Entrepreneurship and Small Business Management
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.
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 |
|Public family owned firms |
The barriers to family owned small firms are fear of abandonment, sibling ad house member rivalry, is dilemma of choice and loss of power.
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 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 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
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 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
- 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 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 entrepreneurship
There 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 developing something of their own. The social enterprises are majorly controlled by time-honoured traditionalists.
P2. Exploring the similarities and differences of entrepreneurial ventures
|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 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 Sector
The 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.
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.
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
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.
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.
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 expansion and enlarge the scope of businesses and challenge the status quo. He became the stimulus to major entrepreneurs of SMEs. ‘
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 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. |
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.