Complete task 1 and 2 in 1000 words and task 3 and 4 in
1500 words
P1. Examine different types of entrepreneurial ventures and
explain how they relate to the typology of entrepreneurship
ventures, including examples of each type.
An entrepreneur is “one who organizes, manages and assumes the risks of a business or enterprise.”
This broad definition brings to mind many different types of people—from a local hair salon owner to
the founder of an up-and-coming medical device company. Although each type of entrepreneurial
enterprise can have a positive—albeit distinct—impact on the community, they ultimately differ in size,
vision and potential
The Four Types of Entrepreneurship
1. Small Business Entrepreneurship
A small-scale enterprise is a business that employs a small number of workers and does not have a high
volume of sales. Such enterprises are generally privately owned and operated sole proprietorships,
corporations or partnerships. The legal definition of a small-scale enterprise varies by industry and
country.
Small businesses are grocery stores, hairdressers, consultants, travel agents, internet commerce
storefronts, carpenters, plumbers, electricians, etc. They are anyone who runs his/her own business.
They hire local employees or family. Most are barely profitable. Their definition of success is to feed the
family and make a profit, not to take over an industry or build a $100 million business. As they can’t
provide the scale to attract venture capital, they fund their businesses via friends/family or small
business loans.
2. Scalable Startup Entrepreneurship
These entrepreneurs start a company knowing from day one that their vision could change the world.
They attract investment from equally crazy financial investors – venture capitalists. They hire the best
and the brightest. Their job is to search for a repeatable and scalable business model. When they find it,
their focus on scale requires even more venture capital to fuel rapid expansion.
3. Large Company Entrepreneurship
Large companies have finite life cycles. Most grow through sustaining innovation, offering new products
that are variants around their core products. Changes in customer tastes, new technologies, legislation,
new competitors, etc. can create pressure for more disruptive innovation – requiring large companies to
create entirely new products sold into new customers in new markets. Existing companies do this by
either acquiring innovative companies or attempting to build a disruptive product inside. Ironically, large
company size and culture make disruptive innovation extremely difficult to execute.
4. Social Entrepreneurship
Social entrepreneurs are innovators who focus on creating products and services that solve social
needs and problems. But unlike scalable startups their goal is to make the world a better place, not
to take market share or to create to wealth for the founders. They may be nonprofit, for-profit, or
hybrid.
Typology of Entrepreneur
The type of entrepreneur should be classified by these traits:
• Scale: how many employees, customers, revenue etc.
• Difficulty in Initiation: requires permits and regulations, fund raising, new technology, patents.
• Opportunity Cost: what he needs to give up in order to become an entrepreneur.
• Creativity/Originality: truly created something new in society, or just following the trend.
• Risk Associated: what do you lose if you fail?
• Past Ventures/Experience: whether or not this venture is the first one. Also, one who failed once
is often greater than one who succeeded once, because anyone could fail, but it is more entrepreneurial
for one to fail and not give up.
P2 Explore the similarities and differences between Social
Entrepreneurship and Lifestyle Entrepreneurship, including two
existing examples of each.
Social entrepreneur
A social entrepreneur is motivated by a desire to help, improve and transform social, environmental,
educational and economic conditions. Key traits and characteristics of highly effective social
entrepreneurs include ambition and a lack of acceptance of the status quo or accepting the world "as it
is". The social entrepreneur is driven by an emotional desire to address some of the big social and
economic conditions in the world, for example, poverty and educational deprivation, rather than by the
desire for profit. Social entrepreneurs seek to develop innovative solutions to global problems that can
be copied by others to enact change.
Social entrepreneurs act within a market aiming to create social value through the improvement of
goods and services offered to the community. Their main aim is to help offer a better service improving
the community as a whole and are predominately run as nonprofit schemes. For example Sam Goldman
and Ned Tozun, of [Link] Design, manufacture inexpensive lamps and sell them in communities that
don't have reliable electricity.
