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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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