Introduction Of Entrepreneurship and Small Business Management Assignment
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Accenture plc. Provides consultancy services to small businesses and budding entrepreneurs. Entrepreneurship is extensively promoted by governments for numerous benefits that it encompasses. Entrepreneurship enables people to create employment rather than look for employment opportunities. Starting a business is a risky but profitable affair that creates value and helps to strengthen the economy. There are majorly four types of entrepreneurial business ventures with distinct features but the same objective of growth, prosperity, and sustainability. Small businesses have been tremendously transformed and supported lingering economies by creating and transacting values (Dilli, Elert, and Herrmann, 2018).
Entrepreneurial Business Ventures
Small Business Entrepreneurship- These include local business ventures such as opening a salon, carpenters, electricians, or opening a local shop. These are generally in the form of a sole proprietorship or family business. One of the most popular ventures in the pandemic was the manufacturing and selling of masks, sanitizers, and disinfectants. Sully cycles are a bike repairing shop in Bristol that provides amiable and quality services to its clients (Dilli, Elert, and Herrmann, 2018). This can be seen as necessity entrepreneurship as it involved rendering choices demanded by people and not by the choice of the owner.
Business Environment- Small Businesses are extensively affected by the cultural and economic environment. the type of business venture is affected by the industry's condition. In the Covid period, the entertainment and leisure industry was badly hit. Salons and cafes were shut down and suffered a loss (Stoica, Roman, and Rusu, 2020). The size of these firms is small and growth is limited to the extent of capital invested.
Scalable Startup entrepreneurship- Scalable entrepreneurship depends on innovation and creativity that can sell distinctive value in the market. This entrepreneurship requires capital investment by investors and can include sole proprietorship, General partnership, or starting a company. Yellow Dog a startup in Bristol provides computing services to its clients and is one of the most in the UK (Dilli, Elert, and Herrmann, 2018). These firms are lifestyle entrepreneurship as these include innovating and creating value out of passion and not merely for profit.
Business Environment- Scalable Startup like Yellow Dog is extensively affected by the legal and economic environment because it needs funding from the market which is highly volatile. The growth is possible if the value created has high demand (Meyer and de Jongh, 2018).
Large Company entrepreneurship- These ventures are limited due to the demand for enormous capital investment and high-risk factors. But these companies have sustained with effective management of resources and selling of value created by innovation. Graphcore is a startup that focuses on developing Ai-oriented microprocessors and machine learning applications (Dilli, Elert, and Herrmann, 2018). These companies are large and more stable financially and can be termed as lifestyle entrepreneurship.
Business Environment- Large companies are affected by the political environment because these can affect the operations by making new laws and rules.
Social Entrepreneurship- This type of entrepreneurship focuses on services rather than profit. These provide the link between the value created through innovation and the segment that is deprived of these values due to financial and other economical constraints. Pathways CIC is a social entrepreneurial startup in the West of England that works in the area of health and wellbeing (Stoica, Roman, and Rusu, 2020). These can be termed as social enterprises as these are started with a service motive
Business Environment- These business ventures are affected by cultural and environmental factors such as the need for social upliftment and cause to address an issue like domestic violence, mental health, and like (Meyer and de Jongh, 2018).
The impact upon the economy
Small Business Entrepreneurship has been strengthening the UK's economy by the creation of jobs and values simultaneously. Regulation of value and money flow in the economy is significantly contributed by SMEs as it generates approximately 39% of the total revenue. Entrepreneurship has been adding and strengthening the UK’s economy and has extensively contributed to the creation and flow of money (Adler et al., 2019).
Large company entrepreneurship opportunities are fewer in comparison with SME’s but its contribution is huge as it has the value to be transacted across economies.
The economy depends on small businesses to make the country self-sufficient and rely less on imports. Capacity building has been assisted by the small startups in the area of green technology, AI, market intelligence, hospitality, and tourism (Adler et al., 2019).
Similarities among various types of entrepreneurship
Small entrepreneurship and social entrepreneurship are opted by both males and females as the finance is small and the risk factor is generally lower and females are becoming more confident. Serial entrepreneurship and intrapreneurship both work on a new idea for developing values for marketing. Small entrepreneurship and scalable entrepreneurship are directed by a certain goal that involves offering value to the company.
