Qualification - Higher National Diploma in Business (RQF)
Unit Name - Entrepreneurship and Small Business Management
Unit Number - Unit 9
Assignment Title: Entrepreneurial Ventures and Exploration of the Entrepreneurial Mindset
Learning Outcome 1: Explore and illustrate the range of venture types that might be considered entrepreneurial.
Learning Outcome 2: Assess the impact of small businesses on the economy.
Learning Outcome 3: Determine and assess the key aspects of an entrepreneurial mindset.
Learning Outcome 4: Examine the different environments that foster or hinder entrepreneurship
Part 1 -Entrepreneurial Ventures Scenario
You currently work as an intern at a Consultancy Firm that provides advice and market intelligence to small businesses and entrepreneurs. The firm is in the process of updating its services to meet the growing needs of their clients and prospective clients and your department has been tasked with investigating different types of entrepreneurial ventures and their impact on the different levels of the economy and at the international level.
The Team Leader has broken down the task and distributed it among the team members and you have been assigned to Explore and illustrate the range of venture types that might be considered entrepreneurial and to Assess the impact of small businesses on the economy. You are to present your findings in a Report Format addressed to the team leader.
In carrying out the investigation, you are to aim at producing a report that Critically Examines the scope, development and growth of entrepreneurial ventures and also Critically Evaluates how small businesses have an impact on different levels of the economy (local, regional, national) and in an international context.
As Guidance, the report Must Examine different types of entrepreneurial ventures and Explain how they relate to the typology of entrepreneurship and also Explore the similarities and differences between entrepreneurial ventures. An Investigation into a diverse range of entrepreneurial ventures to demonstrate an understanding of entrepreneurship in both the public and corporate sector could enhance the quality of your report.
You Must also Interpret and Assess relevant data and statistics to illustrate how micro and small businesses impact on the economy and Explain the importance of small businesses and business start-ups to the growth of the Social Economy. An Application of relevant data and statistics to Evaluate the differences small, medium and large businesses make to the economy, could be undertaken as part of the report.
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Entrepreneurship is all about haziness, danger, catastrophe, and success. These ventures typically deal with innovative and new contributions. These type of venture mark rapid development along with high returns and they have a significant impact on economy. They are really helpful in job creation because they show immense opportunities. This file is going to discuss about entrepreneurial ventures, its scope growth and development, impact of small businesses, types of ventures, their relation with typology, similarities and differences and their role in growth of economy.
1 Entrepreneurial Ventures
An entrepreneur refers to a person who initiates and runs the business with a limited set of resources with planning strategies,and that individual is responsible for the risks as well as the rewards of the business venture.This sort of business venture usually incorporates a new product launch or new product service. The entrepreneurial venture is the business thatdoes not encompass the already existing and running business model.The entrepreneurial ventures aimed higher ratio of returnswith an equally high level ofuncertainty.The individual who is the entrepreneur usually willing to take decisions which involve risks regarding his/ her financialsecurities and career, the time and also include the capital on uncertain ventures, the arrangement of necessary capital, manufacturing locations., raw materials and the skilled employees(H, Neumeyer, Jang, & Kuratko, 2018).Many other aspects are under the control of the entrepreneur, which include the marketing of the service or product, the sales element and the distribution.
1.1 Scope, development and growth of Entrepreneurial Ventures
Entrepreneurship is a process that involves innovation that reallocates the resources to new openings and opportunities. It often involves the creation of new innovative opportunities through the combination of skills that involve risk-taking and certain resources. The entrepreneurs usually face some challenges and problems due to the plans which they create personally and believe that they are creating something innovative and at their best but at times they face rejection of these innovative ideas also as they develop these creations on incomplete information and the evaluation of related factors usually get ignored by them. The entrepreneurs usually make realistic and constructive criticism and evaluate the business on the parameters of previous strategies and plans (Alicia & Gulati, 2017). They evaluate the strategies adopted by others also and then before the adoption of such innovations; they constructively consider both the positive and the negative possibilities of those adoptions(Joã, Fernandes, Ortiz, & Alves, 2017).
