Oxford Business College
QCF Level 4
BTEC Higher National Certificate in Business
Credit Value: 15 credits
Unit Code: t/508/0495
Unit Number 9
Module Name: Entrepreneurship and Small Business Management
Term Date: 16 April – 22 June 2018
Tutor: Ian Freeth
Verified by: Paulina Bravo
You are reminded of Oxford Business College’s policy on unfair practice (i.e. Academic Impropriety, which covers a range of infringements related to the assessment* process). It applies in any situation where a student is attempting to gain credit by unfair or improper means and covers cheating, attempts to cheat, plagiarism and collusion.
Please refer to the Unfair Practice Procedure document issued and explained at induction for more information.* The term ‘assessment’ covers all types of assessment including assignments, examinations and presentations.
Introduction …………………………………………………………………………………………………. 3
Learning Outcomes………………………………………………………………………………………. 3
Essential Content …………………………………………………………………………………………. 3
Learning Outcomes and assessment Criteria …………………………………………………… 5
Recommended Reading & Other Resources ……………………………………………………. 7
Recommended books …………………………………………………………………………………………. 7
Essential resources…………………………………………………………………………………………….. 7
Guidelines Links…………………………………………………………………………………………………. 7
Assignment …………………………………………………………………………………………………. 8
Vocational Scenario ……………………………………………………………………………………… 8
Assignment Brief 1……………………………………………………………………………………………… 9
Assessment Brief 2 …………………………………………………………………………………………… 10
Guidance for Assessments ………………………………………………………………………………… 10
Submission deadlines ……………………………………………………………………………………….. 12
Annexes ……………………………………………………………………………………………………. 13
Annex 1: Viva Outline……………………………………………………………………………………….. 13
Annex 2: Scheme of Work………………………………………………………………………………….. 14
This unit provides students with an understanding of the definition and scope of entrepreneurship and an understanding of the enablers and barriers to business start-up.
Students will learn about the influence of national culture and economy on entrepreneurship and will explore the personal characteristics of entrepreneurs and the impact of personal situational factors, including education and background. Students will also learn about the role and importance of small firms to the economy and about social enterprise and the social economy. Students will also be expected to understand the balance of risk and reward in starting a new venture and they will investigate and reflect on their own entrepreneurial and enterprising characteristics. Examples of entrepreneurs and start-up organisations will be discussed and
students will be expected to draw on local, personal and general knowledge together with their learning to be able to identify the characteristics of entrepreneurial ventures.
By the end of this unit a student will be able to:
1 Explore and illustrate the range of venture types that might be considered entrepreneurial.
2 Assess the impact of small businesses on the economy.
3 Determine and assess the key aspects of an entrepreneurial mindset.
4 Examine the different environments that foster or hinder entrepreneurship.
LO1 Explore and illustrate the range of venture types that might be considered entrepreneurial
Scoping and defining entrepreneurship:
What is entrepreneurship? Defining entrepreneurship, entrepreneurial activity and enterprise.
The differences between serial entrepreneurs, intrapreneurs and owner- managers.
The typology of entrepreneurship:
Lifestyle and growth firms. Entrepreneurship in a corporate or public sector context. Roles and characteristics of micro, small and medium-sized organisations.
Understanding social enterprise, social entrepreneurs and the growth of the social economy.
LO2 Assess the impact of small businesses on the economy
Where entrepreneurial ideas come from:
Definitions of creativity and innovation.
The main sources of generating business and entrepreneurial ideas. How businesses protect intellectual property rights.
The role and importance of small firms:
The number and type of small firms and their contribution to the economy at national, regional and local level.
Factors to consider: size, turnover, profit, rate of growth, innovation, sustainability and adaptability.
International aspects of entrepreneurship: How international differences impact upon business start-up.
LO3 Determine and assess the key aspects of an entrepreneurial mindset
Entrepreneurial characteristics and mindset:
Research on personal characteristics of entrepreneurs and small business owners. Different lines of argument relating to characteristics of entrepreneurs such as are entrepreneurs born or made? Or can characteristics be learnt and adopted by anyone?
Skills set of the entrepreneur:
The types of skills that typify entrepreneurs and how these skills differentiate from other organisation managers.
