ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT

Table of ContentsIntroduction......................................................................................................................................2

LO1 Exploring range of venture types............................................................................................2

P1.Examining different types of entrepreneurial ventures (D1)......................................................2

Relation of Ventures and typology of entrepreneurship..................................................................7

P2. Exploring the similarities and differences of entrepreneurial ventures.....................................8

M1 Understanding the role of Entrepreneurial ventures in both the public and corporate Sector. .9

LO2 Assessing the impact of small businesses on economy.........................................................11

P3 Interpreting data and statistics to assess the impact of micro and small businesses on economy

.......................................................................................................................................................11

P4 Explaining significance of small businesses and business start-ups to the growth of small

economy (D2)................................................................................................................................13

M2 Evaluating differences of small, medium and large businesses..............................................16

Conclusion.....................................................................................................................................17

Reference list.................................................................................................................................18

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Introduction Entrepreneurship is an important aspect in innovating and starting-up new business using

creative imagination, funds and strategic planning. Entrepreneurship helps in creating profitable

or non-profitable business organization through designing and launching new business that is

termed as small business. The people using creative procedures running a new venture are

termed as entrepreneurs. The unit provides an insight into definition, scope, ventures of

entrepreneurship. It allows analysing barriers in venturing to business start-up. The unit assesses

entrepreneurial aspects in terms of balance of risk and reward and reflect entrepreneurial

characteristics in relation to Eddison. The unit determines entrepreneurship and small business in

alliance to Eddsion and his GE Group. Eddsion is popular for myriad of life challenge activities

that have influenced people across the world.

Part 1

LO1 Exploring range of venture types

P1.Examining different types of entrepreneurial ventures (D1)There are various forms of entrepreneurial ventures such as family firms or new family start-ups,

corporations, social enterprises that can be differentiated on entrepreneurship regime. The

activities of the entrepreneurs are based on distinguished activities in new ventures that are

reinvigorated through change and technology and mobilization.

Family owned firms

Family firms- family firms can be both private and public family operated firms.

Private family owned firms Operated by independent family

towards long-term investments

Aims at expanding family income

Provide employment opportunities to

family members and relatives

The operations of one generation is

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transferred on to another

Aims at providing best quality food and

services

Management is held through

knowledge, stability and trust among

family members (Adnan, 2014)

Public family owned firms The family owned public firms aims at

long-term investments and short-term

investments

They use family culture, ancestry as

source of brand identity

They aim at continuity of leadership

and has less takeover risk

Training his implanted on next

generation in enduring greater

resilience and commitment

They have greater flexibility and strong

leadership roles

Unlike private family owned firms they

aim at expanding business ensuring

public demand fulfilment

The barriers to family owned small firms are fear of abandonment, sibling ad house member

rivalry, is dilemma of choice and loss of power.

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Figure 1- Forms of family firms

(Source- Arief and Kartono, 2015)

The growth and scope of family or private businesses help in contributing to socio-economic

development, acts as spirit of entrepreneurship and concentrates on the welfare of family

members and general public. The scope of expansion relies on regional and local market supply

and distribution (Arief and Kartono, 2015).

Corporate entrepreneurship

Corporate entrepreneurship refers to a entrepreneurial venture where any individual or a group of

individuals attempts to associate with an existent- organization in enlarging business domain.

The entrepreneur with new possibility and strategic planning attempts to create new activities

aiming at profit earning (Mohamad et al. 2016). It is initiated by an individual/entrepreneur due

to responses to in current market environment and change in demands of customer preferences.