Growth is risky but is one of the necessary procedures for new startups for the sake of survival. The growth of entrepreneurial ventures can be assessed in the form of customers, revenue, the context of the employees, liquidity, geographical locations, profit and several other associated dimensions. Irrespective of the growth type, the limitations always exist. An entrepreneur who acknowledges the risks, and understand the importance of risk, possess more chances of growth as compare to the one who hesitates and avoids the risks. The development and growth help the businesses to establish legitimacy and create new opportunities to grow. Large businesses possess statistically fewer chances of failure. The businesses find it easy to avail of the investment capitals right after the period of development. The businesses that crossed the initial hurdles at the beginning of the startup are much likely considered to be stable(Friederike, Baker, Audretsch, & Gartner, 2017).
The increase in the ratio of liquidity and profitability usually comes with the size of the firm. The increase in the ratio of profitability provides a chance of successful history to the organization, which the investors and the partners are more willing to trust. After this success, the finances and assets will become easily achievable as compare to past experiences. This growth provides an opportunity for the organizations to develop new networks and connections, and ultimately the business able to get access to the new market. With the advancement of these new connections, the businesses became able to achieve an increase in the profitability, sales and create powerful influence in the market also.
Entrepreneurial ventures are as significant as other businesses. Because of investment by people in new businesses, and the youth seems to be interested in staring the businesses which they own apart from doing traditional jobs, the scope and development of this sector are growing. Over time, businesses are moving towards innovation and ready to become part of new ventures and develop creative ideas. The consistent rise in the percentage of small and medium industries is the indication that there are more entrepreneurs, which means they can contribute more towards the economy of a country. 10 out of every 20 companies are considered to be medium enterprises. Small scale businesses provide positive scope for the growth of these ventures(Kasemsap, 2017).
These ventures have a great opportunity in the service sector as compared to manufactured products. They have more chances of development in small scale businesses. Because small scale enterprises tend to show a higher scale of productivity, low turnover of labor and high efficiency, these types of ventures have huge scope in the industrial sector, service sector and agriculture industries. Small scale industries have a special place in the industrial sector. They approximately contribute 45%in the profit of this sector.
This sector is providing a huge scope for entrepreneurs for the development of their businesses and usingthe latest technology to create innovative products. Also, they are the key players in creating employment opportunities and have an important role in the growth of national income, consumer goods and development of the regional sector. These ventures have a massive scope in the agriculture sector. By creating the link, rural entrepreneurs can use different prospects in dissimilar areas of agriculture like farming, marketing and dispensation. They ensured the passable flow of credit with small limitations. The service sector, because of its great extension, has gain greater importance with these ventures. This sector includes hotel industries, tourism, transportation and many more.
1.2 Impact of small businesses on different levels of economy
There are different large and small markets in the world with different needs and demands. With the help of startups, almost 1000 people out of every ten thousand get new jobs, which is beneficial for the economy. They are beneficial in tax collection, stick consumption, manufactured goods, demand and construction. The impact on different levels is as follows:
• Local economy: Small business provides a platform to sell products and services to the vast community in small areas. Each market has different shops to fill the needs of the community in the areas where the population is above 10,000 people; these shops can be found easily with varieties to cater to the market, which in the long run, becomes the reason for economic growth. These businesses create jobs in big corporations or people who may not be able to work in
• Regional economy: they are beneficial for the regional economy in so many ways, such as they provide new investment opportunities and form economic capital and the potential, which is essential sustainable growth economic growth.
• National economy: small industriesalmost contributetowards half of the GDP andarereason of job creation for the nationalities due to which the inflation rate is suppressed.
• International economy: SME's increase competition among different companies in the world by creating a win-win situation with the help of innovative products. It ensures a flexible flow of money across different levels and creates jobs internationally.
