Qualification - Higher National Diploma in Business (RQF)
Unit Name - Entrepreneurship and Small Business Management
Unit Number - Unit 9
Unit Level - Level 5
Assignment Title - How to Set Up A Small Business From An Entrepreneurial Mind-Set
Learning Outcome 1: Explore and illustrate the range of venture types that might be consider 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 of hinder entrepreneurship.
Assignment brief:
A small medium trading company, being registered as sole proprietorship, is planning to approach your consultancy firm to develop its' business. You, as a business consultant, are required to give advice to the trading company in various aspects of business development (e.g. different range of venture type).
Since the trading company is such a small company and does not have professional experts. Therefore, it has only a flat structure and a manager to deal with the business issues himself. As the workload of daily operation is being complicated and is to further streamline the business, the manager plans to outsource the business development planning.
You have agreed to offer your consultancy services under a half yearly contract which seems to be the most appropriate arrangement due to shortage of funds. After having signed up the contract, you are being asked to provide a report to the manager of this potential organization.
Perfect Unit 9 Entrepreneurship and Small Business Management - Higher National Diploma in Business (RQF) Assignment Help Service from PhD-Qualified Experts!!
Introduction
The case study identifies concerns of change management for a small and medium based trading company active under sole proprietorship basis. In this report, the main intention would be to see the motion of the company with the support of the consultancy firm for bringing improvement within the organization. Change management in terms of mergers and acquisitions will help the company work better. Also, the report will identify the objectives of the organization set to attain a profit. Here, the concern will be on identifying the characteristics of small and medium sector enterprises and associated roles. Further light will even be on understanding the aspects of entrepreneurship and how it is aligned with social, economic, and other factors. Next, the report would identify about differences between entrepreneurs, intrapreneurs, and managers. The next information will be centered on Innovation and creativity adopted by small-scale industries and associated concerns towards the maintenance of intellectual and property rights. Further, the discussion would be centered around understanding how SME's can contribute to the economy at the local, regional and national level by using several parameters like that of business size, turnover, growth factors, profit, advantage and disadvantage areas in terms of developing an entrepreneurial mindset, and further measure it concerning situational factors. Therefore an entrepreneur just needs to look after the staff he works with, but even take care of factors required to motivate others, get ahead of cultural differences, checking family concerns, and other means. an entrepreneur must well align several factors right from his cultural background, to character traits and the economic situations under which he is in. Not just this, within every organization, there is a need for managers or leaders who are there to assess the risk areas, and carry out action plans for intervention in time.
You are required to prepare a report monitoring the importance of developing business skills needed in reviewing and managing the performance of a small sole proprietorship. In addition, it should state how useful it is to focus on the processes involved, through change management, of reviewing and improving the performance of a small medium trading company. The report must also feature the revision of business objectives and plan to incorporate proposed changes. It should also highlight the monitoring of improvements in the performance of the business over a given timescale.
Solution:
The rationale for the formulation of this report
This report is all about understanding aspects associated with entrepreneurship and small businesses by considering several aspects like that of how SMEs work, and how businesses are facilitated. The rationale of this report is to check for potential areas of business development to suit customer needs in future.
Brief Profile of the company, missions, and objectives implied
The given company is an SME based trading company that is run by one proprietor. However in the absence, if professional experts are looking for needful consultation for business development in venture types (Ayandibu & Houghton, 2017). Their mission and vision are to carry or business development in the best possible manner. Here, the potential client is involved in small/medium business running "trading", and all functions are monitored by the sole proprietor.
Introduction on education/industry experience of the sole proprietor
So far, there is no sufficient data available about the sole proprietors' educational and industry-based background. However, it is indicated from the case study that the proprietor is looking for further business development of this trading company within limited funds, and professional experts that they have in hand.
The name of the sole proprietor is Henry Vikings (hypothetical). He has severed the industry for over 10 years now. He is an MBA in business management, and it is this education and professional experience that will help the company to prosper in the long run.
