Name: Saad Khalid

HND Unit:9
Entrepreneurship and Small Business Management
Definition and Typology of Entrepreneurship
Entrepreneurship
Entrepreneurship is a type of activity that involves generating job chances for people, as well as an
entrepreneur who, after innovating and implementing his ideas, helps in the transformation of the
world and economy.

Entrepreneurship is the activity of becoming a businessperson, or "CEO of a business enterprise"

who actively seeks to create opportunities and profit through his ideas. Entrepreneurs serve as
directors and oversee the growth of a business. Entrepreneurship is the procedure by which either
an individual or a group distinguishes a business opportunity and obtains benefits.

Types of Entrepreneurship

There are four types of entrepreneurship

Small business entrepreneurship

A hairdresser, a grocery store, a travel agent, a consultant, a carpenter, a plumber, and an

electrician are examples of these enterprises. These entrepreneurs run or own their own business
and employ family members or local workers. For them, the earnings would be enough to feed their
family rather than a $100 million business or an industry . They raise funds for their business by
taking out small business loans or borrowing from friends and relatives.

Scalable startup entrepreneurship

These entrepreneur sets out to build a business with the belief that their vision has the potential to
change the world. They attract investors who think outside the box and promote others who do so.
They hire the smartest and brightest individuals since the research focuses on a scalable business
and experimental models. They need more venture cash to fund and support their project or
company.

Large company entrepreneurship

These big businesses have a well-defined life-cycle. The majority of these businesses grow and
expand by introducing new and creative products that revolve around their main products. Changes
in technology, customer tastes, new competition, and other factors put pressure on huge
corporations to develop new products and sell them to a new set of customers in a new market.

Social entrepreneurship
 This sort of business focuses on creating products and services that address social problems and
needs. Their only goal and objective is to work for the good of society rather than making any
profits.

The Importance of entrepreneurship in economy and society

Helps in development:

Entrepreneurs have the ability to change the way we live and work. If their businesses are successful,
they may improve our way of life by creating jobs and creating the conditions for a prosperous society,
in terms of gaining money.

Jobs and opportunities:

Jobs and opportunities are important for a person's financial well-being, because they would not exist
without entrepreneurs. They made profit by providing people with opportunity. As a firm grows, new
vacancies and opportunities are generated, which benefits a large number of families and therefore
lowers the country's unemployment rate.

Definition of Entrepreneurship , Entrepreneurial Activity and Enterprise

Entrepreneurship

Entrepreneurship is a type of activity that involves generating job chances for people, as well as an
entrepreneur who, after innovating and implementing his ideas, helps in the transformation of the
world and economy.Entrepreneurship is the activity of becoming a businessperson, or "CEO of a
business enterprise" who actively seeks to create opportunities and profit through his ideas.

Entrepreneurial activity

When a businessman works in the activity of creating opportunities and jobs, this is known as
entrepreneurial activity. In this activity, the businessman is always innovating new ideas and
creating new things. The entrepreneur remembers that the product must meet the demands and
needs of the customers.

Enterprise

An enterprise is a small business or one that is expected to grow in the future is known as
Enterprise. For-profit business is another term for enterprise. There are two types of enterprises
i.e sole proprietorship and partnership.

Ref (https://byjus.com/commerce/what-is-entrepreneurship/ )
Serial Entrepreneurs, Intrapreneurs and Owner managers
Serial Entrepreneurs:

Serial entrepreneurs are people who have a strong desire to try something new and big in the future.
When one of their businesses succeeds, they transfer ownership to someone who deserves it, and then
they move on to new ideas and business ventures. Starting a business should not be difficult for
someone who is determined and has unique ideas. Many people are afraid of taking risks, which makes
them step back.