Personal entrepreneurial tendency:
Entrepreneurial characteristics and situational factors in a personal context, including family upbringing, lifestyle, cultural differences and personal motivation and drivers.
LO4 Examine the different environments that foster or hinder entrepreneurship
The factors that influence the decision to start a business:
The range of factors that influence the choice to start-up a business, including personal background and education, national culture, economic circumstances and character traits.
The risks and rewards of business start-up:
The potential rewards of business start-up.
The risks and uncertainties of business start-up and how they can be mitigated.
Recommended Reading & Other Resources
ARSHED, N and DANSON, M (2016) Enterprise: Concepts and Issues, The
Global Management Series. London: Goodfellow
WICKHAM, P (2006) Strategic Entrepreneurship. 4th Ed. Harlow: Pearson
BURNS, P (2011) Entrepreneurship and Small Business. 3rd Ed. Basingstoke: Palgrave MacMillan.
DOWN, S. (2010) Enterprise, Entrepreneurship and Small Business. London: Sage. CARTER, S. and JONES-EVANS, D. (2012) Enterprise and Small Business:
Principles, Practice and Policy. London: Pearson.
GRIFFITHS, A. and WALL, S. (2011) Economics for Business and
Management. 3rd Ed. Harlow: Pearson.
Enterprising Oxford is an initiative created by University of Oxford which is an excellent local website which promotes, enhances and supports entrepreneurship in and around Oxford. They have relevant resources, training, real local cases and events that are a perfect fit for this course.
Sign up to their newsletter for regular updates http://www.eship.ox.ac.uk
Skoll Centre for Social Entrepreneurship: http://www.sbs.ox.ac.uk/faculty- research/skoll
Federation of Small Businesses http://fsb.org.uk
Global Entrepreneurship Network http://genglobal.org
Department for Business Innovation and Skills has up-to-date information about the national policy to promote entrepreneurship https://www.gov.uk/government/publications/2010-to-2015-government-policy- business-enterprise/2010-to-2015-government-policy-business-enterprise
Scribd has access to valuable reports, especially for distinction level in LO2 & 3 https://www.scribd.com/document/27454142/Growth-Challenges-for-Small-and- Medium-sized-Enterprises-A-UK-US-Comparative-Study
Additional 3 articles from the Journal of Small Business Management will be available in classroom. Reading these articles will help you develop a critical evaluation for a Distinction overall.
1. Entrepreneurial Motivations: What do we still need to know?
2. An Analysis of the Barriers Hindering Small Business Export Development
3. Market Orientation, Innovativeness, Product Innovation, and Performance in
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Email: firstname.lastname@example.org Page 7
Issue date: 18th April 2018 Version. 1
Links with other Modules
This unit links to the following related units:
Unit 1: Business and the Business Environment
Unit 27: Identifying Entrepreneurial Opportunities (HND level) Unit 29: Managing and Running a Small Business (HND level)
Guidelines about format such as the following
The brochure must be presented in the following format:
Your brochure must be word-processed in size 11 Arial font and double- spaced.
Each must have a front cover containing the course title, module name, title of the task, name of the person submitting the work and submission date.
Margins must be as follows: Top & Bottom: 2.5 cm; Left & Right: 3.2 cm.
The word limit per LO is 1,500 words and all pages must be numbered.
Each report must have a contents page and appendices which are not included in the specified word count.
The report must be genuine. Plagiarism is not accepted. See Appendix 1: Viva outline
For further guidance and support on report writing please refer to the Study Skills
Unit on HN Global, link www.highernationals.com
Your friend Gemma Smith, following a recent car accident, has received a substantial compensation of £1,000,000 as a one-off payment together with a tax free income of
£35,000 (index-linked). Although now she has generally good health, the car accident left her without the use of her legs and she spends time in a wheel chair for mobility. However, she does not see herself being disabled and still feels that there is much she can do with her life, especially as she is only 24 years old.
She is aware that you are studying various Business Management subjects, one of which is called “Entrepreneurship and Small Business Management”. She would like your help in both explaining the basis of this subject as well as helping her to come to some form of conclusion for her own business venture. She is looking to use her compensation monies to invest. Due to the level of compensation from the accident, she currently has sufficient independent income for her day to day needs and is looking to invest the capital payment.
