Developing Entrepreneurial Skill

Table of Contents
Section 1: Different Types of Entrepreneurships.........................................................................................2
Introduction.............................................................................................................................................2
a. Types of entrepreneurial ventures....................................................................................................2
Similarities and dissimilarities.................................................................................................................4
b. Impact of small business on the economy........................................................................................6
c. Differences between Small, medium and large business:................................................................8
d. Importance of small business and start-ups in social economy......................................................10
Conclusion.............................................................................................................................................10
Section 2: Understanding Entrepreneurs....................................................................................................11
Introduction...........................................................................................................................................11
a. Successful entrepreneurs:..............................................................................................................11
b. Entrepreneurial success and impact of situational and motivational factors:.................................12
c. Relation among entrepreneurial personality, motivations and mindset..........................................13
d. Influencing factor on the success of entrepreneurship:..................................................................13
Conclusion.............................................................................................................................................14
Section 1: Different Types of Entrepreneurships

Introduction
A person who is willing to take risks whenever he sees an opportunity and starts their own
business or operates alone in the business world in an attempt to make profit is known as an
entrepreneur (Cambridge International dictionary of English, 1995). They play a vital role in any
economy as they are able to improve standard of living, create wealth and reduce unemployment
rate. This section will focus on different types of entrepreneur, impact on economy and business
and their importance for economic growth.

a. Types of entrepreneurial ventures

Since the concept of entrepreneurship evolved in 1930s various entrepreneurial ventures were
introduced. Among the most important ones are discussed below:

Social enterprise: Social enterprise is a unique combination of commerce with social issues
(Tyre, 2019). Their main concern is to improve the world rather than making profits. They do
earn some profit but the focus is on social or environmental change.

Examples where this approach has worked tremendously are Tony’s Chocolonely, Fairphone,
and Closing the Loop (World Economic Forum, n.d.) etc. Tony’s Chocolonely is an open source
platform that collects ensures slavery free workplace and enables cocoa farmers to earn
sustainable income.

Figure 1: Tony' Chocolonely

Logo (Pim, 2019)

In UK few of the famous social enterprises are Selnet, Creating Enterprise and Hubbub
Enterprise. Selnet is an award winning social enterprise that provides a range of capacity
building support services, resources and opportunity to businesses (Welcome to Selnet, n.d.).
Hubbub Enterprise collaborates with other organizations to create, co-design and solve
environmental issues with innovative approach (Hubbub Foundation, n.d.).

Figure 2: Selnet Logo (Welcome to Selnet, n.d.)

Figure 3: Hubbub Logo (Hubbub Foundation,
n.d.)

Lifestyle Entrepreneur: A lifestyle entrepreneur tailors their business idea in order to support
the lifestyle they desire (Truex, 2020). They have a degree of freedom to work according their
passion and are only interested to make a certain income that supports their lifestyle choice.

Examples of successful lifestyle entrepreneurs are Tim Ferriss, Pat Flynn, John Lee Dumas,
Derek Halpern and so on (https://berghconsulting.com/, n.d.). Tim Ferriss is an author most
popularly known for his book “The 4- Hour Workweek”, writes practical books that reduces
workload and stress.

In UK extraordinary list of lifestyle entrepreneurs include Ben Jeffries, Belinda Kirk, Claire
Novorol and many more (Cotton, 2019). Belinda Krik is a traveller, motivational speaker, Fellow
of the Royal Geographical Society and inspiration to others to live adventurously. Dr. Claire
Novorol is a trained physician and co-founder of ADA’s medical affair where she ensures
products meet the consumers’ needs.

Innovative Entrepreneurship: Innovative Entrepreneurship is when the entrepreneur

transforms innovative ideas into high demand, marketable products, service or technology. They
are creative, visionary, and are always aware about opportunities around them to act before
others do (Crudu, 2019).

Some innovative entrepreneur ventures that changed the world is Apple, Uber, Amazon,
Facebook, Google, Netflix and many more (Cail, 2017). These innovative business ideas have
transformed the way of living of people and enhanced development of technology.
In UK this list
of ventures
Figure 4: Innovative Entrepreneur Venture around the world (Zhung, 2019)
consists of The
Accelerator Group, FinnCap, Wonga, Foresight group, Matrix and continues (Growth Business,
2020). These are fast growing and successful ideas that are contributing in Britain’s economic
growth.