Types of Entrepreneurial Ventures
• Small business entrepreneurship
In the current business world, most businesses are still considered to be small businesses. These small entrepreneurial ventures of the United States mostly employ the workers who are non- governmental. The small business ventures are barely profitable, but these entrepreneurial ventures make the profits to meet the living requirements of their families and can easily support the respective families(D & Solomon, 2017). This type of business is usually funded by family, friends, and business loans. Examples of this business are the hairdressers, electricians, grocery stores, carpenters, consultants and plumbers.
• Scalable Startup Entrepreneurship
Entrepreneurs with this type of entrepreneurship start their business by keeping in mind that they can bring a change to the world. The venture capitalists fund them,and these entrepreneurs engage the best employees with themselves. Their goal is to find a repeatable and scalable business model. When they get assured about the model, the funding from the venture capitalists is the only basic requirement to grow the business.Examples are Facebook, online shopping of electronics, and many other products, Instagram etc.
• Large Company Entrepreneurship
Thisentrepreneurship develops and launches new products to meet the requirements and needs of the customers. They launch new products with the changing demands of the customers in the market as well as the innovations are made according to the technological advancements.These companies usually follow this step by partnering or buying innovative companies like Google, Samsung, Microsoft, etc.
• Social Entrepreneurship
It involves the creation of the products and services which an entrepreneur tries to solve the social problems and needs. The goal of social entrepreneurship is to do efforts to make the world a better place,and they are not aimed to make profits or money(Andrea, Soriano, & Marqués, 2016). For example, nonprofit organizations.
2.1 Relationship of these types with the typology of entrepreneurship
Typology can be labeled as the cataloging of class and group, which have common features. There are four types of typologies of entrepreneurship which are as follows:
• Survival venture: These are partial towards providing basic maintenance to entrepreneurship and their families. These forms are not registered have also do not have any banking relationship. They operate based on an ordinary asset. They do not promote reinvestment because of limited financial benefits.
• Managed growth venture: these are the most stable ventures and showed rapid growth over time. They gradually increase their amenities to launch innovative products to enter into a new market. Medium-sized enterprises are included in it.
• Lifestyle venture: these ventures are the basis of stable income and adopt maintaining approach and workable models of business. These are limited to local market competitions. They work with a usually constant number of employees.
• Aggressive growth venture: these ventures are based on technology and contain highly innovative probability. They are mostly dependent on equity and capital for the funds. These can be operative on national as well as on international levels. And covers large businesses.
2.2 Similarities and differences between entrepreneurial ventures
Based on Business structure size Ownership
Similarities Both private and public are preserved as an individual legal entity. A small and micro business is intended for market survival Ownership is with both the public and private sectors.
Differences • Public limited companies have the authority to sell their shares in the market, while private limited cannot.
• The goal of both public and private limited is profit maximization, but the primary goal of social enterprises is to aid the community. • The aim of medium businesses is expansion, while large businesses do not have worries, but they aim to rule the market. • Large businesses utilize their revenues for building things for the public to provide an advantage for society.
2.3 Importance of SME's &Entrepreneurship in growth of social economy
Small businesses are considered to be the mainstay for the economy of a country. They play a crucial role in the fulfillment of social life, daily life and business demands. Every startup is the part of the community in which it is obliged to serve the people to gain profit. Everyone wants to earn profit through different means, be it online business, small business or providing different kinds of services. Their exits millions of startups and small businesses, which serves the society to earn profit at the end. Because of which they have so much importance. It is necessary to know how these businesses are transforming the economy and how they are playing a part in the growth of the economy. The businesses that are crucial for each society are cloth stores, grocery shops, shoe stores, hotel industry, sanitary shops, plumbing services, electronic shops, mobile stores, petrol pumps, saloons, cyber teashops, legal consultancy and many others. These services are used on an almost daily basis and are necessary to fulfill living standards(Méndez, Luis, Mesa, & Alegre, 2019).
