Entrepreneurship and Small Business Management
This is the course outline from Unit 09: Entrepreneurship and Small Business Management. For doing this study, it has chosen a company from UK named Ella’s Kitchen Limited. Here, all the learning outcomes have been fulfilled in the following structure.
Introduction
Entrepreneur is a dominant catalyst of modern economy and society. Development and growth in economy is not possible or accelerated without expansion of entrepreneurship. In modern days, entrepreneurship plays vital role in the development of economy and society. Entrepreneurship serves economy as dynamic process of creating wealth and innovative tools and procedures of making wealth. In the aspects of the creation of job opportunity, acceleration of innovation, and improvement of the social and economic indicators, there is no alternative to entrepreneurship. This is why for the development of the nation, entrepreneurship is inevitable.
Company Overview
Ella’s Kitchen Limited is a private limited company operated since 2006 and headquartered in Henley-on-Thames, Oxford shire, United Kingdom. Ella’s Kitchen is basically associated with the production and distribution of baby and toddler food. Mostly baby foods are its key products. Ella’s Kitchen makes and sells 100% organic food items for babies and paddlers. Ella’s Kitchen does not distribute its products and services directly to the customers and consumers (Holtz-Eakin and Rosen, 2004). It delivers to a variety of supermarkets and local shops which then resell them to the customers and consumers. Ella’s Kitchen has marketing operation outside United Kingdom including United States, China, Norway, Sweden, Ireland, Belgium, Iceland, Netherland, Canada, and Denmark. There are more than 50 workers working for Ella’s Kitchen. The annual revenue of Ella’s Kitchen is £4 Million in the financial period 2018.
LO 1- Entrepreneurship and Small Business Management
Also Read: Significance of Brexit for British People
P1: Different types of entrepreneurial ventures and their relation to the entrepreneurship typology
Entrepreneurship and entrepreneur
Entrepreneurship is the process of starting a new business which will provide innovative products to the customers and clients. The individual or individuals associated with the establishment of the business are called entrepreneurs. In brief, entrepreneurs are the individuals who start and operate a business for the purpose of making benefits or profits for themselves. On the other hand, all the activities and efforts of entrepreneurs associated with the establishment and operation of the business is called entrepreneurship.
Different entrepreneurial ventures
Small scale entrepreneurship: small scale entrepreneurship basically constitutes with owner and some staffs. The amount of capital provided by the owner is very low for small scale entrepreneurship. Almost 90% business organizations in United Kingdom are small scale entrepreneurship business. Small scale entrepreneurship comprises with sole proprietorship and partnership business. Bakeries, Candles, School stationaries, Water bottles, Leather belt, Small toys, Paper bags, Xerox and printing, Tissue and Napkins are considered as small scale business.
Scalable entrepreneurship: scalable entrepreneurial ventures are those which have more capital and staff requirement compared to those of small scale entrepreneurial ventures. Scalable ventures use innovative and creative ideas to install the business (Bosma, 2013). These businesses use sophisticated strategies and policies for initiating high growth and profitability of the business. The operational segment of scalable entrepreneurship is wide but not large. Sales revenue and profit margin of scalable entrepreneurship becomes lower initially but increases gradually. Online business, Coffee, Professional chamber, medical care, and counseling services are example of scalable entrepreneurial ventures.
Large scale entrepreneurship: large scale entrepreneurial ventures are those which are generally large in terms of capital and number of employees compared to that of scalable entrepreneurial ventures. Large scale entrepreneurial ventures are generally created and operated by laws and regulations. There are some specific laws and regulations that must be maintained and obeyed by large scale entrepreneurial ventures. Large scale entrepreneurial ventures comprises with private or public limited company which provides huge capital in order to operate and expand the business (Carsrud and Brännback, 2007). Large scale entrepreneurial ventures create higher level of employment. There are only 1% business organizations that belong to large scale entrepreneurial ventures. Apple Inc., Amazon.com, Alibaba.com, Microsoft, GlaxoSmithKline, IBM, Nike etc. are some examples of large scale entrepreneurial ventures.