Factors influencing decisions to start a business
The decision to start up a business involves several factors like leaders involved, team development, capital in hand, ability to deal with crisis response, and other factors.
Introduction on franchise, merger, and acquisition
Businesses that work based on "franchise" solely intend to carry out the business expansion. The franchise generally licenses intellectual property, several procedures, and others by which e/she can carry out business effectively.
On the other hand, merger and acquisition is when a business that works based on merger and acquisition generally has characteristics where a business or company is entirely merged and taken over by another company i.e. more viable company, for attaining mutual benefits in business and survival in the long run.
Differences
|
Franchise
|
Merger
|
Acquisition
|
|
Business chains work solely as one entity i.e. other organizations can run the business, but have to prove loyalty for using it.
|
Two companies get merged into one
|
One organization is bought by another.
|
|
Sole decisions involved up to a certain limit.
|
Mutual decisions are identified.
|
There are many situations of hostility.
|
|
Involve cancans like intellectual property, licenses and others that may be expensive to implement.
|
More expensive
|
Less expensive.
|
|
Stakeholders are associated with business expansion solely.
|
Associated stakeholders have a chance to increase their net worth.
|
No such chance.
|
|
Several procedures taken place one after the other.
|
Time consuming.
|
Generally not so time consuming.
|
Financial analysis for the last three years
Financial Statement of J. Nossa Supply Company
|
2017
|
2016
|
2015
|
|
HKD
|
HKD
|
HKD
|
|
Sales
|
2,688,000
|
2,257,900
|
1,986,900
|
|
Less: cost of goods sold
|
(558,000)
|
(468,700)
|
(412,450)
|
|
Gross profit
|
21,300,00
|
1,789,200
|
1,574,450
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
Advertising
|
34,000
|
27,000
|
10,000
|
|
Rent
|
86,000
|
83,000
|
83,000
|
|
Depreciation on Furniture and equipment
|
30,000
|
30,000
|
72,000
|
|
Software
|
4,500
|
4,500
|
3,500
|
|
Salaries and wages
|
96,000
|
80,000
|
70,000
|
|
Other
|
50,000
|
36,000
|
20,000
|
|
Sub-total:
|
(3,00,500)
|
(2,60,500)
|
(2,84,500)
|
|
Net profit
|
18,29,500
|
15,28,700
|
12,62,950
|
Legal requirements while establishing business overseas
To set up a business overseas, the entrepreneur has to check for certain requirements like that of identify documentation for business initiation in a country, registration and post-registration documentation, and other means. Some of the main documents of concern arte that of property rights, checking across political climate parameters in the country, he checking across all Criteria associated with legal mean of incorporation processes, registration documents, i.e. notarized copy of passport of the entrepreneur, company related documents i.e. Articles of association, and other parameters. In terms of patent rights, the individuals get right over access of certain means gore a stipulated time period (mostly up to 20 years). There are additional factors associated with overseas related like related to administration, business plan, network building, marketing plan execution, and other parameters.
Innovation and creativity
Innovation is the process of altering an existing idea and making a change into it while creativity deals with creating new unique ideas. The creativity is done by the inner soul. Everyone is different in their creativity. Innovation can be done in a stable position and can be measured but creativity could not be measured. In an organization, different minds work together. some could give innovative ideas and some could implement it creatively
For example, I have an SME and I hired a consultancy team for better working of my company. This is because they could give me innovative ideas to get profits. This is their creativity that they assured my company to be able to attain profits. The professional experts of that consultancy have perfect innovative ideas and a creative team to handle the current situations that my company is facing (NGUYEN, 2020).
Importance of SME in the development of economies
SME plays a very important role in the development of the economy because the investment is low in such a business. The government supports SME for the development of the country in which it is active, and also be able to provide employment opportunities to local people. SME provides better chances of providing goods and services, employment, innovative market, and even befit a tough competition to other companies all of which leave a great impact on the economy. At the regional level, the SME gives the choice of products and services and the opportunity of providing goods and services that are only needed by some region for a particular time. At the local level, entrepreneurship inspires people to set up a new business by letting them use their creative minds for business development (GAMAGE & GAJANAYAKA, 2017).