The entrepreneurial discovery of new opportunities is based on proactive measurement of

finance, innovative techniques and tools, stakeholders and appropriate decision-making (Xie and

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Chen,2014). The corporate ventures branches onto strategic venturing and internal and external

corporate venturing. The features of corporate entrepreneurial venturing are-

Organization renewal/creation

Instigated by change and new approaches

Function resides within the domain of organization

They have structural autonomy developing extent and nature of innovation and

sponsorship

Have strong business portfolio

Exploits current availability of resources and product offerings

Figure 2- Attributes of corporate entrepreneurship

(Source- Idris et al. 2014)

The growth and scope of corporate entrepreneurship contributes to vision-directed activities with

wide-reliance on the behaviour, initiation and innovation of entrepreneurs. They help in shaping

organizational structure and scope of operates exploiting entrepreneurial opportunity. They help

in development of individual skills and bridges the gap between leaders and entrepreneurial

vision.

Management buyouts

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Management buyouts attempts to create new independent entity. The entity is created under the

supervision of management and private equity (PE) firms. In building the new entity it depends

on substantial funding extracted from banks (Nishanka et al. 2014). In this case the private

equity firms acts as major investors that elects board members developing contractual

restrictions. They help in strengthening behaviour of management and records information

through reporting requirements.

The features of management buyouts are mentioned below-

The new venture is based on financial arrangements and using systematic data and

information

They depend on bureaucratic procedures catering to innovative approaches and limiting

competitive risk.

They use strong decisions in renewing competitive capabilities

There is flexibility in leveraging and monitoring financial conditions

The growth and scope of Management buyouts depends on management incentives and savings.

They help in expanding efficient decision making process towards interest expense and private

ownership. They grow by taking over defence and eliminating public investors (Aaijaz and

Ibrahim, 2017).

Academic Spin offs

The academic spin offs can be distinguished from the activities based on commercial context. To

be specific, the non-commercial activities within the setting of university enlarge the domain to

create spin-off firms. This help in shifting activities, inventions, funds in developing activities of

the laboratory in creating marketplace (Gurung, 2017). Academic spin-off firms differ in terms

of project, laboratory space and amenities and attempts of development towards significant

capital gains. The features of academic spinoffs are listed below-

It use institutional link focusing on prestige research group and formal involvement

It helps in creating worldwide recognition valuing the priorities of customers

The prospector type is based on both investor and market acceptance

They us IP marketing strategy, acquisition strategy in optimizing profit

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Relying on subsidies, debt financing and external sources equity

It attempt to integrate partnerships among capital stakeholders, and technology providers

They conduct both the operations of university alongside participating in venture as part

time

There are four critical junctures of academic spin off such as credibility, entrepreneurial

commitment, opportunity recognition and sustainable returns

The growth of academic spin offs lie in adopting new IP that is associated with multi-

dimensional marketing strategy. Their scope increases with flexibility operating with different

strategic procedures and adopting early stage technologies.

Social enterprises

Social entrepreneurship helps in identifying a social problem or issue and mitigating them and

developing social welfare programs. They help in determining new activities towards social

benefits by organizing, creating new social venture towards driving social and environmental

change (Mohamad et al. 2016). The entrepreneur aiming at social ventures and development

helps in extracting positive returns to society. They can be either profit or non-profit

organization aiming at benefiting the society to a larger extent. The social business structure

develops with increase involvement of community people and independence from donors. Their

scope increases with discretionary expenditure and right business model.

Relation of Ventures and typology of entrepreneurshipThere are four strong typologies of entrepreneurship concerning young innovators, revitalised

innovators, natural entrepreneur and time-honoured traditionalists. The young innovators are

enthusiastic in approaching new investment and are willing to take risks in establishing

themselves within the business world. They are mostly associated with family firms or small-

scale business (Arief and Kartono, 2015). The revitalised tycoons are of age 30-50 and are

experienced. In investing their payment and experience, entrepreneurs aim at constructing their

own path towards profit earning. The natural entrepreneur comprise of experienced and

motivated individuals aiming at enlarging their business activities in corporate sector. They

believe in proclaiming success towards exhilarating experience. The time-honoured

traditionalists are senior groups who invest their income generated from their career in

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developing something of their own. The social enterprises are majorly controlled by time-

honoured traditionalists.