Social entrepreneurship: social entrepreneurial ventures are those which focus on the resolution of the social problems of society and nation. Different types of social entrepreneurship are formed to different social problems. Dr. Muhammad Yunus has been awarded with novel prize due to contribution in eliminating poverty by in Bangladesh. Moreover, some other types of social entrepreneurial ventures formed to safeguard the interest of the different groups. Social entrepreneurial ventures are basically non-profitable and charitable and formed for the welfare of a particular group of people.
P2: Similarities and differences between entrepreneurial ventures
| Similarities and differences | Small scale entrepreneurship | Scalable entrepreneurship | Large scale entrepreneurship | Social entrepreneurship |
| Purpose | The purpose of small scale entrepreneurship is profit making for the owner or owners. | The purpose of scalable entrepreneurship is profit making for the owner or owners. | Large scale entrepreneurship is also created and operated for the benefits of its stakeholders. | Social entrepreneurial ventures are established and operated for the welfare of the society and resolve social problem. |
| Scope of the business | Examples of small scale entrepreneurship comprises Bakeries, Candles, School stationaries, Water bottles, Leather belt, Small toys, Paper bags, Xerox and printing, Tissue and Napkins | Online business, Coffee, Professional chamber, medical care, and counseling services are example of scalable entrepreneurial ventures (Frederiksen, Wennberg and Balachandran, 2016). | Apple Inc., Amazon.com, Alibaba.com, Microsoft, GlaxoSmithKline, IBM, Nike etc. are some examples of large scale entrepreneurial ventures. | Social foundation examples include Trump Foundation, Obama Care, heart Foundation, Eye Hospital, Cancer Foundation etc. |
| Employees or staffs | Small scale entrepreneurial ventures have a few employees normally not more than 50 personnel. | Scalable entrepreneurial ventures recruits more employees compared to that of small scale entrepreneurship.
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Large scale employees have maximum level of employees. As they have foreign operation, it requires a great number of staffs. | Social entrepreneurship recruits lower level of employees and staffs for carrying out its routine operation. |
| Legal requirement | Small scale entrepreneurial ventures do not require any legal formalities. Owners can start business when he/she intends to start a business (Holtz-Eakin and Rosen, 2004). | Scalable entrepreneurial ventures are often undergo some legal requirements for starting and operating activities. | Large scale entrepreneurial ventures are formed and operated by sophisticated laws and regulations. They are created and operated by some specific laws and regulations. | Government may sometimes formulate laws and regulations for facilitating social entrepreneurial ventures. |
| Level of risk | Owner or owners has/have higher risk in small scale entrepreneurial ventures because they are liable up to their personal wealth. | Scalable entrepreneurial ventures have lower risk because stockholders are liable to the investment in the business not their personal wealth. | Large scalable entrepreneurial ventures have lower risk because stockholders are liable to the investment in the business not their personal wealth. | Social entrepreneurial ventures have hardly risk because they are formed and operated for social well-being. They don’t require returning the fund to the donator. |
LO 2 – Entrepreneurship and Small Business Management
P3: Impact of micro and macro business on the economy
Micro and macro businesses have wide impact on the development of the economy. Due to proper and disciplined growth of the economy, the role of micro and macro businesses is widening.
Self-employment: In United Kingdom, small entrepreneurial ventures comprise almost 90% of the business institutions. Small entrepreneurial ventures create highest level of self-employment for the people of the nation.
As most of the businesses are small scale, they create higher level of employment in the country. Moreover, macro businesses are contributing a lot in the creation of self-employment (Smallbusiness.chron.com, 2019). In United Kingdom, large scale entrepreneurial ventures create 3% self-employment in the economy.
Create employment: besides creating employment for the owner or owners, micro and macro entrepreneurial ventures employment for other people in the country. Micro businesses are more worth to create higher level of employment for people. Though micro entrepreneurial ventures create lower level of employment, overall they create a great level of employment due to their massive numbers in the economy.
