Entrepreneurship and small business management

Introduction

Entrepreneurship is described as the process of creating or extracting value. With this concept, entrepreneurship is defined as a process of reform that involves more challenge than is typically associated with launching a company and could contain values other than financial ones (Hisrich et al, 2017). Small companies are independently formed companies, partnerships, or sole proprietorships with lesser staff and/or lower annual sales than a larger company or industry (Burns, 2016). This paper addresses the data that is required for the establishing of a small company. The kinds of entrepreneurship projects are discussed in this paper This paper also highlights how entrepreneurial spirit is viewed in both the finance and non-finance fields. This report also looks at the economic effects of small businesses. This article examines some information and figures to demonstrate the economic effect of businesses, which demonstrates the significance of market startups in the development of the global economy. In order to broaden the customer's experience this article discusses entrepreneurship attributes as well as abilities. This report identifies the mentality of established entrepreneurs in order to help customers better understand how to begin a small business.

LO1

Explore and illustrate the range of venture types that might be considered entrepreneurial.

It is the practise of starting a company and undertaking investment risk in order to benefit from it. Developing great possibilities or concepts to generate social, financial, and political value by creating, launching, as well as operating a new company or organisation is often part of this practise (Kuratko and Hodgetts, 1997). The entrepreneur is the person who starts and operates a company, takes on all of the dangers, as well as reaps the benefits of the enterprise. Entrepreneurs create new goods, facilities, and innovations. Entrepreneurs take chances in order to be awarded with money.

Types of Entrepreneurship:

Entrepreneurship could be divided into 3 categories

  • Individual entrepreneurship
  • Corporate entrepreneurship
  • Public sector entrepreneurship

Individual entrepreneurship: Individual entrepreneurship is carrying out personally by one individual on the grounds of properties that he owns under the right of possession, as well as another right that allows them to utilize as well as (or) dispose of that asset (Stam and Van Stel, 2011).

Corporate entrepreneurship: Corporate entrepreneurship (Intrapreneurship) is a method of creating new companies, goods, facilities, or procedures within an established enterprise in order to add value as well as increase revenues.

Public sector entrepreneurship: The creation of innovative public sector projects that turn a status quo cultural - financial climate into something that is increasingly conducive to creative reform in the midst of ambiguity is referred to as public sector entrepreneurship.

Types of Entrepreneurial Ventures:

Start-up: A start-up is a new business created by one or maybe more entrepreneurs with the aim of developing as well as marketing a new item or facility (Kuratko, 2009). The traditional start-up is, by definition, a shoestring project, with primary financing provided by the developers or their mates and family.

Acquisition: An acquisition occurs when a business buys the majority or even all of the stock of another business in order to take ownership of that firm. Acquisitions, that are very popular in market, could take place with or without the targeted firm's consent.

Joint venture: A joint venture is a corporate organisation formed by two or several entities that has shared ownership, dividends, as well as dangers, as well as shared governance.

Public–private partnership: A public–private partnership (PPP) is a long-term contractual relationship among two or maybe more public and private sectors. In other terms, it entails the collaboration between government and industry to finish a task and/or offer facilities to the general public.

Relationship between “types of entrepreneurship” and “types of entrepreneurship ventures”

Personal entrepreneurs create start-up companies. Since acquisition is the purchase of an established company, it necessitates the participation from both individuals and corporations entrepreneurs. Both entrepreneurs as well as corporate enterprises are required to deliver goods to various companies or to franchise (Sexton and Smilor, 1986). In the enterprise, both public and private entrepreneurs will create new market growth. A joint venture may also be formed by a corporation as well as a group of public entrepreneurs. Corporate and public entrepreneurship should work together to form public and private partnerships.

LO2

Assess the impact of small business on the economy.

SMEs impact on the economy

SME's have a tendency to change the job situation. Based on a 2015 estimate, 600 million jobs will be needed across the world in the next 15 years. The most of jobs which are linked to business growth are associated with SMEs. Despite their positive contributions to the world economy, part of SMEs experience capital and financial expenditure shortages (Schaper et al, 2010). Small and medium-sized businesses (SMEs) contribute 33 percent of international incomes as well as accounts for 45 percent of global jobs. SMEs make up 99 percent of all businesses in all nations. Small and medium-sized businesses plays an important part in driving economic development by offering employment opportunities to a large amount of people. All can be accomplished with the aid of SMEs, from creating wealth to alleviating poverty.

The new entrepreneurs value their employees' creativity and grant them complete independence to create their goods and enhance the facilities they provide. SMEs agree that item modifications should be made in response to evolving consumer demands, and as a result, SMEs are serving as a downturn buffer. SMEs account for 4% of the company population in both the United Kingdom and Switzerland. SMEs contribute to poverty reduction by creating jobs for individuals. Despite their positive contributions to the world economy, unlike the bugs industry, they sometimes experience a scarcity of financial resources.