Figure 5: Innovative Entrepreneur Venture in UK (Growth Business, 2020)

Similarities and dissimilarities:

Innovative
Similarities Social Enterprise Lifestyle Entrepreneur
Entrepreneurship
Closing the Loop
Derek Halpern found
found the
realised an opportunity in
Ability to find opportunity in Uber found an
using his public speaking
opportunity and collecting recyclable opportunity in taxi
skills to be a
impact the society items (World service (Cail, 2017)
motivational speaker
Economic Forum,
(Berghconsulting, n.d.).
n.d.).
Creating Enterprise
invests profit for
Amy Porterfield gives
tenants and local Facebook connects
marketing consultation
Creative in operation people into the world (Cail,
online(Berghconsulting,
employment 2017)
n.d.).
initiatives (Creating
Enterprise, n.d.)
Lush solves the Pat Flynn solved the of Google solves all
problem of using income model for new kinds problems by
Solves a problem
chemical elements in entrepreneurs via his internet services,
cosmetics by podcast(Berghconsulting, search engine,
 substituting it with advertising,
vegetarian element n.d.). consumer services
(Tyre, 2019) and others.
Micro Finanza is a Fincapp
financial institution Jhon Lee Dumas podcast advises ambitious
Unique business
that provides micro focuses on financial and companies to right
model
loans (Microfinanza, lifestyle freedom investment
n.d.) (finncap,n.d).

Innovative
Differences Social Enterprise Lifestyle Entrepreneur
Entrepreneurship

Any social Any lifestyle

Any innovative
enterprises purpose entrepreneur’s goal is to
entrepreneurship’s
Purpose of business is to improve the support their passion and
purpose is to create
society and maintain their desired
innovative solution
environment. lifestyle
Technological
Ben and jerry’ is a innovativeness is in
This entrepreneurship
separate legal entity root of the structure
Structure of business venture does not have
(World Economic of The Accelerator
any legal entity
Forum, n.d.). Group (Growth
Business, 2020)
TOM’s contribute
A lifestyle entrepreneur
half of their income Apple’s main goal is
Profit making makes only as much a
to underprivileged to maximize their
system needed to maintain their
children (Tyre, wealth (Cail, 2017)
lifestyle (Truex, 2020).
2019)

The size of these

The size of this
These businesses are businesses can range
business ranges from
Size of business usually small in size and from small, medium
small to medium
operation to even large
enterprise
corporation.

Table 1: Similarities and Dissimilarities of Social enterprise, Lifestyle entrepreneur and Innovative Entrepreneurship
 b. Impact of small business on the economy
Micro Business: Micro business is an informal form of business that consists of less than 10
employees and functions as sole proprietorship whose annual turnover does not exceed 2 million
Euros (The Company Warehouse, 2015). It focuses on a single product or service and maximizes
its profitability. Micro businesses are famous because they require less capital to operate and
easy to maintain. Some popular micro enterprises in UK are Boss Brewing, Issoria, Mantons
Cards, Proviz, WriteUpp and so on (Caldwell, 2018).

Small Business: Small business is a privately owned corporation, partnership or sole

proprietorship that consists of 10-15 employees with an annual turnover of 2-10 million Euros
(The Company Warehouse, 2015). These businesses are goal driven, budget minded, confident
and focused in nature. Some of the most popular small business in UK is Pure Planet, RedRock
Consulting, Source Breaker, The Furniture Practice and many more (Best Companies, 2019).

Impact of Micro Business on economy: Among around 5.9 million businesses in UK 99.9% of
them are classified as small to medium sized enterprise in which 96% are labeled as
microbusiness (SME Loan, n.d). From long standing family business to new start-ups,
microbusiness account for 21% of the UK’s turnover.

Figure 6: Growth of business in UK (Merchant Savvy, n.d.).

According a survey conducted by SME Loans, Microbusiness employs 17.3% to total workforce.
Microbusinesses are responsible for one-fifth of UK’s trade economy (SME Loan, n.d).
Technology sector dominates microbusiness so innovative tech solution holds genuine growth
potential (Merchant Savvy, n.d.).

Figure 7: Investment Sector of Microbusiness (Merchant Savvy, n.d).

Impact of small business on the economy:

As of 2020, UK private sector business population is made up of sole proprietorship by 3.5

million, trading company by 2 million and ordinary partnership by 414,000 (Business, n.d).
Small business has created 4 million more jobs in UK.
 Figure 8: Turnover and employment from small business in various sectors in UK (Riley, 2019)

It
contributes 47% of revenue to the UK economy (Market-inspector.co.uk, 2019).