Her father has always told her that property investment is the best option. She is looking to instigate a property development firm that not only builds new properties but also renovates older properties. She will look to sell or rent these properties on a case by case basis, but is essentially looking to build up a substantial property portfolio.
This will initially be in Oxfordshire, but hopes to acquire and develop portfolios of properties in different parts of the UK.
She understands that Digital Technology has a disruptive influence and so she wants to use this to help her enter the market and sees it as core to her business idea. She wants to develop a network of agents that can act as both developers and agents for the properties within these regional centres. All of which she is able to monitor and manage from her own location with this technology. She is also keen to support people like herself in both providing accommodation that meets their needs and employment.
She is aware that entrepreneurship and innovation can occur in different industries and is not exclusive to the Commercial Sector of the economy. She is aware that some Public Sector organisations due, generally but not exclusive to, budget restrictions, have needed to develop innovative solutions. She wants to investigate what could be available to her as entrepreneurial innovation from either the public or corporate sectors. She is keen to see how she can make a difference to Society, and in her own way the economy.
Assignment Brief 1
You are to respond to the following two tasks in a report as defined by the assignment guidelines on page .
Task 1 relates to Learning Outcome 1
Part (a) In considering the information above, and any other research, she would like you to help her examine the concept of Entrepreneurial Ventures. She wants you critically to explain what this means and how it relates to differing venture types, specifically linking this to Typology of Entrepreneurship, a model she has heard about.
Part (b) She is not sure which type of venture she would like to set up. Again, using the context of the information above, and from additional research, she wants you to critically analyse and evaluate the available options to help her make a choice in which venture type she progresses with.
Task 2 relates to Learning Outcome 2
To help her make a decision on which type of venture to set up she wants you to assess the impact that small businesses have on the economy. She wants you to critically evaluate each of the entrepreneurial venture types you have considered in Task 1 and determine how they affect the economy. This needs to include critical evaluation of economic data to help her justify her decision, especially as she is looking to apply this venture across both the UK as a whole and also within certain local regions. She therefore wants to understand which will have the best impact, particularly on a regional basis.
Assessment Brief 2
You need to write a report responding to the following statement
Some consider Entrepreneurs can only be born (nature). To what extent do you agree with this statement? You must critically evaluate what this statement means and any alternative viewpoints. As such, you have to develop an opinion of the statement, which you must justify with relevant theory and examples.
Guidance for Assessments
P1 & P2
You are to examine and explore the different types of entrepreneurial ventures that may be available to the context of the case study scenario (P1). Within this you are to compare and contrast those that may be of use as an Entrepreneurial Venture that she could use to develop her business ideas (P2).
You will need to examine different types of entrepreneurial ventures that have occurred within both the Corporate and Public sectors. To do this you will need to undertake research to determine how the theoretical concepts associated with this Learning Outcome are applied in contextual situations. Within these you will need to analyse how they operate and would be considered to demonstrate characteristics of Entrepreneurship and so provide Gemma Smith with the potential options to develop her idea.
This builds on the Merit response. Critically examine how current entrepreneurial ventures are growing and what influences this growth and allows these types of businesses to push further their scope and development. You will need to demonstrate this with the use of relevant theories, models and data to justify your critical examination. It is also important that this examination is helpful to Gemma Smith and the context of the Case Study Scenario.
P3 & P4
You should give careful consideration to all the relevant factors that apply to illustrate how small businesses impact on the economy. This task has to be supported by relevant statistics and secondary data from relevant websites. The following link has very suitable information to help you answer this task: http://www.fsb.org.uk/docs/default-source/fsb-org-uk/fsb-sbi-q3-2016.pdf?sfvrsn=1
It will not be sufficient make statements such as; “increase growth, improve employment…”. Any such statement will need data analysis to justify its validity. A Pass cannot be considered without this empirical validation in illustrating how micro and small businesses impact the economy (P3). In today’s modern economy there is more than just commercial aspects that both develop and influence the economy. You will again need to explain how important small businesses & start-ups grow the Social Economy. Again, it is important that you both demonstrate and justify this explanation
with research, particularly by supporting this explanation with the analysis of economic data. (P4)
This is going beyond P3 & P4 in that you should be able to demonstrate the differences that each type of business, based on size and complexity, has on the economy. Again, it is important that you are researching, analysing and in this instance specifically applying economic data to the context of the business.