Advantages of serial entrepreneurs

1. They are well experienced and trained to run businesses. They always come up with innovations
which benefits people.

2. Because they’re experienced, it is easy to them to perform well everytime and raise funds easily.

Intrapreneurs:

An Intrapreneur is a businessman working for a large company who uses entrepreneurial talents to
avoid the company's unexpected risks and hazards. Intrapreneurs are employees of a corporation who
handle projects and are in responsible of developing programmes like entrepreneurs. Intrapreneurs
have a more broad thinking and outlook. Internal entrepreneurs are more likely to have better talents
for specific jobs and take more chances in their work environment because they are committed to
solving greater problems in the business.

Owner Managers:

A person who owns and runs a business is known as an owner manager. Basically, the owner manager is
self-employed. He is a professional who understands how to run a firm more efficiently, and if the
business succeeds, he is rewarded with bonuses. The owner managers are responsible for a variety of
activities and responsibilities. It is their responsibility to build positive relationships with their staff in
order to keep them motivated at work. Their job also means making it successful and productive, which
is the most common goal of any businessman.

Growth Firms:

Any firm that generates significant positive cash flows or earnings ,that grow at a faster rate than the
overall economy is considered a growth company. For its own retained earnings, a growing company
usually has a lot of profitable reinvestment options.

Public Sector:

The public sector of an economy is the sector that provides a range of governmental services, including
infrastructure, public transportation, public education, health care, police and military services.
Ref (https://www.privacysense.net/terms/public-sector/ )

Definition and Examples of Social Enterprise

Social Enterprise

A social enterprise is a firm that is primarily concerned with selling goods and services in a market, but
whose primary goal is to achieve a specific social goal. It is usually enrolled as a non-benefit or for-
benefit programme. In this case, benefits are mostly used to support social projects. Activists formed
social groups to help in the support of a specific reason , just as businesses do when they need to
offer back a portion of their profits to the network.

For instance, wellness indicate will be assembled generate some income however its basic role is a sure
social target which is to advance strength

Example

1. Social supermarket
2. Social crowd funding
3. Socially Conscious Consumer Electronics

Ref (https://www.thesedge.org/socent-spotlights/22-awesome-social-enterprise-business-ideas )

Similarities and difference between Entrepreneurial Ventures

Similarities:

The most obvious similarity across the businesses is that they all aim to create value. By definition, it
is at the heart of entrepreneurship. The hairdresser at the corner adds value by cutting hair, eBay
adds value by creating an online marketplace for used items, young scientists provide value by
researching cures or medicines, and banks adds value  by making microfinance accessible.
Entrepreneurship is nothing without this value-delivery idea.

Another resemblance is that they all involve some form of innovation (except small business
entrepreneurship). A business must think beyond the box in order to give value in new ways. These
businesses must be built around unique ideas, or else the opportunities to give value will be limited.
For example, before eBay, no one could sell their goods unless they knew a large number of people,
each of whom was interested in the goods. Anyone may now post an ad on the internet beccause
of eBay's.

Differences:
 It is obvious that different types of ventures have more differences than similarities. Social ventures,
for example, are not in the business for making money. Unlike other types of businesses that create
value simply to make a profit, social entrepreneurs create value in order to improve the world.
Another difference is the amount of capital (or seed money) required. Small firms don't need a lot of
money to get started. However, scalable businesses demand a lot of money from venture capitalists.

The ventures are also supported by a variety of sources. Small business owners can utilise their own
money or borrow from relatives or friends to establish their businesses. Large institutional investors
and venture capitalists are needed in greater numbers for scalable business projects. Large-scale
entrepreneurship, as the name implies, is sponsored by the corporation itself.

Ref
(https://www.researchgate.net/publication/308090224_Distinguishing_Types_of_Entrepreneurial_
Ventures_An_Identity-Based_Perspective_JOURNAL_OF_SMALL_BUSINESS_MANAGEMENT )

Impact of Small Businesses on the Economy

Micro and Small Businesses

Micro Businesses:

A micro business is also known as a micro enterprise. It is a small company with a few workforce. A
micro business employs fewer than ten people and is founded with a tiny amount of money borrowed
from a bank or other source. The majority of micro businesses focus on supplying goods or services to
their local communities.