Figure 9: Profit of small business in various sectors (Market-inspector.co.uk, 2019)

Small business positively contributes in more innovation inventions. Around 238,000 small
businesses are involved with foreign trade in some way (Clawson, 2019).

c. Differences between Small, medium and large business:

Small Business Medium Business Large Business
Mostly privately held and Equity is mostly held by public
Equity is generally held and
managed by owner and investors and professionally
managed by founder
professionals managed
Employees are less than 50 Employees are less than 250 Employees are over 250
(Sangoma, 2016) (Sangoma, 2016) (Sangoma, 2016)
Annual revenue under 10 million Annual revenue under 50 million Annual revenue of over 50
Euros (The Company Euros (The Company million Euros (The Company
Warehouse, 2015). Warehouse, 2015). Warehouse, 2015).
In UK there are 2111,295 small In UK there are 35,585 medium In UK there are 7,685 large
businesses that employ 4,117,000 businesses that employ 3,473,000 businesses that employ
people and contribute 629,163 people and contribute 639,322 10,868,000 people and contribute
million in GDP (Merchant million in GDP (Merchant 1,981,986 million in GDP
Savvy, n.d.). Savvy, n.d.). (Merchant Savvy, n.d.).
Considering both formal and
There are approximately 35-45 Large companies still hold
informal sector SMEs comprise
million non- agricultural SMEs biggest share in the global
of 400-500 million (Worldbank,
globally (Worldbank, n.d) market.
n.d)

Table 2: Differences between Small, medium and large business

Figure 10: Shares of various enterprises in UK (Market-inspector.co.uk, 2019)

Figure 11: SME and Large business share around the world (OECD, 2015)
 d. Importance of small business and start-ups in social economy
Social Economy: Social Economy traditionally refers to a set of association, cooperativeness,
and mutual understanding for values of solidarity, placing importance to people over money and
ensuring participatory governance (Oecd.org, 2018).

Importance of small business and start-ups in social economy:

Supporting the creation and growth of SMEs and startups are essential for the economy of the
country and its progress towards innovation. SMEs constitute of almost half (47%) of UK’s
turnover with an annual revenue of 1.8 trillion Euros (Market-inspector.co.uk, 2019). Small
business employs for about 60% of all private sector employment, by providing jobs to 16.3
million people (bionic.co.uk, n.d). The maximum small business owners are in personal services
as such beauty and wellness, financial consultation, and technological support services.

Conclusion
Small businesses are the backbone of UK economy as they drive growth, bring new market
opportunity and contribute in creating many jobs. However in a recent research 63% small
business owners admitted that they faced difficulties while conducting business in UK (Small
Business, 2018). Government’s financial support is crucial for these business enterprises. They
can cooperate with banks and financial institution to ease lending process and requirements
process of applying for startup loans and grants.

Section 2: Understanding Entrepreneurs

Introduction
Successful entrepreneurs are dedicated towards their work and accomplish each task with full
devotion. They have the ability to make others listen to him and communicate their ideas to
everyone. Entrepreneurs are not born with entrepreneurial skills and personalities rather they
learn from their mistakes and work accordingly (Shefsky, 2007). In this section of the report we
will be analyzing the common traits of famous entrepreneurs from different locations, find out
their motivational and structural factor, and factors to success. Finally we will analyze whether
family background, education or experience have any affect for their success.
 a. Successful entrepreneurs:
A local entrepreneur: Philip Green is an amazing entrepreneur with outstanding journey whose
current net worth is $5.8billion (Headspace, 2019). He is in the retail business as CEO of the
Arcadia group which includes major brands like Miss Selfridge, Topshop, Topman, Evans,
Wallis, Burton and Dorothy Perkins.

He started his journey by taking 20,000 Euros as loan to import designer jeans and sell them at a
discounted price. Later he saw the opportunity in buying few clothing stores that were running
out of business and sold the clothes at his own banner. He took the risk of buying British Home
Stores in 2000 and Arcadia in 2002 spending a whopping $1.2 billion. At present, his company’s
net worth is 930 million Euros and has 13,000 employees (the Guardian, 2020).

A global entrepreneur: Jeff Bezos, founder of Amazon, is the second richest man in the world
with a net worth of $84.3 billion (Entrepreneur Handbook, 2017). This always wasn’t the case
for him. He worked relentlessly to reach where he is now.

Jeff Bezos knack for innovation escalated with time to develop something new. His innovation
skill led him into creating an online portal to provide consumers what they want. He always
works out a through plan before investing in any growth plan. He is known to be a high risk taker
which steered him to be the owner of the company with net worth of $1.7 trillion (Palmer, 2020).