Moreover, in terms of asset utilization, large scale entrepreneurial ventures have higher capabilities to utilize national wealth and create greater value for the nation. In the graph given above, we have seen that large scale entrepreneurial ventures create 40% employment while small scale entrepreneurial ventures create 48% employment for the people of United Kingdom.
Contribution of micro and macro entrepreneurial ventures on the growth of the economy: micro and macro businesses have a large impact on the economic development of the country. About 80% of the economic growth has come from direct and indirect involvement of the entrepreneurial ventures. Moreover, growth domestic product of United Kingdom has constituted with a large portion contributed by the micro and macro businesses.
Sometimes, micro businesses create raw materials for macro businesses (Kent, 2015). GDP growth of United Kingdom has been boosted up greatly due to massive manufacturing of the micro and macro businesses. Moreover, agricultural and manufactured products and services provided in the economy are supplied in the economy by the help of micro and macro businesses. So, without micro and macro businesses, economic development cannot be possible in anyway.
P4: Significance of small businesses and business startup to the growth of the social economy
Social change: small businesses and startups are dominant catalyst for brining social change in the society. Small and startup businesses bring innovative and creative products and services to the door of the people. Moreover, they work for solving problem of their customers and consumers. Ella’s Kitchen as a small business provides organic and healthy food to the babies and paddlers of United Kingdom. Parents are very conscious about baby food because baby’s health is very sensitive. Ella’s Kitchen is working for the resolution of the problem of the society.
Innovative products: Small and startup businesses enter market with innovative products and services to satisfy their customers and clients. Moreover, they bring convenient products and services that make people’s life easy, comfortable, and flexible. Different parent’s conscious is now the conscious of Ella’s Kitchen because it needs to provide better products and services to satisfy their customers (Muñoz, 2013). Ella’s Kitchen conducts research on baby foods and examines positive and negative impact of the foods as well as provides necessary nutritious ingredients to serve healthy foods for babies.
Undertaking social projects: sometimes Ella’s Kitchen undertakes some social projects regarding improvement of social awareness and resolution of social problems in order to advertise their brand. Recently, Ella’s Kitchen has arranged seminar for increasing awareness of people on the health and food habit of the babies and paddlers (Ormiston and Seymour, 2011). Ella’s Kitchen believes that it will become successful through welfare of the society and resolution of social problem. Providing organic and healthy food to the customers and clients is a solution for the parents of baby’s paddlers. In this way, Ella’s Kitchen is contributing a lot on the resolution of social problems and contributing to the socio-economic development.
LO3 – Entrepreneurship and Small Business Management
P5: Characteristics and skills of successful entrepreneurs
Successful entrepreneurs have some distinct characteristics which makes them different those of failure. All entrepreneurs are not successful in the world. We all know about Mark Zuckerberg of Facebook, Zeff Bezos of Amazon, Bill Gates of Microsoft, and Steve Jobs of Apple. There are a large number of entrepreneurs whose name we don’t know because they became failure on their business. So, the characteristics and skills that make these people famous and different from others are described below.
Passion for business: successful entrepreneurs have deep passion for the business. They dedicate their whole for thinking about for others. Successful entrepreneurs think and rethink on the products and services of their business (Southwest, 2019). How these products and services can be modified, brought greater value for customers, and how to redesign them are generated by the entrepreneurs due to their deep passion on the business.
Long run vision: successful entrepreneurs have long term vision about their business which focuses welfare of business through the welfare of the stakeholders and society. If entrepreneurs don’t have long term vision, they may not be able to reach their destination. Long term vision helps to sustain in the market competing with the competitors.
Tenacity despite failure: successful entrepreneurs are very tenacious on their goal and objectives. There are a number of problems and obstacles in the way of business development. They are handled by the entrepreneurs effectively. As entrepreneurship is an innovative and challenging task, failure rate is very high in entrepreneurship. So, entrepreneurs cannot be frustrated when they fail to a mission or project. They adhere to the projects and missions till success comes (Stevenson and Sahlman, 2016).