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Part 2 - Exploration of the Entrepreneurial Mindset
The firm has seen an increase in enquiries about an understanding of the enablers and barriers to business start-up and the personal characteristics of entrepreneurs and the impact of personal situational factors, including education and background. You have successfully completed the first activity and your team leader has assigned you the task of researching into theories and concepts aimed at Determining and assessing the key aspects of an entrepreneurial mindset and also Examines the different environments that foster or hinder entrepreneurships to come up with answers for these enquiries. You are to present your findings in the form of a Brochure titled "The Mindset of the Entrepreneur".
To produce a comprehensive brochure aimed at attracting high end clients in the city, you are to Analyse the characteristic traits, skills and motivational drivers of successful entrepreneurs, supported by specific examples and Critically Analyse how background and experience influences entrepreneurs, both positively and negatively, by comparing and contrasting examples.
As a guide, the contents of the brochure Must Determine the characteristic traits and skills of successful entrepreneurs that differentiate them from other business managers and Assess how aspects of the entrepreneurial personality reflect entrepreneurial motivation and mindset. You Must also Examine, using relevant examples, how background and experience can hinder or foster entrepreneurship.
An Exploration of different lines of argument relating to entrepreneurial characteristics and an Analysis of the link between entrepreneurial characteristics and the influence of personal background and experience to specific successful entrepreneurs could be carried out to clarify the age-old question of whether
entrepreneurs are "made" or "born" in the brochure.
4 Traits for Entrepreneur:
Entrepreneur seems different from general peoples with their skills and experience. Most important characteristics of Entrepreneur are listed below:
• Motivated: Entrepreneurs are inconceivably motivated to succeed. Any entrepreneurs never give up even in the worst situation. Positive attitude and aptitude towards the goal with a lot of hard work make the entrepreneurs succeed.
• Planning: Every business person takes steps after planning. They critically analyze the situation and apply their experience to get a move for success. They have alternative plans and assessments of future risks with management strategy. Preservation and stubborn behavior are showed by entrepreneurs to get their target.
• Risk Taker: Entrepreneurs never get afraid of risky situations. They always go for a breakthrough with sense to tackle the situation. They believe that they never can be successful without facing failure.
• Determination: Entrepreneurs always have preservation for their goals. They never end up the struggle with failure. Try again with determination is the key characteristic of successful entrepreneurs.
• Flexible: Entrepreneurs considered flexible as they have good skills in situation management. They can turn the situation and plan when the problem arises. Great move on time lead them towards a breakthrough.
• Collaboration: Businessman always respects the stakeholders and considered the stakeholders and considered them as an asset. They take serious action for consumer comfort. Entrepreneurs collaborate with employees and motivate them to work hard. An entrepreneur monitors the staff members and mark their strengths and lacks. Further entrepreneur guides the team by the workshop or individual dialogue to make the process efficient.
• Self-Promoter: Entrepreneurs never feel ashamed while advertising their products. In a new startup, an entrepreneur always works with a team to make the product famous in the market. Leaders always develop strategies and perform it practically to motivate the team.
• Listening: A successful entrepreneur always listens to the public and take their opinions positively. Entrepreneurs never show arrogant behavior to one who gives him advice. This patience with determination guides the entrepreneur towards the target.
• Foresight: Foresight is a commendable quality. Businessmen with foresightedness can predict the future trends of the market. Entrepreneurs always work in that domain, which they think most appropriate according to the future.
• Creativity: Innovation and creativity are the most important property of an entrepreneur. They always try to produce, which will attract more audiences or something new, which can facilitate the customers(Forbes, 2018).
• Competitor: Current market has a lot of competition, and it is too difficult for anyone to start up their product without competition. An entrepreneur always takes competition positive and as motivation. A leading businessman always hasthe policy to handle the competition and sustain their customers.
• Involvement: Entrepreneurs always participate in the execution process. With monitoring, the working entrepreneur can enhance the plan to get optimum benefits from the product.
5 Motivational Drivers for Entrepreneur:
Passion: Passion is the most important for anyone to follow a goal. Entrepreneur seriously works on passion and try to make a change in the world. For example, when Bill gates were working on Microsoft, he did not have any idea that for a future scenario. But he just follows his passion and goal to produce a change in the world.