Demographic analysis of the target market
In terms of demographic factors, developing a business depends upon the ethnicity of that area, and preferences of people in buying certain products and services, individuals and their education levels, and other factors. Here, the proprietor is a male, aged 35 years of age (hypothetical). He is an MBA in business management and actively involved in this profession for several years now.
LO1 Exploration and illustration of the range of venture types for entrepreneurship
Types of entrepreneurship
• Small business entrepreneurship: Here, a person works to attain a living and not to make high profits. Examples are small stores, small travel agencies, where investment is very low.
• Startup Entrepreneurship: Here, the entrepreneur has visions and missions to start a new business with new logic. It can be an experimental business with the most talented employees. This kind of entrepreneurship can be on a large or small scale. It all depends on the capital investment that can fulfill the business and the projects for the future.
• Large company entrepreneurship: Here, the business is in the new market and new customers are handled, with large investments made on the business. It is innovative to sustain business in the economy and the entrepreneur is ready to adopt changes in technology or other means.
• Social entrepreneurship: Here, the concern is laid mainly on social concerns. It is done without investing or even gaining profit, and the main intention is to serve social service to those who are in need.
M1. Range of entrepreneurial ventures in the public and corporate sector
As already explained, there may be either of four types of business ventures like scalable, start-up ventures, company, or social ventures.
D1. A critical examination of Social development and growth of entrepreneurial concerns
Entrepreneurship is associated with generating finances that help individuals to sustain and survive. Therefore it is connected with social parameters too.
Hire Our Higher National Certificate and Higher National Diploma Assignment help Services Now!
LO2 Impact of Small business on the economy
Just like the present case, all businesses are identified with corresponding levels of origins and losses faced in business like that of profit earned, annual turnover well highlighted across profit and loss statement. These parameters help to explain about start-up business status in any market.
Potential for business prospects by considering the advantages/disadvantages associated.
Benefit arras involves the opportunity to enter into a new business profit in a new market and utilize the local talent of that country for business. There are chances of surviving business competition and evidencing growth. However, there are associated disadvantages like high costs in setting up the business, compliance risks, cultural barriers, and problems in managing business practices. There may even be problems in employee compensation issues and other means.
Skill sets required for SME and understanding difference (if any)
Entrepreneurs need to possess qualities like efficient leadership to help all the subordinate employees within an organization. They even need to have efficient marketing strategies. They should be able motivate each team member from time to time so that the latter can perform well. Additionally, they need to possess financial management capabilities, networking capabilities, and problem-solving areas to manage all kinds of entrepreneurial issues.
Entrepreneurial characteristics to deal with situational factors
There are many situational factors that the leaders have to handle within an organization. It can be understood through a situational model important for business the main factors are feasibility, perceived desirability that act subjective norms. These give rise to entrepreneurial intentions well aligned with situational variables and help an entrepreneur to act wisely within an organization.
Risks and uncertainties and reward factors associated while standing a business.
The risk and the opportunities and in business are just like a side of a coin. While setting up a business, the entrepreneur has to stay prepared for facing risks as well as get rewards. The product may not surely be liked by all customers. There may not be profits initially. At the time of expansion, he needs to divide responsibilities amongst available staff or make them prepared to face merger and acquisition for business development (if required). The geography may not support the product, natural disasters could also affect. There may be additional factors like political risks, unhappiness within workers, and other means.