For both M1 and M2, the following link from the Department for Business Innovation and Skills has significant questionnaire results for the corporate sector that you could attempt to use on your investigation. These relate to 2015 and so they are useful starting points, but this should be brought up to date. https://www.gov.uk/government/publications/2010-to-2015-government-policy- business-enterprise/2010-to-2015-government-policy-business-enterprise
For the purpose of weighing pros and cons that small, medium and large businesses make to the economy, you need to also look at national statistics. The following link can help you in this evaluation. Again, this should be brought up to date. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/46744
These websites are only indicative sources. You should always investigate other sources that are suitable for your assessment.
The builds on the Merit response. For critical examination you must have demonstrated a technical evaluation based on data within your Merit level. This will allow you to identify the difficulties and propose options to mitigate them in how small businesses impact on the different levels of the economy. Its important to apply this to the context of the Case Study Scenario as Gemma Smith is looking to develop her business venture initially on both a regional and national basis. You will need to consider the validity of this being operated in an international context.
P5 & P6
Using theoretical models and concepts, identify the characteristics that differentiate them from other business managers (P5). Again, using theoretical models and concepts identify and describe what is meant by entrepreneurial personality. Within this you will need to consider how this creates a mindset and motivational approach that relates to this personality (P6). To help you identify these particular traits (both P5 & P6) it is recommended that you relate these to particular examples of Entrepreneurs. This will form part of the basis of your opinion to the statement.
You will need to explore the similarities and differences that these frameworks consider as you respond to the statement.
You will need to analyse these traits, from a theoretical perspective, to determine how and why they align to the success of Entrepreneurs. You need to support this with examples by also aligning these theoretical frameworks to examples of Entrepreneurs.
Again, using relevant theoretical models and examples you need to examine how environmental factors can either hinder or support the process of Entrepreneurship. This will form the other part of the basis of your opinion to the statement.
Working on what you have identified within the context of P7 you need to analyse the links between the environmental factors and successful entrepreneurs.
Bringing together P7 and M4 you need to critically evaluate how these environmental factors influence entrepreneurs. You will need to put this into context with examples.
D3 & D4
In bringing these together, you will use this combination to develop the arguments you will have created under D3 with those of D4 to balance out and formulate your conclusion as to whether you agree with or disagree with the statement.
This provide evidence for P1, P2, M1 and
This provide evidence for P3, P4, M2, and
This provide evidence for P5, P6, M3, and
This provides evidence for P7, M4, D4
Assessment Brief 1: Entrepreneurial Ventures linked to the case study
Assessment Brief 2: Exploration of the entrepreneurial mindset
Assessment Brief 1: Thursday 24th May by google classroom
Assessment Brief 2: Wednesday 13th June by google classroom
Annex 1: Viva Outline
If work is of a “Pass” standard, you may nonetheless, at the discretion of the Assessment Board, be requested to attend a “Viva voce” to evidence full understanding of specific points in the work you have submitted. You will be given details of the “Viva” procedure in advance, as well as information on the points to be addressed; essentially what will happen is that you will sit with your tutor and a witness on an agreed date and the related questions, together with your responses, will be recorded
For further details on Viva procedure please refer to the student handbook. You can also find a Viva Record Sheet Example on Google sites: sites/student intranet/document library/forms
ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
The paper seeks to evaluate the concept of entrepreneurship and management of small businesses in an economy. The case evaluated in the discussion is how the UK economy would benefit from small businesses and entrepreneurship. Persons seeking to start businesses can consider the various types of ventures as each venture type is unique and depends on their ability. An enterprise is referred to as a business project or the ability and focus of a person to develop a new business. For instance, Gemma Smith will form an enterprise through making efforts to start the property development firm. SMEs helps with most economic reforms programs and government should work with SMEs to expand their reach in the economy. The governments should work with the SMEs to overcome financial challenges and market competition from established businesses through offering long-term support. Key elements that impacts on the decision for a person to start a business venture. The factors include a person’s education, culture, economic situation, and character traits. Gemma Smith has a strong personal drive to help her in becoming a successful entrepreneur. I believe that some successful entrepreneurs have been able to learn the skills with time. In spite of all, it is critical to recognize the significance of natural abilities of a person as an entrepreneur.