P2. Exploring the similarities and differences of entrepreneurial venturesSimilarities Differences

The different entrepreneurial ventures

contribute to socio-economic integration and

development

The business organization differs in terms of

size. The private and public owned enterprise

is small in structure as compared to corporate

companies.

They provide employment opportunities on the

local, regional and national level

The activities of small scale are private or

family owned in sustaining small group of

individuals

The corporate organizations and academic spin

offs aim at enlarging business domain

sustaining the needs of global audience

They are both profit- or non-profit oriented The employee size is another factor that help

distinguishing the types of ventures. The small

scale organizations of family firms involve

maximum 5 employees, following academic

spin offs with 10, corporate firms with more

than 20 and large companies expanding to

thousands. The social enterprises deal with

community members enlarging domain across

regional and local level (Mohebi and

Farzollahzade, 2014).

Employee or members have major role to play The investments made in family firms and

academic spin offs are lower as compared to

management buyouts and social enterprises

They adhere to short-term and long-term

benefits

The decisions made in family firms are taken

by family members while corporate and large

company aims at making decisions including

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owner, manager leader, executive and

shareholders.

The activities are based on identification of

opportunities, vision and funds

the corporate firms and academic spin offs

have complex structure of functional units such

as sales and marketing, finance and accounting,

IT, technology, HRM designing, promotion,

customer service and more

M1 Understanding the role of Entrepreneurial ventures in both the public and corporate SectorThe entrepreneurship activities aim at benefiting public and corporate sectors. Most importantly

it is important to see institutions or fields of entrepreneurs facilitating the activities. The public

sector includes Universities and tertiary educational institutions, R&D agencies, municipalities,

SME support agencies and incubators. The private sector includes higher learning institutions,

business associations, venture capital and credit unions. The corporate sector include

development foundations, community-based organizations, non-profit organizations and IT

sector.

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Figure 3- Institutions facilitating entrepreneurship

(Source- Mohebi and Farzollahzade, 2014)

Undertaking corporate entrepreneurship is a complex task that involves proper arrangement of

funds and heavy recruitment and selection. The entrepreneur need to create corporate venture

ecosystem by identifying and tracking innovative start ups, gain market intelligence by creating

global window and use of creative technologies, make strategic decisions by expanding market

synergies, investments and acquisitions in meeting target for investment or acquisition (Mohebi

and Farzollahzade, 2014). The entrepreneur help in managing partnerships through revenue

sources and using advance strategic objectives (Alessa, 2018). Within corporate setting, the

entrepreneur requires reporting to upper level management using actionable data and assessing

current market trends.

The entrepreneur within public venture need not have government permission in setting up of

business activities, formed towards short-term and long-term beneficiaries improving programs

and initiatives towards company growth. The entrepreneur develops new models and approaches

in expanding performed evaluations.

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LO2 Assessing the impact of small businesses on economy

P3 Interpreting data and statistics to assess the impact of micro and small businesses on economy

Figure 4- Value added SMES

(Source- Zafar et al. 2017)

From the above graphs, it is illustrated that UK experiences a growth in the emergence of SME

since 2014 to current period. The SME experience an increase of 30 percent contributing to the

economy of United Kingdom at large. According to the index, 2008 experience 100 expanding to

140 in 2015.

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Figure 5- Illustration of start-up rate

(Source- Zafar et al. 2017)

As per the graph, UK experience subtle growth with an average of 12 percent. There has been no

severe downfall affecting the market structure unlike France. Germany experience growth for a

certain period of time on an average of 7 percent that experienced a successive fall. UK has a

tough competition with U.S and France that experience a growth of SME and start ups of 11

percent and 13 percent respectively.

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Figure 6- Number of persons employed in SMES

(Source- Griffiths and Wall, 2011)

The graph illustrates the employment ratio in two countries concentrating UK and European

Union. The United Kingdom experiences a percent of 8 in comparison to EU. The index of 2015

rises to 100 is expanding until 2018 contributing to the growth of economy. The SME comprise

of 90 percent of business sector contributing 80 percent of GDP. UK experience an average of 60

percent of new entrants within the market setting.