To reduce risks in business, four mitigation risk strategies need to be followed:
1. To avoid the activity which has assured risk and may cause financial loss to the business,
2. Accepting the risk that can be borne and handled,
3. Controlling risk factors that can be controlled or reduced by using some means,
4. Transferring risk to another party if they cannot be handled on a sole basis (Lam & Mason, 2017).
Analyzing the company
|
year
|
2015
|
2016
|
2017
|
analysis
|
|
size
|
SME with less employee
|
SME with fewer employees
|
SME with less employee
|
For consecutive 3 years, the company remains an SME.
|
|
Turnover
|
The Company expenses in 2015 were high than the net profit.
|
Company expense in 2016 was higher than net profit
|
In 2017 expenses were more than the profit.
|
The expenses incurred were not recovered through profit and the company was facing losses.
|
|
Profit
|
The company earned a profit.
|
The company earned a profit.
|
The company earned a profit.
|
The company had a profit for three consecutive years but the expenses of the company were higher than its profit. Expenditure decreased marginally for furniture otherwise it continued to be at the same pace in other aspects.
|
|
Rate of growth
|
Slow.
|
Slow.
|
Slow.
|
The company did not have a high growth rate because they were facing losses every year (Korte, 2018).
|
Forecast Analysis (2018)
The company decided to adopt some changes in 2018 for having a good profit. The company tried to increase sales at a higher rate and slow down the cost of good sales. The company had a gross profit of 2556000. After deducting the expenses, the company's net profit increased as compared to 2017. This required changes to be brought in the form of mergers and acquisitions. The company approached Consultancy Company for increasing sales and reduces its expenses (Mansion, S. E., & Bausch, A. (2020).
International differences affect startup businesses because the rules and regulations of every country are different. If there is a fight between two countries then businesses get affected as the import and export stops due to the differences between the two countries. It results in the differences and losses that hamper the global economy. The international difference is here also in different kinds of rules and regulations at cross country level. For example, businesses that are established in America need to follow rules associated with importing and exporting goods and services in the USA (Morris & Kuratko, 2018).
M2. Evaluation of SME
SME helps to generate profits and growth that are important for a country. Even though funds and finances are limited; they can be handled well if maintained properly.
D2. A critical examination of the impact of SME over local, regional and national business contexts
SMEs are important at all levels as they help to drive profit, promise growth factors generate income and even employment opportunities for people.
Fast Track Your HND Assignment Sample in Business Assistant: Expert Assignment Help
LO3 Determination and assessment of key aspects of an entrepreneurial mindset
A proper entrepreneurial mindset of an entrepreneur helps in better working of an organization. It also helps in achieving the organizational goals of that organization. An entrepreneur must have innovative ideas to make better opportunities driven through positive, innovative, creative factors. Other factors are self-awareness, self-motivation, and persuasion, avoiding stress, curious to discover new things, flexibility, perfect leadership style, respecting others, positive reactions, passion, accurate vision. An entrepreneur must have a positive mindset for the business and all the other qualities mentioned which will help an entrepreneur in working with new changes and having a passion to achieve something (Mirzoev & Sobirzoda, 2019).
Entrepreneurs are not borne but made
Entrepreneurs are not born but made naturally because of their positivity, and ability to motivate others at work. They must have the capability to take risks and face challenges concerning changes in the working environment (Morris & Kuratko, 2020). A person who wants to become an entrepreneur can learn from the challenges. No one can become an entrepreneur if he/she does not have an interest in that business field.
The difference of skills sets between entrepreneurs and the managers in SME
|
Entrepreneur
|
Organization manager
|
|
1.Entrepreneur has a vision and is ready for taking risks in financial and other factors also.
|
1.A manager works according to his convenience just to get a salary and not for achieving the goals of the organization in many cases.
|
|
2. Entrepreneur focuses on making successful business to earn profits.
|
2. A manager is responsible for the smooth running of the business rather than expanding or investing (Kuratko & Audretsch, 2020).
|
|
3. Entrepreneur is motivated by his skills and achievement.
|
3. Managers just want a high level of position and high level of salary which can motivate him.
|
|
4 .The profit earned is enjoyed by the entrepreneur only
|
4. Managers get a part of the profit as remuneration.
|
|
5. If there is any problem, the entrepreneur with solving it solely and require less time= to do so.
|
5. If there is any problem within the organization, different levels of managers get involved in resolving it and it takes time to resolve the issue.
|
M3. Arguments against entrepreneurial characteristics
Entrepreneurial characteristics are one of the chief drivers of a successful business. However, there are other associated concerns too, upon which success of a business depends like that of availability of finance, skilled staff, and other stakeholders.