Entrepreneurship and Small Business Management
Gemma Smith has a significant amount of capital to invest in a good and sustainable business venture. However, it is critical to learn about the various venture types to enhance productivity and performance. The various venture types include intrapreneurs, social entrepreneurs, serial entrepreneurs, growth and lifestyle entrepreneurs. Each of the form of entrepreneurs has its risks and rewards. The proper understanding of the entrepreneurs will help in making decision on the best form of entrepreneurship. The process of entrepreneurship mainly explains the ability to come up with a business venture. Most business ventures operate within the SMEs sector that contributes largely to the UK economy. A larger percentage of the UK jobs are offered by the SMEs (Cowling, Liu, Ledger and Zhang, 2015, p.489). Government has made efforts to support the expansion of the SMEs as it would help in growing the long-term economic potential of UK. An entrepreneur is expected to have excellent interpersonal skills, critical thinking skills, and relevant personal characteristics. Gemma Smith will have to develop skills to ensure they becomes a successful entrepreneur. The debate over whether entrepreneurs are natural or learners is critical and each side has strong argument. I believe it is possible for Gemma Smith to become a successful entrepreneur through gaining knowledge and skills with time.
Entrepreneurship mainly refers to the overall process of designing, creating, and operating a new business that mainly emerges from a small entity. The individuals who takes the efforts to start the new businesses can be referred to as entrepreneurs. The process of entrepreneurship calls for persons with the capacity and willingness to create, structure, and manage business ventures considering the risks involved in efforts to make profits (Piperopoulos and Dimov, 2015, p.972) Other definitions describe entrepreneurship as the process of recognizing innovative ideas and organizing resources to turn the ideas into visible commercial products and services. In the case of Gemma Smith, the fundamental definition applies as she is seeking to launch and operate a business rather than innovating new ideas. In the United Kingdom, there are numerous property development and management firms that will potentially become rivals to Smith’s business venture of property development in the future.
Entrepreneurial activity describes the enterprising action of a person in seeking to create value through creating and expanding of the economic activities. The activity will involve the identification and the exploitation of new processes, products, or potential markets. An enterprise can be defined as a business project or the ability and focus of a person to develop a new business. For example, Gemma Smith will form an enterprise through making efforts to start the property development firm.
There is a difference between serial entrepreneurs, intrapreneurs, and owner-managers. Serial entrepreneurs define persons who tries to establish business repeatedly. After forming a business, they delegate the work of operating it and moves on to other business ventures. Largely, the serial entrepreneurs sell their earlier ventures. On the other hand, intrapreneurs defines internal executives and employees who capitalizes on their entrepreneurial abilities and skills to come up with programs that could grow the financial success of the company. For example, the intrapreneurs could assist in the redeveloping of a company’s business strategy and models to promote financial growth and performance (Karadag, 2015, p.26). Gemma Smith should seek to hire successful intrapreneurs who can assist in growing her success through the formulation of critical business strategies and programs. Another type of entrepreneur are the owner-managers. It refers to entrepreneurs who both manages and owns the business. For example, Gemma Smith can decide to become an owner-manager through taking an influential managerial position in the property firm to help in the running of the operations.
The typology of entrepreneurship helps into perceptive the nature of entrepreneurs and their ability to influence growth in the businesses. A key element in the comparison of lifestyle and growth entrepreneurs. The lifestyle entrepreneurs are keen on optimizing their lifestyles while the growth entrepreneurs are keen on successful growth in an efficient and effective way. The lifestyle entrepreneurs will emphasize on the importance of the business to earn returns for their personal income while growth entrepreneurs place more importance on the growth of the business to enhance sustainability. In addition, the lifestyle entrepreneurs are less likely to raise external funds while the growth entrepreneurs will make efforts to obtain external funding that will help in growing their business ventures successfully.
Unlike the growth entrepreneurs who are constant seeking to reinvent their business and grow the business, the lifestyle entrepreneurs are satisfied with the current condition of the business. Gemma Smith will review the significance of becoming a growth or a lifestyle entrepreneur. A person’s goals and ambitions will impact on her choice on the right entrepreneurship form to adopt. Economically, in the UK, the growth entrepreneurs have played a critical role in improving the expansion of the small and medium businesses. Such a growth has helped to create more employment opportunities and widening the local markets.