Execution intelligence: entrepreneurs are very smart and intelligent in way of their operation. Execution intelligence is a must for a successful entrepreneur because it will help them to grab the market opportunity at the right time. Moreover, execution intelligence of entrepreneurs helps to perform operation effectively and efficiently which creates greater value for the entrepreneurs.
Innovation: innovation is another vital characteristic of the entrepreneurs because entrepreneurs need to generate and implement new policies and procedures for the successful operation of the business. Customers and clients are very attractive to the innovative products and services. So, when entrepreneurs of Ella’s Kitchen will generate and design new and innovative products and services to the customers and clients, they will be satisfied and buy repeatedly from Ella’s Kitchen. Moreover, innovation can bring revolution in performing operation of Ella’s Kitchen by introducing new policies, strategies, and procedures.
Focus on customer needs: entrepreneurs of Ella’s Kitchen focuses on the needs and requirements of the customers and clients in order to serve better utility. When entrepreneur of Ella’s Kitchen focuses on the customer needs, product quality will be improved and become higher compared to that of competitors (Ben Casnocha, 2019). Without depriving customers’ choice and preference, Ella’s Kitchen cannot be successful. So, the entrepreneurs of Ella’s Kitchen must focus on the needs of the customers and clients.
Good management skills: management skill of successful entrepreneurs must be pretty good because key task of entrepreneurs is to organize and manage corporate issue and procedures. When entrepreneur of Ella’s Kitchen can organize and manage corporate resources, operation will be accomplished effectively and efficiently. This is why entrepreneur of Ella’s Kitchen must have good management skills to manage and organize its resources properly.
P6: Aspects of entrepreneurial personality motivating their mindset
Aspects of entrepreneurial personality reflect entrepreneurial motivation and mindset. In this section, the author will show how aspects of entrepreneurial personality reflect individuals towards entrepreneurial motivation and mindset.
Sense of independence: people who are self-respecting, like independence and dislike to work under someone’s supervision are choose entrepreneurship as their career. People who developed an attitude and sense of independence are very likely to choose entrepreneurship as their career.
Curiosity: curious people are likely to be entrepreneurs in their professional life. People who are very curious and deeply think anything around themselves choose entrepreneurship because in their curiosity they will be able to find out market gap and later use them to make personal benefits (Ormiston and Seymour, 2011).
Optimism: optimistic people are very likely to choose their career as entrepreneurs because they always hope for better by dint of their efforts and dedication. Something good will be happened when one optimistically goes ahead with a matter. Entrepreneurship is a passion for doing better always. There is no end in entrepreneurship because entrepreneurs can hope for continuous betterment of their business.
Flexibility: flexibility is another reason for individuals who choose entrepreneurship as their profession. If they start work as a servant in a company, they have less flexibility and have to confine in restricted life style (Stevenson and Sahlman, 2016). So, people seeking flexibility in life choose entrepreneurship as their career.
Ownership: To be a servant is not pride in anyway. In some cases, it may hurt prestige of some individuals. So, individuals who develop the sense of ownership may prefer entrepreneurship to work for others. In this way, ownership sense of an individual helps to motivate an individual towards entrepreneurship.
LO4 – Entrepreneurship and Small Business Management
P7: Positive and negative impact of background and experience on entrepreneurship
Background and experience have a lot to do in developing entrepreneurs and entrepreneurship towards Entrepreneurship and Small Business Management. They have wide impact to change mindset of an individual towards entrepreneurship. In this section, positive and negative impact of background and experience is described precisely.
Positive and negative impact of background
Background plays vital role in motivating mindset of an individual towards entrepreneurship. Family background can motivate an individual’s mindset. Say for example; people come of a business background family can easily motivated by seeing their parents involving in the business. Moreover, a deep passion will create to these people towards entrepreneurship. As they are regularly accustomed to see resolving business problems by their parents, they will be motivated to these tasks.