D3. Traits, skills, and motivational drivers of successful entrepreneurship with examples
Entrepreneurs are driven by several traits like that of efficient leadership, the ability to take risks, having, strong vision, to succeed, and others. For example, Steve Jobs, Tim Cook, Mark Zuckerberg have these aspects well.
LO4 Different environment that fosters or hinder entrepreneurship
The entrepreneurs can face challenges while setting up SME that are outlined as follows:
1. Trying to adjust concerning current market situations and scenarios,
2. Available resources,
3. The current economic situation of the country due to global pandemic i.e. COVID 19,
4. The changing environment,
5. Adjusting and adopting new technologies,
6. Withstanding competition in the market,
7. Selection of location for setting up the office,
8. Acknowledging the fact that the structure of the business may change,
9. The policies given by the government could be revised at the time of setting up of a new business (Gangi & Kebaili, 2020).
10. The taxes and the laws may be changed,
11. The growth of the market may be hindered.
The educational background of the entrepreneur may be a challenge for the entrepreneur because he may not have an idea of professional business which may become a problem for him. The age of the entrepreneur can also be a hindrance to the business. The gender of the entrepreneur is also a criterion as many riding female entrepreneurs may still have to face a lot of difficulties as compared to their male counterparts. The lifestyle of a person may also be a factor for becoming an entrepreneur but it can also be a hindrance as the more comfortable lifestyle one has, the more profit he wants to earn. The upbringing, the family, background, the culture from where a person belongs, give people an idea about that person who has established a business. It can be hinted that business would run in ethical ways or not, based on all these criteria. Because of different backgrounds, an entrepreneur maybe not be able to meet the requirements of product development or service for a business established in a country at a point in time (Leung & Thurik, 2020).
Let us take an example to understand the situation but how personal characteristics and upbringing affect a person to become an entrepreneur. A man has just completed his graduation and has a business mind. The boy did not join a job because he thought of setting up a small and medium-sized organization of importing of furniture. He decided because the financial condition of his house was not good and where he lived belongs to the hub for furniture manufacturing. So he decided to follow the economic trend and start a business will less investment. He had an innovative mindset with creative ideas. His father was already in the business of furniture, so he had the opportunity to acquire experience first, and then he could set up his own business. From start, he had the environment of business at home and this culture brought him to a stage of becoming an entrepreneur. He was ready to take risks and was ready to face challenges and to adopt the new technology to survive his business within the market. So he had entrepreneurial characteristics within him, positively influenced by cultural and economic conditions. Therefore, all these factors influenced him to become an entrepreneur.
M4. The link between entrepreneurial characteristics and influence of personal background and experience to successful entrepreneurs
Positive entrepreneurial characteristics like that of innovation, ability to face challenges, and other means, well-aligned with personal background, can help to develop successful entrepreneurs.
D4. Critical evaluation of how background and experience influence entrepreneurs (with examples).
If a person comes from a family background that falls with that business fro before, it is assumed that the entrepreneur would have more ideas about that business.
Conclusion and recommendation
Setting up a business is not easy, and running it successfully is even more difficult. An entrepreneur should always be ready to face all business challenges to meet the expectations of customers. The given case study has mentioned about small and medium-sized enterprise, which plays an equally important role for the economy. The presence of international differences may hamper businesses. The entrepreneur has to be ready both for risks as well as rewards. Above all, they should be able to motivate all in business.
Tailored Assistance for Entrepreneurship and Small Business Management Assignments in the UK
Seeking custom-written assignments for your higher education needs? Your search ends here! Our team of qualified and experienced writers specializes in various types of academic papers. We offer assistance with a wide range of academic writing service tasks, including:
Need assistance with UK paper writing and dissertation writing? Our custom-writing service specializes in crafting top-quality dissertations. With our reliable and fast online service, we strive to simplify the process for you. For any inquiries or concerns, feel free to reach out to our dedicated support team!