In a corporate context, entrepreneurship involves the investment in innovation and technologies to form private businesses and ventures that will be keen on maximizing returns while meeting the needs of the customers. In most occasions, corporate entrepreneurship exists when private entrepreneurs come up with ideas or expands on existing ideas to offer quality services and products that meets the demands of the market. Public sector entrepreneurs have emerged recently whereby state ventures adopts innovative programs, improves strategies, and productivity. Corporate entrepreneurs are more popular as most persons working as business people eventually starts corporations that gives them ability to reach a wider market leading to successful corporate entrepreneurship.
The role of the SMES in the UK economy cannot be underestimated. The SMEs are critical to the future growth and performance an economy. They serve a strategic function in helping with the overall rebuilding and rebalancing of the nation’s economy. The UK government relies on the SMEs to help most of its economic reforms programs as the SMEs have a wider reach in the economy. The governments should work with the SMEs to overcome financial challenges and market competition from established businesses through offering long-term support. In the EU region, the SMES have contributed to a significant economic expansion through innovation and creating jobs. According to Doern (2016, p.278), close to 70 million of SMEs accounts for around 65% of the total jobs in the private sector. SMEs have also helped in increasing the living standards through stimulation of economic activities, offering diverse products to consumers, and the creation of new employment. Burns (2016, p.12) indicates that the SMEs have beneficial to the economic and social livelihood of all nations as a fundamental aspect of economic growth and development. The core features of SMEs include that they are dynamic, flexible, mobile, and innovative.
The concept of social enterprise refers to the business entity that relies on commercial strategies to enhance improvements in the financial, social, and environmental welfare of the people including improving the social impact and wealth returns to the stakeholders. Such a social enterprise is an important concept to help in maximizing returns and capacity to enhance productivity and environmental success through the business in the society. Gemma Smith will be able to improve social welfare through her property development company such as the renovation of the older buildings to make the environment more appealing and sustainable.
Social entrepreneurs a person who develops a business venture with the goal of solving a certain social problem. The concept of social entrepreneurship has become more popular in the recent times due to the global focus on sustainability and environmental protection. Most social entrepreneurs rely on the focus to improve sustainability and environmental protection to form social enterprises that will assists in dealing with the specific social and environmental issues. In United Kingdom, the rise of social entrepreneurship has helped to both create job opportunities and enhance sustainability (Terjesen, Hessels and Li, 2016, p.301). It is possible for Gemma Smith to become a social entrepreneur due to her motivation to make a change in the society through her business venture. For instance, she can decide to help the needy families to get quality housing at affordable prices through her property development firm.
Different Environments that Foster or Hinder Entrepreneurship
There are various factors and elements that impacts on the decision for a person to start a business venture. The factors include a person’s education, culture, economic situation and character traits. Persons with higher education might not decide to pursue business ventures as they are open to get good jobs. However, persons with low education success often result to business due to the lack of the opportunity to launch successful careers in the corporate world (Groen, Cook and Van der Sijde, 2015, p.23). In other instances, particular national cultures and values encourages people to pursue business while other might hinder the potential of a person to start a business due to limiting factors. Economic potential of a person is important.
Economically, stable persons have more capacity and ability to launch successful businesses. However, the critical factors that affects the decision to launch a business is the character traits of an individual. Having the passion, commitment, and focus to be a successful entrepreneur might weigh more in a decision to start a business. Persons will rely on their capacity to become successful businesspersons to decide to run a business. External factors such as political environment including regulations and taxes and other social factors might reduce the ability of individuals to set up new businesses. Gemma Smith was motivated by the huge settlement after her accident and the motivation to bring change the society. Her passion for property development was also critical in her considering to set up a business.
Risks and Rewards
As Gemma Smith considers to start a business, there are risks and rewards associated with a new business. Some of the rewards includes providing income potential, security, and experience. As a business person, one is able to develop the relevant experience in business management that could translate to long-term business success. For example, a person is able to learn how to make employees well through the human resource management function. Such an aspect will make it easier for them to delegate work to employee when the venture calls for the delegation of responsibilities. In addition, startup provides for autonomy and security to the owners. Gemma Smith will be able to become her own boss due to the control of the business decisions and security of job (Zahra, Wright and Abdelgawad, 2014, p.482). Many executives in companies do not have secure jobs because they can be easily fired when the companies do not person well. However, an entrepreneur is secure from such risks of losing job. Moreover, the new business will give them the potential to earn more incomes. Unlike getting salary from employment, business will give some more incomes. However, it demands for proper business management of the earnings and focusing on the growth of the business to earn more profits.