Lifestyle entrepreneur
A lifestyle entrepreneur places passion before profit when launching a business in order to combine
personal interests and talent with the ability to earn a living. Many entrepreneurs may be primarily
motivated by the intention to make their business profitable in order to sell to shareholders. In contrast,
a lifestyle entrepreneur intentionally chooses a business model intended to develop and grow their
business in order to make a long-term, sustainable and viable living working in a field where they have a
particular interest, passion, talent, knowledge or high degree of expertise. A lifestyle entrepreneur may
decide to become self-employed in order to achieve greater personal freedom, more family time and
more time working on projects or business goals that inspire them. A lifestyle entrepreneur may
combine a hobby with a profession or they may specifically decide not to expand their business in order
to remain in control of their venture. Common goals held by the lifestyle entrepreneur include earning a
living doing something that they love, earning a living in a way that facilitates self-employment,
achieving a good work/life balance and owning a business without shareholders. Many lifestyle
entrepreneurs are very dedicated to their business and may work within the creative industries or
tourism industry, where a passion before profit approach to entrepreneurship often prevails. While
many entrepreneurs may launch their business with a clear exit strategy, a lifestyle entrepreneur may
deliberately and consciously choose to keep their venture fully within their own control. Lifestyle
entrepreneurship is becoming increasing popular as technology provides small business owners with the
digital platforms needed to reach a large global market. Younger lifestyle entrepreneurs, typically those
between 25 and 40 years old, are sometimes referred to as Treps.
TASK 2 (ppt)
P3. Interpret and assess relevant data and statistics to illustrate how micro and
small businesses impact on the UK economy.
Turnover
Typically, this is one of the first metrics that springs to mind when measuring
economic contribution, and while it is not the only one, it is important. Small and
medium sized businesses had a combined turnover of £1.6 trillion at the start of
2014I. While this is a significant figure in itself, it’s even more impressive when you
consider that it amounts to a whopping 47% of the private sector’s overall turnover I.
Employment
Although the majority of small businesses are not employers – for instance, sole
traders who work independently – SMEs still make a “disproportionately large
contribution to job creation” in the UKIV. Small businesses employ over 24.3 million
people in the UKII, which accounts for 60% of all private-sector employmentI, and a
massive 81% of the overall workforceII.
Growth
When it comes to business growth, SMEs triumph over their larger counterparts.
Innovation is a large part of growth, as it keeps fresh markets which may otherwise
go stagnant, stops businesses from becoming passive, and allows active firms to
rise above dormant or unproductive ones. A reported 37% of SMEs engage in
innovative activity IV, suggesting that small businesses are one of the key drivers of
innovation, competition and growth.
There was a colossal 47% increase in the number of small business births between
2009 and 2013 III, which is correlative with the UK’s economic recovery after 2008’s
recession. SMEs have played a vital role in lifting the UK out of recession, and thus,
never has the entrepreneurial spirit been so strong in the UK.
Industry
The largest industries in the UK are retail, manufacturing and the repair of motor
vehicles, and small businesses are at the heart of these three core economic
activities. 46% of all SME revenue comes from businesses in one of these sectors,
and three out of every 20 small businesses fall into one of these categories I. With
small and medium firms such a vital part of Britain’s core industries, it becomes
clear how essential they are to the country’s economy overall.
P4 Explain the importance of small businesses and business start-ups to the growth
of the social economy in the UK.
This is neatly summarized in GDP (Gross Domestic Product) data which for the period of July to
September 2016 showed a 0.5 per cent expansion in the economy, 0.2 per cent above expectations. The
UK voted to leave the EU in a Referendum held on the 23rd June 2016. To put this release of 0.5 per
cent into perspective, it is important to note that in Q2 of 216 the figures were 0.7 per cent, so
ultimately it is a decline in the rate of Uk economy growth. The impact on small businesses from GDP is
wide ranging because they are the lifeblood of the UK economy. Falling GDP will have a large impact on
small businesses in terms of the overall activity of businesses and consumers buying their products or
services. The 0.5 per cent growth was mainly in services which grew 0.8 per cent, lifting declines in
construction and manufacturing. This is quite interesting since manufacturing has been capturing the
headlines because of the weaker pound boosting growth. This indicates that the weaker pound, whilst
helpful, has not overall been of benefit to this important area of the economy. Small businesses are also
more susceptible to shocks since they generally have a lower field of operation. Compared to a larger
firm a smaller firm might struggle to easily call on greater investment or bank loans or diversification to
shore up any weaker main markets. Falling GDP means that smaller business may struggle to keep
afloat, particularly if they import from overseas as sterling now buys less than it did before the vote.
Task 3
P.5 Determine the most likely characteristic traits and skills of Elizabeth Gooch and
Tom Mercer, statinghow they are differentiated from those of business managers.