P4 Explaining significance of small businesses and business start-ups to the growth of small economy (D2)Small businesses act as the backbone to UK economy. They have facilitated economy, socio-

cultural structured and increased employment rate. They act as driving spirit allowing opening of

new markets and opportunities of jobs. Simultaneously, Eddison in his Electric Generic has been

contributing to a larger extent. He has benefited people on local, regional and global level as his

inventions penetrated to the global usage and beneficiaries. Similarly the SME in UK yields as

seedbeds towards innovation. UK since 2014 has been experiencing a major growth that can be

related to expansion caused with the start-up invention of Eddison. Eddison highly encouraged

market competition and battled with community disadvantage by bringing in fresh ideas. His

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expansion and enlarge the scope of businesses and challenge the status quo. He became the

stimulus to major entrepreneurs of SMEs. ‘

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Local

Small businesses have created a

profitable regime uplifting the socio-

economic structure of the country it

operates. They help local entrepreneurs

and leaders to flourish and expand.

They provide knowledge of experience

to local people (Carter and Jones-

Evans, 2012).

They help in providing customer

satisfaction, and develop employee

engagement.

They broadens the scope of new

markets and continues to support local

suppliers and distributors

Regional On the regional level, it helps building Standards of product quality, management systems in delivering good quality service.

They help developing business processes for start ups and build employment opportunities for new people

National They help in contributing to GDP and economy of the nation facilitating national growth (Down, 2010).

They help in building confidence of entrepreneurs working at national level.

They act as associations in supporting new organizations by improving economy.

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International On the international level, foreign investor and entrepreneurs are attracted in investing and start- up new business (Burns, 2011).

They attract foreign trading, investments and expansion opportunities creating positive economic outlook

They allow employment opportunity for international skilled labours increasing relationship beyond national boundaries

M2 Evaluating differences of small, medium and large businesses Small Medium Large

Employee size is less than 5 Employee size is similar to

small enterprise and less than

7

Employee size is more than 10

Attempts to sustain and gain

profit for the family

Attempts to benefit the family

or group of individuals

associated

Attempts towards expansion

and benefiting the customers

and employees at large

Require less promotional

activities as they work at local

and regional level;

Aims at operating within

domestic channel while

contributing to the economy of

nation

Operates at national and

international level pertaining

to the need so national and

global customers

Acquires short term and long

terms goals

Acquires short term goals Acquire long term gaols

Independent working system Independent working system Interdependent working

system with the involvement

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of stakeholders in decision-

making and problem-solving

methods

Utilise local resources and

lesser funds

Require local and regional

resources with lesser funds

Large investments and

allowing foreign investment

towards expansion

Family-centric and is both

private and public owned

firms

Private owned firms Private owned firms

Adhering to no legal policy

and procedures and has no

government intervention

Adhering to no legal policy

and procedures and has no

government intervention

Adhering to different policy

and procedures, code of

conduct, code of practices and

allow government

intervention.

Conclusion The scarlet fever caused him ear infection resulting in deafness and also affected his schooling.

He was taught by his mother wand late self-taught. It his self-treatment and teaching that

motivated him taking his new business initiative. He was inclined to science, conducting small

experiments based on his acquired knowledge, developing new phenomenon and instruments

boost his confidence and innovation. He began his entrepreneurial career buy building up New

Jersey using automatic repeater and integrated telegraphic devices. This brought him experience

and name among his society. Sooner, his small ventures, experiments and continuous learning

led him to the invention phonograph in 1877 that gained him popularity. His great

accomplishment named him ‘The Wizard of Menlo Park,”. Sooner using his innovative stability

he founded General electric that allowed him in building an organisation of his own. He has

influenced the young entrepreneurs across the world.

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