However, starting a business has some risks including the challenge of learning new disciplines. Running a business calls for understanding of various aspects including tax requirements and programs for business development. The owner will mitigate the risks through consulting from experts on the key business regulations and learning through experience on how to develop the business. With time, the entrepreneur is able to master the new business aspects making possible to grow performance and productivity of the small businesses. The owner is also exposed to longer working hours due to inconsistent incomes. The owner often will devote more time to her business to help in growing revenues and managing all business elements well. For example, Gemma Smith will need to work on dealing with multiple clients before she gets quality employees to help with the workload.
Proper work management and hiring more employees would reduce the demand to work long hours in the new business. Inconsistent income is another risk associated with running a business. Setting a start-up creates uncertainty over the nature of incomes to be earned over time. Initially, the business might not be profitable due to lack of loyal customers and limited marketing (Hoogendoorn, 2016, p.278). Decline in economy, demographic changes, and consumer patterns might also affect the consistency of the business incomes. The owners can mitigate the risks of inconsistent incomes through proper financial management that could overcome financial limitations when incomes are low.
Impacts of Small Firms on the Economy
Entrepreneurial ideas can emerge from different things in life. For example, a person can come up with a business idea after identifying a need in the market and wants to satisfy the need. Persons might want to improve on existing business ideas to make them better or reading the ideas from books or magazines among others. Creativity and innovation are critical element in the creating of viable business ideas. Creativity defines the ability of a person to think and work on new ideas. On the other hand, innovation refers to the ability of a person to think in a creative way of improving or advancing things that are already in the market.
Gemma Smith will need to be innovative in her business venture in the property sector. Relying on disruptive innovation will makes it possible for come up with new business models to approach property development and management in the UK. The main sources of creating business ideas includes market research, observations, learning from media, and ideas from close friends and family among others. The innovation-related firms can be able to protect their intellectual property rights through government patents and copyrights that protects the business products and ideas.
Small firms are critical for the growth of any economy. In UK, the small firms have made significant economic contribution at the local, national, and regional levels. There are four types of small firms including non-employee firms estimated to be around 23 million, main street around 3 million, suppliers estimated to be 800million, and high-growth firms estimated to be 150,000 that are mainly innovation-related firms (Amato, et al., 2017, p.42). These firm types have played a critical role in creating jobs and promoting economic productivity and performance.
Some of the critical factors to consider on the nature of small firms is their size, sales turnover, profitability, growth rate, innovation, adaptability to the market, and their sustainability. International scaling of business could affect their success due to the changes in international regulations, exchange rates fluctuations, and limited market coverage. Different regulations and rules creates differences on how startups can be successful. In government supports startups, it becomes easy to launch the ideas successfully. Access to talented employees also creates differences on how startups can be successful.
Key Aspects of an Entrepreneurial Mindset
For an entrepreneur to be successful, they are expected to possess certain skills set. There are four wider categories of critical skills and traits for an entrepreneur including personal characteristics, excellent interpersonal skills, critical thinking, and practical skills. The personal characteristics for a person with an entrepreneur mindset includes optimism, vision, initiative, control, strong drive, and risk tolerant. The entrepreneur is expected to be optimistic on the future success of the business and hoping that they will get a good business model to grow their productivity and performance. They should also be visionary in ensuring that they remain focused on their core business and their ability to inspire people into enhancing business growth and productivity. Entrepreneurs should take strong initiative in resolving potential challenges and formulating good business improvements. Having the desire to control the business helps in making good decisions and the capacity other people in the business (Amato, et al., 2017, p.43). Control is also critical for all business leaders in maintaining good performance and organizational culture. Drive demands for the entrepreneurs to be self-motivated and strong towards realizing the business goals and focus. Risk-averse demands for the capacity of the entrepreneurs to withstand potential risks and make correct decisions and actions to counter the risks.