There are different types of opinions regarding entrepreneur vs manager, but here in this discussion
most of the key difference can make people understand the actual work behavior or the nature of an
entrepreneur and a manager. The difference between manager and entrepreneur are as follows,
1. Responsibility:
An entrepreneur is responsible for all the activity of the company which he started to create a difference
in his life, but where in which a manager just have to deliver his duties and responsibilities assigned to
him in a certain department of work. Many entrepreneurs have the freedom to do take decisions and
choices that can positively or negatively affect the growth of the company. On the other hand, a
manager is a person who is hired by the entrepreneur to manage the business. They are professionally
trained individuals who have the knowledge about the various business aspects. Therefore, it is
important to understand that an individual entrepreneur holds the overall structure of the business as
he is the idea behind the business, but a professional manager just follows the orders given by an
entrepreneur.
2. Specialization:
It is not necessary that an entrepreneur must know all the entrepreneurial activities of the business. And
sometimes there is even a possibility that an entrepreneur understands all the smaller portions of the
business and their working departments. An entrepreneur must take all the responsibility for the ideas
which can make the business go successful, where in which a manager need to a specialize in his own
work and his specialization need to favor the environment of the business. Managers on the other hand,
tend to be more calculative and they form various plans and strategies so as to popularize the idea and
motives of the company to the employees. This helps the employees to be inspired to work hard and
provide more benefits to the company and the organization.
3. Prone to make mistakes:
An entrepreneur is allowed to make mistakes and his mistakes, even can educate him better in his
upcoming decisions, but where in which a manager is concerned, he is not supposed to make any
mistakes as he is one of the best in his field of work. An entrepreneur is allowed to make mistakes while
seeking various innovative and creative ideas that can help with the development of the company. On
the other hand, a manger should try hard to preserve the status and name of the company, so for these
goal, it is necessary that the manager should not make unnecessary mistakes as this can be seen as a
bad example by fellow colleagues and employees.
4. Educational background:
It is not necessary that each entrepreneur who own a successful leading business needs to be well
educated in their work. There is a possibility that most of the successful entrepreneurs are school
dropouts. But a manager cannot afford to risk his educational background for the sake of the job. A
manager needs to be trained perfectly in his job profile. In most cases, an entrepreneur might not even
know about the various aspects of the company such as the design section, innovations, and financial
department and so on. On the other hand, it is mandatory for the manager to be well equipped and
knowledgeable so as to manage the company in a stable manner. Therefore, as compared to a manager,
an entrepreneur holds a poor level of educational background.
5. Risk taking:
As a nature of work is concerned an entrepreneur’s job is to take risks in their business so that the
company can reach better heights of its own dimension. But a manager needs to act wisely during tough
times. Unlike an entrepreneur a manager need to avoid taking risks in the field of his work. Many
entrepreneurs like to take on risks as this will allow them to explore the different aspects of the industry
that they are venturing into. On the other hand, many managers are reluctant from taking risks and
uncertainties as this can shake the balance and foundation of the working and functioning of the
company.
6. Financial freedom:
The most important factor that affects each and every single employee or employer of the business,
including its entrepreneurs is its financial position. But the important part of that concern is that an
entrepreneur holds all the rights to enjoy complete financial freedom of the business. Entrepreneurs
thrive on freedom which mainly includes freedom of capital, freedom of expressing ideas and
suggestions, freedom to venture out in the industry and understand the changes in the trends and
technologies and so on. In contrary, most managers tend to prefer stability and security over freedom
while working under someone in a corporation. Most managers tend to like a secure job and better
working conditions so as to maintain satisfactory lifestyle. There is a possibility that an entrepreneur can
enjoy complete financial freedom over the rest of the people concerned in the business.
7. Commitment:
When a commitment factor comes, a manger takes all the credit in this field of work. A manager can
switch his commitment towards the company constantly. Where in which an entrepreneur need to be
committed towards their business even if they receive capital gain or not. An entrepreneur is the
establisher and the backbone of the organization so naturally an entrepreneur will have the highest level
of commitment among various employees of the company. Many entrepreneurs work day and night just
to start their own company. On the other hand, the level of loyalty among managers is low compared to
an entrepreneur they would prefer to get a stable job rather than toiling for a company. They usually
change companies if they get a much better offer as they do not have any personal connections with the
company unlike an entrepreneur.
Finally, the bottom line is that at the end of this discussion over the difference between an entrepreneur
and manager, a person might gather more information on the working nature of their job description.