Personal satisfaction: Many successful entrepreneurs work for their satisfaction, not for money. They have the aim and struggle hard to achieve their dream. Guy Kawasaki said in the book, Art of the start, that entrepreneur work for a valuable meaning.
Personal Growth:Entrepreneur enjoys their struggle period along with achievements. Entrepreneur gains more experience, skills and memories from the journey which help them to grow. They always make a try for success and knowledge. All growth ultimately proves beneficial for the business.
Values: Entrepreneur has a goal with value and belief. They want to work for the welfare of community. When an interviewer asked Mark Zuckerberg that why he developed Facebook, he replied, "It was not for the money, my team and I want to develop a platform for information flow(forbes.com, 2015).
6 Influence of Background & Experience on Entrepreneurship:
Having background and experience while developing or growing a company is something very important for any new or existing company. Every person has his/her idea and thoughts about starting and finishing anything. In business terms, people have different ideas about businesses and their development. Some people always thought that having good ideas for entrepreneurship purposes is always a big requirement and necessary need, while many other people though that communication with people and competitive market business is something that helps positively for developing any business or expanding one. In recent studies, the fact is proven that background experience about any specific business is a key point for building any new business. A person who is willing to build a business must have a background related to the business that works as a big positive for the person. Having experience tells the person what he/she is doing and what are the most probable outcomes of the work. Experience is something that helps is getting many new business ideas for growth purpose. Innovation, which is a critical need of the current time, is something that comes in hand by hand with experience(Staniewski, 2016).
The biggest positive about the experience while influencing entrepreneurship is that there is always a time comes when the company feels low in critical thinking and generating the desired result for achieving the goals, so in such a situation, experience helps in establishing the company and not letting down the service. When it comes to growing any existing business and improving the services, having a background related to the business helps in creating competitive advantage. A new person always finds it hard to deal with difficult situations,especially whenmarket, low sales, competitors and demands of customers are pressing issues for the company. A well established and experienced entrepreneur understands the fact and figures of the market and always pays attention to the changing trends of the market that can affect the company in many different ways.
Coming to the influence of experience on entrepreneurship negatively, there are many situations when prior experience can work negatively for any new startup business or existing one. Many times people with prior experience thought that there is no need to analyze the current situation and market trends because they feel that they have enough skills and experience in their hands. Sometimes it works, but sometimes it backfires. Yes, the fact that experience helps in analyzing factors easily and effectively but neglecting current situations always results negatively for entrepreneurs. People stop taking opinions and ideas from others because they feel that they have all the required terms, but it is not a positive frame of work for any business (Iglesias, Markovic, & Rialp, 2019).
Examples and Analysis:
Situation and Example Positive influence Negative influence
Starting a business Experience helps in understanding the correct time and ethics to start the new business that will help in major benefits. It also works positively for building relations inside the market. Experience can negatively influence on a new business. Overconfidence and not analyzing the situations can result in bad results, and business can be the low-value business in no time.
Direct competitor emerges Experience entrepreneurs always pay high attention to different competitors emerging in the market. In market services and products of a business are highly dependent on a sense of competitors. Sometimes experience person focuses only on their working ethics and is not able to pay high attention tothe new and sudden competitor. It works as a negative flaw in business and can cause long term loss.
Working of product Sometimes products delivered not match the requirements of clients and the market. The experience and background related to the business help in identifying the reason and making the product better in many ways. When the product fails to catch the attention in the market, many experienced people fail to identify the problem because they are not in a state to accept the reason or fault in the product.
Entrepreneurial ventures are really helpful in the growth of economy and are providing great opportunities for the workforce who are not be able to get job in big industries. The availability of products and services at convenient ranges is allowing people to invest in these ventures and enjoy greater return with innovative products and services. Although there are differences in different ventures but their ultimate goal is to provide greater prospects and distinguish products that helps a market to grow rapidly.