On the other hand, the organization managers have different skills set including strong managerial skill, risk averse, accountability skills, and ability to implement set goals and targets. The organization managers are not visionary and often focus on the daily operations through ensuring that set goals are achieved effectively. They are not ready to take risk as they are keen on protecting the interests of the leaders. They are expected to be accountable to all resources and thus, their strong managerial skills will help to account for all resources and decisions in the organization. Gemma Smith will need to hire quality organization managers with strong managerial and executive skills to implement her vision and strategic focus.
In addition, the entrepreneurs should possess good interpersonal skills including strong motivation and leadership ability, communication skills, listening skills, personal relation, negotiation, and good ethics. Leadership and motivation ability helps in inspiring the employees towards the stipulated goals and targets of the business. Communication skills an important skill for all entrepreneurs as it will help in communicating and relating well with clients and potential stakeholders. All entrepreneurs are expected to work on improving their communication skills. Listening skills helps in improving the ability to respond the issues raised by the clients effectively. Personal relations skill is important in maintaining good rapport with both employees and external parties such as customers and suppliers among others. Good ethics is an important in creating an environment of respect, fairness, and integrity in the business. Good ethical skills will make it possible for develop a good commitment team (Doern, 2016, p.279). Critical thinking skills is important in helping owner to come up with new ideas, find solutions to potential problems, and realizing potential opportunities in certain situations. While, practical skills refer to having knowledge on how to run the business affairs effectively. They include opportunity knowledge, business, and venture knowledge among others.
From a personal context, there are situational and entrepreneurial aspects that could influence a person to become an entrepreneur. One element is family upbringing that influences people to venture into business. A person born in a family of entrepreneurs is highly likely to grow into an entrepreneur through either inheriting the family business or setting up a new business. It shows that a person’s background is critical. Lifestyle of a person is critical. Living a working-class life makes it difficult for a person to convert into an entrepreneur. Cultural differences and motivation also limits or favors the opportunity of a person becoming an entrepreneur.
Entrepreneurs Made or Born
I strongly disagree with the argument that entrepreneurs can only natural meaning they are born to be entrepreneurs. The statement seeks to argue that successful entrepreneurs in the world are persons who are born with natural traits and abilities to become entrepreneurs. Certain persons argue that entrepreneurs should born with critical personality features including vision, drive, and passion, which are innate. There are has been various scholarly and business arguments of the statement, but I believe that some successful entrepreneurs have been able to learn the skills with time. In spite of all, it is critical to recognize the significance of natural abilities of a person as an entrepreneur. Successful Entrepreneurs such as Steve Jobs who was the CEO of Apple who described to have natural abilities to become an entrepreneur (Groen, Cook and Van der Sijde, 2015 , p.120). But, it does not mean that persons learning about entrepreneurship and innovation will not be good entrepreneurs.
Contrarily, successful and good entrepreneurs can be made by learning critical entrepreneurial knowledge and skills. Gemma Smith will have an opportunity to engage with experienced entrepreneurs who will help in shaping her ability in the business. Over the recent years, it has been a growing trend and efforts to formulate entrepreneurship initiatives to educate people on how to start and operate successful businesses and help them to reach their highest entrepreneurial potential. There are various factors that influences the success of a person as an entrepreneur. Unlike a sportsman such as a basketball player who must have certain natural build, the qualities and requirements for successful entrepreneurs are complex, as it is important to learn about business through experience in the society. Therefore, Gemma Smith has an opportunity to learn about the nature of business entrepreneurship through experience and learning about the core of property business while relying on her natural knowledge and abilities.
In summary, the process of entrepreneurship is critical and has helped in the expansion and management of numerous small firms in the UK. Entrepreneurship mainly explains the ability to come up with a business venture. Numerous ventures operate within the SMEs sector that contributes largely to the UK economy. The operation of business ventures requires the entrepreneurs to possess some excellent skills such as interpersonal and critical thinking skills to help in coordination and management of business operations. Gemma Smith will be able to contribute to the economy through her business venture. However, starting a business venture is influenced by various factors including background, cultures, motivation, and personal drive among others. From the various venture types, it is recommendable for Gemma Smith to become growth entrepreneur operating a corporate venture. Corporate ventures are committed to improving profits through growing the business over time. However, she will need to hire experienced organization managers who are recognized for their managerial skills to help in promoting entrepreneurial success in the business.
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