Dissimilarities among various types of entrepreneurship
Serial entrepreneurs sell off their ventures to big companies whereas intrapreneurs are the employees who innovate the value to offer in the market. Female entrepreneurs tend to avoid risk to the maximum extent whereas male entrepreneurs are more willing to take risks. The owner of the small enterprise is the sole entrepreneur whereas, in scalable entrepreneurship, the manager plays a vital role in creating and facilitating the value creation on large scale (Adler et al., 2019).
Micro-level impact of small businesses on the economy
Flexibility- Small businesses enable the economy to become flexible and diversify in value creation at a micro-level. Flexibility is vital to beat recession as value is created according to the situation and demand. Small businesses can be efficiently modified according to situations (Meyer and de Jongh, 2018).
Meeting local demand- small businesses help to meet the local and distinctive demands of individuals. It is handled efficiently by small businesses as they can directly contact their customers.
Macro-level impact of small businesses on the economy
Investment in the economy- small businesses accelerate investment by big giants as well as middle-class people that help in the regulation of money flow in the market. About 47% of the total income in the UK economy comprises that of SMEs.
Employment generation- Employment generation is extensively aided by SME's and startups. The net growth in employability through SMEs is 1.8% in the UK. Local vendors and SME's have employed nearly 60% of the UK's population. The UK has a base of 25 million SMEs (Meyer and de Jongh, 2018).
Socio-economic condition- Small-scale entrepreneurship and social entrepreneurship have been prominent tools to address economic and social crises such as socio-economic gap, unemployment, and poverty. More and More people are taking risks and starting their ventures (Adler et al., 2019).
This figure shows the expenditure of SMEs in contrast to big giants.
This figure shows the turnover of enterprises according to their sizes.
This chart shows the SMEs that recruited less than 250 employees yielded higher turnover than big companies.
This chart shows the adaptive capability which increases at a higher rate in young companies than in mature companies. The adaptive capability and performance increase simultaneously at a healthier rate in small companies.
Significance of SME
Small and medium-sized enterprises and various business ventures help the economy in numerous ways-
- It helps the economy to combat socio-economic issues such as employability and poverty by creating transactional value.
- Self-sufficient nation- It helps in building a self-sufficient nation and reduces reliance on exports and foreign direct investments. It helps the nation to manage its portfolio investment in other countries without losing control over major decisions regarding industries (Meyer and de Jongh, 2018).
SMEs can enhance social economy such as cooperative mutual, social enterprises by creating a symbiotic relationship that will help the people generate value that adds to the GDP at the macro level. The growth rate of small and micro firms is faster than large-cap companies because these have already reached a saturation point where the profit growth is either sluggish or stagnant. From the above diagrams, it can be discerned that high potential is seen in the small and micro firms to grow and innovate according to the needs of local people. sustainability is, however, questionable because small entrepreneurs have to put in extra efforts due to a lack of brand recognition and trust in the market. However, due to better knowledge about local and regional markets, these firms can create and innovate more efficiently than big companies (Stoica, Roman, and Rusu, 2020).
The above report focuses on the different types of business ventures that led to the strengthening of the UK's economy and generate transactional values. Small and medium-sized businesses lead to the creation of employability and address socio-economic issues. It discussed the impact of small businesses and start-ups on micro and macro-economic levels of the state and the significance of entrepreneurship in aiding several economic issues.
Adler, P., Florida, R., King, K. and Mellander, C., 2019. The city and high-tech startups: The spatial organization of Schumpeterian entrepreneurship. Cities, 87, pp.121-130.
Dilli, S., Elert, N. and Herrmann, A.M., 2018. Varieties of entrepreneurship: exploring the institutional foundations of different entrepreneurship types through ‘Varieties-of-Capitalism’arguments. Small Business Economics, 51(2), pp.293-320.
Meyer, N. and de Jongh, J., 2018. The importance of entrepreneurship as a contributing factor to economic growth and development: The case of selected European countries. Journal of Economics and Behavioral Studies, 10(4 (J)), pp.287-299.
Stoica, O., Roman, A. and Rusu, V.D., 2020. The nexus between entrepreneurship and economic growth: A comparati