A social enterprise entrepreneur: Blake Mycoskie, founder of TOMS Shoes with a net worth
of $500 million (Celebrity Net Worth, 2010). Mission of TOMS Shoes is to use their profit
business for improving lives. Their business model is with every pair of shoes sold TOMS will
be providing a new pair to someone in need.

He saw problems faced by children of not being able to go to school due to lack of as basic need
as shoes. He decided to spend $300,000 of his own money in 2006 and at present is impacting
96.5 million lives (TOMS, n.d). He has now expanded his one-for-one model to support water,
sight, birth and anti-bullying initiatives.

b. Entrepreneurial success and impact of situational and motivational factors:

Entrepreneurial Success: analyzing the above mentioned entrepreneurs’ journey we can see
there are some common arguments for their success.
  Openness to any opportunity
 Willingness to take risk
 Effective problem solving skills
 Vision
 Willingness to adapt to any adverse situation.

Point of view of authors: Authors Alverez and Barney’s positive view towards
entrepreneurial success depends on degree of opportunity recognition of any entrepreneur.
They believe any individual that has the capability to assess future opportunity will be
successful (Alveraz & Barney, 2007)

On the contrary Angelica Valentine possesses a negative point of view of entrepreneurial

success. According to her entrepreneurs’ drive to being high achievers might result in
constantly striving towards a big, over the top goal that is rather challenging and stressful
(Valentine, 2014).

Situational and motivational factors: It was found in an study that the most important
reason for an entrepreneur choosing own business is that they want to increase their income
(Benzing, Chu, Kara, 2009). Other motivational factors are degree of freedom in work, job
security, greater business achievement and independence. Along with motivational factors it
was found that situational factor also played vital role in entrepreneurial success. The
availability of jobs, structure of SME loans and other formalities within the borders,
development stage of the country all situations work together in success of an entrepreneur
(Prokic, 2010).

c. Relation among entrepreneurial personality, motivations and mindset

Entrepreneurs typically have a positive mindset. They remain optimistic about future endeavors
and look forward to their success. Entrepreneurs are said to have a vision that they share with
everyone (Sjan, 2017). The team is well aware of their moves and goals. The main focus of
entrepreneurs is to control failure and achieve it business goal (Earnest, 2011).

Entrepreneur mindset refers to the specific set of mind that controls human activities towards
entrepreneurial conducts and outcomes. People having such mindset get attracted to
opportunities, creativity and innovation (Openstax.org, n.d). This helps entrepreneurs to build
confidence and take necessary risks.

An entrepreneurial mindset make easy to understand and manage skills and attitude and its
impact that it has on other people (Great British Entrepreneur Award, 2018). It is much simpler
process to set goals and milestones for self- improvement if it is backed up by entrepreneurial
skills and personality.

The ability to accommodate contrastive criticism positively can be developed by building

entrepreneurial mindset. It is always better to receive criticism and improve accordingly rather
than not receiving any kind of feedback at all (Woodward, 2020).

d. Influencing factor on the success of entrepreneurship:

A person’s background includes family, economic, education level and policies among. Personal
experience and background has the ability to affect the business greatly; either by fostering it or
by hindering it. This background may be support from family and friends, financial background,
work experience, and so on (Young, 2011).

Family members who are involved in entrepreneurial venture do have some influence on
individual’s intention decision making. Personality, motivational driver and skill of someone can
have a great positive influence on others. (Giones, 2016). For example, Roy Edward Disney was
highly benefited because of his family background. He had the best mentor to teach him tips and
tricks about managing business and already had an established business to operate (Richtopia,
n.d.). Similarly Zac William owner of the great touch organization had experience as an
instructor which helped to be a motivational speaker and consult students (Tracy, 2005).

On the other hand, family background, education level or experience might become the reason
for an entrepreneurs’ failure. For example, Henry Ford despite of coming from Ford family
failed miserably during his tenure of managing Ford Motor Co. This might be because of the
immense pressure of maintaining family reputation (Staff, 2020). Similarly Harland David
Sanders despite of having adequate experience failed in his entrepreneurial venture in the first
few years because of excess debts.
Conclusion
Entrepreneurs come up with innovative solutions to any problem. They spur economic growth,
add to national income, create social changes, and develop the community as a whole (Seth,
2020). They expand the market by introducing new products and services. They are play a vital
role in the economy by improving efficiency and introducing new technological inventions. In
order to be successful all entrepreneurs should have the ability to adapt, be persistence in their
wok and maintain strict work ethic.
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