SMEs importance in the growth of Social Economy

In the year 2012, the overall amount of SMEs in the local economy was 805,085 which is visible. Small and medium-sized enterprises (SMEs) made up the bulk of private sector companies. It was calculated that this amount was 99.8%. Small and medium-sized businesses (SMEs) hired 49.8% of the 2.3 million individuals working in London. As a result, SMEs helped to alleviate poverty to a certain degree. The overall turnover of company in London as provided by SMEs was £430 billion, representing 47.7% of overall turnover. This did not include the insurance and banking industries. Small and medium-sized businesses (SMEs) plays a critical part in the development of the UK's local economy, accounting for 47 percent of total sales. These SMEs will increase efficiency on a large scale. They concentrate on market analysis as well as creativity so that item creation could be based on the demands of the consumer. In the United Kingdom, 60% of individuals work in private occupations in which they can develop their abilities and gain further experience.

Small and medium-sized businesses (SMEs) are considered to play a significant part in the development of the social economy by generating economic advantages. These SMEs cover economic fields which are not prioritised by the public and private industries. It is estimated that 100,000 social companies in the United Kingdom contribute £60 billion to the UK economy each year. There are 5000 major social companies and also the remainder are medium-sized businesses among the other. Furthermore, social companies account for 6% of jobs in Europe, with the UK's share being 5.6 percent, which is lesser than the rest of the continent. These businesses assist people in improving their abilities by offering appropriate instruction. Besides that, this kind of organization's involvement could be seen in the country's organizational change as well as successful economy. Economic efficiency increases as these businesses stay competitive with profit-oriented businesses. The connection among the environment and the community in which company functions is a major variable, according to the International Organization for Standardization (ISO) guidelines. This norm is met by SMEs, which improves total efficiency.

It is important for businesses to concentrate on their CSR efforts. SME's have jobs for society's citizens.

LO3

Determine and assess the key aspects of an entrepreneurial mindset.

Personal characteristics and skills:

Entrepreneurs must possess certain individual characteristics in order to operate a company. These abilities can aid the entrepreneur in effectively communicating with the company's workers (Perrini, 2006). The abilities also assist the entrepreneur in motivating workers in order to avoid staff turnover. Entrepreneurial abilities entail time management, performance, as well as reliability in order to run a company effectively and profitably.

Self-confidence: Entrepreneurs should have a high level of trust in creating new businesses; as a result, the company will achieve high levels of profitability. Workers could comfortably depend on them and perform well in the workplace.

Openness to change: They are flexible enough in the current company to modify their goods and facilities. This would enable the company achieve a competitive edge as well as ensure its long-term viability.

Highly motivated: The entrepreneurs would be extremely encouraged, also they would be able to persuade other workers to remain with the company. Furthermore, they are seldom employed to achieve a feeling of fulfilment after completing their objectives.

Accepting fair criticism: Entrepreneurs possess the ability to take harsh feedback in the workplace. If there is a problem with the business and also the workers are debating weaknesses in the business, the entrepreneur must solve the problem and also be honest in their choices.

Skills of successful entrepreneurs

Communication skills: To avoid worker turnover, the entrepreneur should have excellent communications abilities as well as the person should have enough ability to ensure good communication between the workers (Oosterbeek et al, 2010). Entrepreneurs may use collaboration to improve their relationships with consumers as well as distributors.

Decision making skills: In difficult situations, the entrepreneur requires decision-making abilities, which aids productivity in corporate organizations.

Human relation skills: The entrepreneur must have positive relationships with his or her distributors and workers. Workers may be given non-monetary incentives to encourage people to work hard for the greater good of the company.

Problem solving skills: This is a capability that entrepreneurs must need in order to tackle challenges in difficult situations. They must fix issues in the workplace, and they could do that by conducting a study or conducting an interaction with workers as well as customers. The entrepreneur could resolve the problems, and the company will recoup its losses.

Entrepreneurs are born or made: Personal qualities as well as abilities could be used to create entrepreneurs. They have the ability to inspire their staff to lead the company efficiently. The key characteristic of an entrepreneur is the ability to create innovative products, services, or technologies. Entrepreneurs may have the necessary expertise to operate a successful company.

Examples of real successful entrepreneurs:

Richard Branson is a professional entrepreneur who possesses the below qualities and abilities:

  • Innovative thinking capability
  • Maintaining a healthy work environment.
  • Delegation skills
  • Workers eager to know as well as listen
  • Ability to make decisions
  • Dedicated worker

Mindset of successful entrepreneurs

Not missing opportunities: Efficient entrepreneurs has the ability to expand their businesses. The person doesn't really pass up any opportunity to expand his company. Efficient entrepreneurs seldom turn down a small or medium chance because they believe that even a small or minimal chance has the potential to shape the vision, mission, and ambitions of their specific organisations to some extent.