Warren Buffet, a successful businessman in this time, has said that one of the great secret of my success is that I have come from a business background family. As his father was a great businessman, he was interested in his father’s business from childhood and taught business techniques and approaches inherently from his parents (Ben Casnocha, 2019). On the other hand, education background can be a good platform for motivating mindset of the individuals towards business. Novel prize winner Dr. Muhammad Yunus was a student of Economics who later established a bank for eliminating poverty by introducing small credit scheme. He basically used his academic knowledge in practice to eliminate poverty in Bangladesh and finally he became successful and rewarded as novel price in 2006. So, from the above example; it can be said that without proper background, it is not possible to be successful entrepreneurs.
Positive negative impact of experience
Experience is a powerful parameter for fostering and hindering entrepreneurship. People basically go for doing those tasks for which they are familiar with. As doing new thing is challenging and failure rate is high for new tasks, people generally try to avoid new and innovative tasks and projects. In the same way, entrepreneurship is challenging and innovative tasks. So, people normally try not to involve in entrepreneurship for avoiding risk of failure. Previous experience and exposure on business and entrepreneurship helps to involve individuals to the entrepreneurship.
Say for example; an individual experienced in repairing automobiles. The person will likely to be motivated to start an automobile repairing business anywhere by using his previous experience on the particular skill (Carsrud and Brännback, 2007). Though experience motivates people towards business on the particular occupation, there are some exceptions. Bill Gates was a University student who has some practical knowledge on the implementation of the digital technology and ultimately he became successful in business by based on previous experience. So, it can be said that experience is a great motivating factor for influencing mindset towards entrepreneurship.
Recommendation – Entrepreneurship and Small Business Management
There is no alternative to business in the economic development of the nation. Entrepreneurs are not borne but they need to be developed by properly implementing and practicing the traits, characteristics, and skills of the successful entrepreneurs. The characteristics, traits, and skills of the successful entrepreneurs must be studied and implemented in practice to generate quality entrepreneurs and bring revolution in the expansion of the business (Kent, 2015). In this paper, it is observed that businesses have wide impact on the economy and society. Economy cannot flourish and social problems will be increased when businesses stops their services. So, government should take proper steps to accelerate growth in the business. Moreover, legal laws and regulations must be designed in such a way that facilitates business operation.
Conclusion – Entrepreneurship and Small Business Management
Different entrepreneurial ventures are important because all have their distinctive functions and importance. Entrepreneurship plays vital role in the development of economy and society. Entrepreneurship serves economy as dynamic process of creating wealth and innovative tools and procedures of making wealth. In the aspects of the creation of job opportunity, acceleration of innovation, and improvement of the social and economic indicators, there is no alternative to entrepreneurship. The role of entrepreneurship in creating employment cannot be denied in any way. Businesses have wide impact on the economy and society. Economy cannot flourish and social problems will be increased when businesses stops their services. So, startups should be encouraged and promoted to accelerate economic growth of United Kingdom.
References – Entrepreneurship and Small Business Management
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Bosma, N. (2013). The Global Entrepreneurship Monitor (GEM) and Its Impact on Entrepreneurship Research. Foundations and Trends® in Entrepreneurship, 9(2), pp.143-248.
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Frederiksen, L., Wennberg, K. and Balachandran, C. (2016). Mobility and Entrepreneurship: Evaluating the Scope of Knowledge-Based Theories of Entrepreneurship. Entrepreneurship Theory and Practice, 40(2), pp.359-380.
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Southwest, I. (2019). 7 Characteristics of An Entrepreneurial Mindset — and How to Develop Them – Invest Southwest | Venture Madness. [online] Invest Southwest | Venture Madness. Available at: https://investsouthwest.org/7-characteristics-of-an-entrepreneurial-mindset%E2%80%8A-%E2%80%8Aand-how-to-develop-them/ [Accessed 9 Dec. 2019].
Stevenson, H. and Sahlman, W. (1986). The importance of entrepreneurship. [Boston, Mass.] (Soldiers Field, Boston 02163): Division of Research, Harvard Business School.
The Balance Small Business. (2019). What Is the Actual Impact of Small Business on the Economy?. [online] Available at: https://www.thebalancesmb.com/small-business-impact-on-the-economy-4175064 [Accessed 9 Dec. 2019].
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