Therefore, interested people who are willing to learn more about these differences between
entrepreneur and manager, can read all the above mentioned explanation about the topic.
P6. Assess how aspects of the entrepreneurial personality of Elizabeth Gooch (Case
Study 1) and Tom Mercer (Case Study 2) reflect their entrepreneurial motivation
and mindset.
There is a certain mindset an entrepreneur must cultivate to grow, understand and lead the business.
Business leaders who attain this mindset are the ones who ultimately succeed. This mindset has four,
intertwining aspects.
Anticipate Failure: Learning from failure is how we succeed. An entrepreneur who makes it big on the
first try is a rare story. The path to success is not straight. The road is full of potholes, the journey has
many detours. No matter how meticulously an entrepreneur plan, they are going to make a mistake.
Maybe more than one. Some entrepreneurs, fixated on the idea that they’ll succeed on the first try,
give up without a second try. By not anticipating failure, they failed.
Let go and delegate: Some of the best known entrepreneurs rely on a team of top managers to keep
their businesses on track. They encourage them to pursue their ideas and provides the tools to succeed.
Business won’t grow as much as it could before entrepreneur admit to themselves that, no matter how
hard they work, they can’t run it on their own. A great idea can turn into a great business only when
they find and trust the right people to help make it happen. Entrepreneurs need help accomplishing
their goals. Hire great people to work in the business so you have the time to work on the business.
Stay curious, learn new skills: people with a greater variety of roles in in previous jobs are more likely to
become entrepreneurs. Not all entrepreneurs are experts, but successful entrepreneurs always have a
broad skill set. A successful entrepreneur thirsts for knowledge and enjoys learning. That keeps an
entrepreneur effective and efficient. Entrepreneurs benefit from learning new skills and ideas they
incorporate into their business. The smallest lesson learned can make a big difference in business.
Follow your instincts. The willingness to take risks is the usual stepping stone to entrepreneurial success.
Successful entrepreneurs rely on their “gut-feeling” when it came to hiring people for their business. An
entrepreneur will face new challenges every day. They will find themself on uncharted territory where
there is very little research or data for you to make a sound decision. This is where the gut feeling comes
in. In risky business, entrepreneurs learn to follow their instincts.
The entrepreneurial motivation is the process that activates and motivates the entrepreneur to exert
higher level of efforts for the achievement of his/her entrepreneurial goals. In other words, the
entrepreneurial motivation refers to the forces or drive within an entrepreneur that affect the direction,
intensity, and persistence of his / her voluntary behaviour as entrepreneur. So to say, a motivational
entrepreneur will be willing to exert a particular level of effort (intensity), for a certain period of time
(persistence) toward a particular goal (direction).
Task 4
P7. Examine, using Elizabeth Gooch (Case Study 1) and Tom Mercer (Case Study 2),
how personal background and experience can hinder or foster entrepreneurship.
Business and entrepreneurship skills and experience affect the propensity of individuals to become
entrepreneurs and the likelihood of their success. There is some evidence pointing to the importance of
these skills for innovative entrepreneurship. The issue of business and entrepreneurship skills and
competencies is closely related to broader questions related to skilled labour, migration and attitudes
toward entrepreneurship). Suitable education programmes to help develop entrepreneurial mindsets
and company training in entrepreneurship skills are considered critical.
ere are a number of entrepreneurship and business skills and experience that will have a positive
influence on innovative entrepreneurship. Innovative entrepreneurship will require management
skills and the ability to manage change. A number of personal attributes are also critical for innovative
entrepreneurship, including the ability to be innovative, being change oriented and visionary leadership.
Advanced knowledge-intensive skills and converging skills are more important to innovation than basic
skills (OECD, 2010). More specifically, entrepreneurship skills include two components related to
innovation: an active component comprising the entrepreneur’s propensity to drive innovation, and an
absorptive component comprising the entrepreneur’s capacity to recognize and welcome
innovation delivered by external factors (Green et al., 2007). Entrepreneurship involves the impulse to
create and innovate, recognizing innovation by others, the desire to implement innovation (e.g. starting
a new venture, finding new markets, introducing new organisational models) and the drive to motivate
others to succeed in its implementation (OECD, 2010).
Entrepreneurship and advanced business skills and experience are important to the innovation process,
and can be a more important factor than access to financing. For example, research suggests
that innovative SMEs in the United Kingdom are more constrained by a lack management skills than by
financial constraints, which hinders their development of innovation and high-growth strategies