Taking responsibility: The entrepreneur possesses the ability to carry on both pleasant and unpleasant responsibilities within the company (Cooney, 2012). Trying to take on a variety of tasks competently comes underneath the mentality of a truly effective entrepreneur in a variety of situations. From studying multiple perspectives of efficient entrepreneurs, it has been discovered that they often assume responsibility for various creative concepts as well as their own institution's vision, purpose, and aim. Furthermore, it has been found in many cases that entrepreneurs typically bear full liability if their creative goods or facilities do not meet the criteria and desires of their target market.

Positive thought: When making a choice, the entrepreneur still thinks positively. The person believes in himself as well as their actions, and he is secure in their choices. Various entrepreneurs will make significant improvements at their regulatory workspace with the aid of successful positive thinking, allowing them to achieve their individual and career goals. Furthermore, optimistic mind enable various entrepreneurs to form successful perspectives on their entire workforce, that would eventually assist him in achieving their personal objectives.

Staying motivated: A good entrepreneur is driven sufficient to inspire others to join the business. Efficient entrepreneurs typically possess a variety of motivating variables that significantly aid these entrepreneurs as well as their employees in achieving their goals through a variety of dynamic workplace practices at a particular level of complexity (Lazear, 2004). Furthermore, it is normal that becoming an efficient entrepreneur comes with a slew of different responsibilities. It shows that, amid various obstacles and difficult circumstances, impactful entrepreneurs are still inspired in their work roles.

Situational factors to shape entrepreneurial mindset:

Unemployment: The entrepreneur should consider the most important variable. Since the entrepreneur usually makes the best decisions, the company should make a profit as well as the poverty issue can be fixed.

Home and family commitments: The entrepreneurs comes from various cultures and also have varying responsibilities to their communities. As a result, the mentality could be formed in accordance with their dedication (Belousova et al, 2020). The challenge of striking a proper balance among job and family has been identified as one of the main important situational components that form the total mentality of efficient entrepreneurs in some countries. It is understandable that when employed in a workplace for a set duration of time, it is almost difficult to balance work and family obligations. It has a huge impact on the concept of establishing new market sectors, which, in turn, aids in the development of efficient entrepreneurs to some extent. Even then, prior to actually embarking on the journey of becoming an entrepreneur, it is essential to have a solid business concept.

Cultural differences: Since various entrepreneurs comes from various social backgrounds, their beliefs about the company vary as well. Furthermore, community influences the attitude, way of thinking, as well as other characteristics of an efficient entrepreneur to some extent. Furthermore, because a person's total value, belief, as well as personality features are largely shaped by their cultural elements, it is only normal that culture has a significant part in defining total entrepreneurship practices.

LO4

Examine the different environments that foster or hinder entrepreneurship

Background factors real entrepreneurs

Personal background: Jamsetji Nusserwanji Tata was born to a Zoroastrian home in Navsari on March 3, 1839. He founded the Tata Group as well as pioneered the Indian industrialist philosophy. He was raised in the Indian city of Baroda and is known as the "Father of Indian Industry." He was also highly popular in the whole world's business. He began his career as a businessman before deciding to alter the way businesses are conducted in current marketplace. In addition, he was among the most significant developers in the history of India.

Education: Jamsetji Tata travelled to Europe and America to learn about steel production. He also learned about the innovations that can be used to improve his market.

Experience: He was considered to operate in his father's company till he was 29 years old. In 1868, he established his trading company. During his lifespan, he was effective in establishing an electricity-equipped hotel in Bombay (Gras, 1949). He travelled to China on a continual basis because his father did exports and imports company there. He went to China to learn about the existing trades as well as activities of the local and national economies at a particular stage. Furthermore, his travel to China and operate on his father's farm had aided him significantly in reducing dangers related with entrepreneurship.

Social environment: Tata was raised in an entrepreneurial family. His father was the owner of a trade company where he operated till he was 29 years old. His sister married a Bombay trader who assisted in the formation of the Tata community. He was born during a period when the economy was unstable, resulting in poor living circumstances. Even so, he noticed that the growth of large as well as public organisations in other countries is boosting their economic prospects, that inspired him to pursue an entrepreneurial venture.

Link between characteristics and background of entrepreneur: Tata grew up in an entrepreneurial family, as his father ran his own company. Going to work with his father provided him with valuable experiences. He put his previous knowledge to good use when establishing his trading business. He learned how to utilize the newest technology from Europe in attempt to improve his entrepreneurial abilities as well as market. The total history of an entrepreneur, such as Tata, is often linked to his personality traits. It has been noted that because Tata came from a family which promotes new business concepts to a larger extent, his qualities are naturally formed in line with their social setting to a considerable extent.

