more in the parts of southern England than any other areas of UK. The total business accounted is more than ninety-five percent in various industrial sectors. With less than fifty employees a small business organization performs its operations as it is recorded in the business population of 2017. A medium sized business consists of merely thirty thousand employees. The small-sized organizations enjoy the economic growth when there are effective recruitments from local areas. In addition to that, the small business ventures focus to fulfill all the customer requirements along with offering the services at a very affordable rate.
At this level, the small organization's impacts on the country's GDP. We all know that small or micro business organizations offer significant contributions to the economy of the nation. The economic conditions get enhanced by the introduction of new value-added products and services. According to Jafar et al. (2017), the rate of employment also gets improved in different industrial sectors such as in the department of retail, construction etc. which is very much beneficial for the country's economy and the people. As a result, it allows the nation to become stable economically by possessing strong base for investors. The government is also taking initiative in offering help in terms of a loan to the small or micro business ventures with a very low-interest rate.
The regional areas offer high revenue generation by the activities of small or micro business ventures as the local customer's demands for their daily use products. Hence, living in these local markets helps in fulfilling the demands. It helps the market to become strong by enhancing the rate of self-employment in those regional areas. England possesses around four million private sectors in its different areas.
The contribution of SME is vast in this globalization era. According to Jahangiri et al. (2017), the technology, as well as the skills of the employees, are allowing the business ventures in achieving competitive advantage in the marketplace. Moreover, the global participation also enhances the international business activities which offer the scope to the people to avail the services of the organization globally.
P4 Explain the small business importance to the growth of social economy
SME offers a significant role in enhancing the economic condition of a country as they provide services to its customers at a very affordable price. In this modern technological era, the small business ventures prefer traditional business operations as the employees are more familiar with the existing workplace process. The small business ventures are owned independently. The organizational management team members manage the business operations in a systematic way which fulfills the customer requirements along with increasing the overall business profit and minimizing the production cost. Generally, small business ventures encourage the creativity mindset of the employee. They are the main innovative sources of emerging ideas where the entrepreneur takes various risks along with providing efficient workplace ideas that act as an advantage to the organization.
According to Jain and Singh (2017), small business ventures maintain a healthy relationship with the customers and communities. As a result, they need to offer products and services to the customers at a very affordable rate as they need to be very much honest towards its customers. Small business ventures offer new products and services by influencing much of the competitive market. Moreover, the small organization employees are being provided the most suitable learning experience.
The small business ventures take various risks for achieving rewards that benefit the overall organization and its members. It also offers more employment opportunities along with providing effective training procedures for the employees. Small business is very much important as they offer good job satisfaction to the employee which helps them to reduce the employee turnovers.
LO3 Determine and explain the key aspect of the mindset of an entrepreneur
P5 Explain the characteristics and skills of successful entrepreneurs that create a difference from the characteristics of managers
An entrepreneur is a person within an organization that deals with many risks for providing benefits to the organization in terms of increased profit. The entrepreneur acquires many ideas or effective information and converts them into another innovative idea in order to produce a new product or service for the customers. An entrepreneur modifies and alters many business functions or strategies which brings success to the business organization. According to Khazaeli et al. (2018), the main purpose of an entrepreneur is to build an own business along with performing effective leadership qualities within the organization. The entrepreneur has the desire to implement their own ideas that transform into reality by providing an effective advantage in the form of financial rewards.
The main feature that a successful entrepreneur possess is the passion to perform the business operations in an efficient manner. The passion comes from the entrepreneur self-belief which impacts many lives within the business industry. One of the main characteristics of an entrepreneur is to produce attractive services and products for the customers. They also focus to deliver the business activities that help the organization to achieve market sustainability. In small or micro business organizations, the rate of failure is very much high as they focus to produce new products or services for the organization as well as for the people of the nation. Microbusiness organizations always offer strong business ideas that help them to sustain in the marketplace.
An entrepreneur possesses the quality to overcome business challenges and bring success to the organization. They are of highly ambitious nature as they set strong goals for themselves. The entrepreneurs are very much efficient in staying committed towards their goals no matter how difficult it is to achieve. A successful entrepreneur needs to contain several effective opinions within themselves as they hold a strong personality within the organization.
The successful organizational entrepreneur needs to contain passion for bringing new necessary changes in terms of products and services. As a result, they need to offer high quality in terms of creativity, innovation, and resources. They form business strategies in a way that helps the organization to adopt the new market changes as the entrepreneurs are very much up to date with the latest evolution of the market.
A successful entrepreneur needs to contain high sources of energy for keeping themselves highly motivated which is very much beneficial for the organization. The entrepreneurs need to be motivated for encouraging the micro business ventures along with offering strategies that help the organization to sustain in the market. The self-motivation that the business entrepreneur possess helps them to keep track and monitor various challenges. A successful entrepreneur always focuses on improving the organization standards. However, it can be said that no one is born as a perfect entrepreneur as there are many common characteristics that form a successful entrepreneur.
P6 Explain how the aspect of entrepreneurial personality reflects the motivation and mindset of the entrepreneur
Motivation is considered as the drive which turns a person to focus on his/her goal. There are many theories that define motivation as it is the needs to be prepared on the ideas through which an individual is attaining a goal of the organization. The motive of entrepreneurship is to develop or alter business operational functions for improving the overall organization growth. The entrepreneur needs to acquire motivation by all the gathered knowledge which are to be presented in the form of a structure for better accessibility of the necessary information. This helps the entrepreneur to make fair and effective judgments. This also helps the organization by allowing to take necessary decisions for evaluation.
According to Mary et al. (2015), the personality of an entrepreneur mainly consists of the motivation and the mindset that fulfills all the requirements in small business ventures. Effective and fast entrepreneur development is very much beneficial in handling the critical business areas. Furthermore, an entrepreneur needs to offer creative thinking skills which help in the decision-making process as well as in the process of enhancing the efficiency of the business. As a result, it is quite obvious that both creativity and innovative ideas play a vital role in sustaining in the market.
LO4 Examine different environments that hinder or foster entrepreneurship
P7 Examine that how the experience and background can foster or hinder entrepreneurship. Give relevant examples.
The middle-class backgrounds produce more entrepreneurs in the market than other background classes. They offer good educational qualifications. According to Nguyen et al. (2015), the statistical record provides the information that seventy percent of the entrepreneurs are of middle-class backgrounds, thirty percent from the upper middle-class backgrounds, and thirty-five percent from the lower middle-class backgrounds. Moreover, there is more twenty percent of blue-collar employees who perform all the manual operations. The research data shows that there is only one percent of employees who possess either high-class backgrounds or poor class backgrounds.
For example, the founder of the KFC is Colonel Sanders who began the business as a mere entrepreneur by selling chicken fries at roadside restaurants. With implementing effective entrepreneurial skills, now he is associated with one of the global and popular food chains across the globe.
The report is the detailed summary of the different entrepreneurship and small business management that fosters the economy of a country. It can be concluded, that small business organization needs successful entrepreneurs in order to become successful in the marketplace. In this globalization era, small companies play a vital role in enhancing the economic conditions of the country in terms of identifying employment opportunities for the skilled employees. Moreover, the small business ventures focus on to improve the satisfaction of the customers. An entrepreneur needs to offer effective skills and qualities that help them in monitoring any challenges within the organization along with taking effective decisions that benefit the organization. The small business organizations tend to become the failure as they lack to offer the wages that the employees demand. As a result, the large organizations hire those skilled employees by providing high wages. However, SMEs offer the opportunity to the entrepreneurs for creating a healthy environment that helps in achieving success within the organization.
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