Reward: For starting a new company, entrepreneurs could receive non-monetary incentives. They will instil a feeling of fulfilment in entrepreneurs, motivating them to operate further in attempt to achieve their organizational goal. When an entrepreneur introduces their item for the first time, they feel a feeling of accomplishment. Feedback from customers is a type of incentive that could be used to improve the startup company. Positive feedback will boost their self-esteem and motivate them to reach greater goals. The benefits of starting a company are usually abstract, however they motivate the entrepreneur to achieve his or her objectives. One of the most appealing aspects of being an entrepreneur would be that it encourages people to pursue careers in areas that they are passionate about. Furthermore, entrepreneurship could be highly beneficial in terms of obtaining sufficient fulfillment with their work duties and responsibilities. Furthermore, sufficient financing is the secret to all of the benefits that entrepreneurs could obtain.

Risks of business start-up: In the scenario of company start-ups, item threat could arise due to a shortage of trust in the right item to be developed in order to seize the competitive environment. The opening of a start-up company's goods could be fraught with market challenges, such as if the item could captivate the target market. Failure is a possibility that must not be overlooked. Furthermore, one of the most significant disadvantages of entrepreneurship is that it discourages employers from delivering salaries to their entire workforce. Furthermore, entrepreneurs rely heavily on individual capital, that may pose certain challenges. The benefits of starting a company are abstract in nature. It primarily serves to inspire entrepreneurs to accomplish their company objectives. Even then, there are many challenges that come with starting a company. Financial challenges, commodity risk, business challenge, as well as implementation challenge are all examples of these threats.

Conclusion

Entrepreneurship is described as the process of creating or extracting value. With this concept, entrepreneurship is defined as a process of reform that involves more challenge than is typically associated with launching a company and could contain values other than financial ones (Cunningham and Lischeron, 1991). Small companies are independently formed companies, partnerships, or sole proprietorships with lesser staff and/or lower annual sales than a larger company or industry (Storey, 2016). This paper has addressed the data that is required for the establishing of a small company. The kinds of entrepreneurship projects have been discussed in this paper This paper has also highlighted how entrepreneurial spirit is viewed in both the finance and non-finance fields. This report has also looked at the economic effects of small businesses. This article has examined some information and figures to demonstrate the economic effect of businesses, which demonstrates the significance of market start-ups in the development of the global economy. In order to broaden the customer's experience this article has discussed entrepreneurship attributes as well as abilities. This report also has identified the mentality of established entrepreneurs in order to help customers better understand how to begin a small business.

Reference

Belousova, O., Hattenberg, D.Y. and Gailly, B., 2020. Corporate entrepreneurship: from structures to mindset. In Organizational mindset of entrepreneurship (pp. 211-233). Springer, Cham.

Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.

Cooney, T.M., 2012, November. Entrepreneurship skills for growth-orientated businesses. In Report for the Workshop on ‘Skills Development for SMEs and Entrepreneurship (Vol. 28).

Cunningham, J.B. and Lischeron, J., 1991. Defining entrepreneurship. Journal of small business management29(1), pp.45-61.

Gras, N.S.B., 1949. A Great Indian Industrialist: Jamsetji Nusserwanji Tata, 1839-1904. Bulletin of the Business Historical Society23(3), pp.149-151.

Hisrich, R.D., Peters, M.P. and Shepherd, D.A., 2017. Entrepreneurship. McGraw-Hill Education.

Kuratko, D.F. and Hodgetts, R.M., 1997. Entrepreneurship. Harcourt College.

Kuratko, D.F., 2009. Introduction to entrepreneurship (pp. 2-30). Australia and UK: South-Western.

Lazear, E.P., 2004. Balanced skills and entrepreneurship. American Economic Review94(2), pp.208-211.

Oosterbeek, H., Van Praag, M. and Ijsselstein, A., 2010. The impact of entrepreneurship education on entrepreneurship skills and motivation. European economic review54(3), pp.442-454.

Perrini, F. ed., 2006. The new social entrepreneurship: what awaits social entrepreneurial ventures?. Edward Elgar Publishing.

Schaper, M., Volery, T., Weber, P. and Lewis, K., 2010. Entrepreneurship and small business. John Wiley & Sons.

Sexton, D.L. and Smilor, R.W., 1986. The art and science of entrepreneurship. University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship.

Stam, E. and Van Stel, A., 2011. Types of entrepreneurship and economic growth. Entrepreneurship, innovation, and economic development, pp.78-95.

Storey, D.J., 2016. Understanding the small business sector. Routledge.

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