Small Businesses:

Small businesses are privately owned firms with fewer than ten employees and a small revenue, such as
a bakery with seven employees. Small firms are eligible for advantageous tax regulations, which vary by
country and industry. Small businesses can be classified in a variety of ways, including sales, assets, net
profit, annual revenue, and the number of employees. There are four sorts of small firms appeared in
the table below:
 Types of Firms Number of Firms Description

High-Growth 300000 Innovation-driven, fast growing

businesses

Suppliers 1.5 Million Suppliers to other businesses

(B2B)

Main street 5 Million Local businesses serving

consumers

Non- employee businesses 25 million Sole proprietorship

Ref (https://www.investopedia.com/terms/s/smallandmidsizeenterprises.asp )

Impact of Small Businesses on the economy

Economic Contribution:

Privately owned businesses are responsible for 99.7% of all commercial transactions. Since 1995, private
entrepreneurs have created 64% of the impressive number of professions in the United States. My
business makes a significant contribution to the economy by providing a new market and creating job
opportunities for individuals.

Contribution at local level:

The growth of a free organiaztion is the growth of the organization in which it is produced. Autonomous
organizations promote economic growth by providing opportunities for people to work. Private
initiatives are used by broad associations for the culmination of various business limitations, so
autonomous organizations might benefit generous associations within a similar local organization.

Contribution at regional level:

With numerous assets, fantastic passageways, and a well-functioning innovation framework, the private
venture influence will be assured in extraordinarily successful regions. They have a negative impact in
low-earning areas.

Contribution at national level:

Our nation's stability is predicated on a stable economy, and budgetary quality is determined by private
companies. Both the government and the subjects can use independent companies to buy the items and
services they really have to develop. In the meantime, people are free to act on their brilliant ideas and
turn them into reality. As a result, this demonstration boosts national economies and encourages others
to start their own businesses.
Growth:

A privately owned business can transfer development to any field. They have a more direct channel with
a larger network. They are logically open to trying new ideas and thinking beyond the boundaries. It
contributes to the organization's development and growth. Economic growth is boosted in a similar way
by small businesses that provide job opportunities to the unemployed.

Adaptability:

The majority of privately owned businesses are capable of dealing with and adapting to changing
economic environment. Small businesses are frequently very consumer oriented. During an economic
crisis, customers are immovable. Because of their determination, small businesses may survive in the
face of adversity, which helps to strengthen economies.

Ref (https://www.thebalancesmb.com/small-business-impact-on-the-economy-4175064

https://www.thebalancesmb.com/small-business-impact-on-the-economy-4175064 )

Importance of small business on the social economy

Small businesses are vital to a country's economic and social growth. It plays an important role in the
global economy by contributing significantly to GDP and raising the standard of living of the general
public. In general, advanced countries have 90% of SMEs, which is one of the major reasons for financial
progress. Through the export of home goods to many countries, the modern component of SMEs has
become an integral part of the global economy.

Despite the well-documented impact of entrepreneurship on employment and GDP, little is known
about its social economy impact. Three recent research discovered empirical evidence that
entrepreneurship has a positive impact on social welfare. Rupasingha discovered that self-employment
reduces poverty in rural and urban US counties in the short term, Atems discovered that self-
employment reduces income inequality in US states in the medium term, and Dhahri and Omri
discovered new firm formations to increase the national modified Human Development Index (MHDI) in
developing countries in the long term.

Ref (https://link.springer.com/article/10.1007/s11301-020-00193-7 )

Small, Medium and Large Businesses:

Small Businesses:

New start ups and sole proprietorships will be considered as small business. Small businesses are the
backbone of a country's economy. These small businesses create jobs, increase money circulation, and
contribute to GDP. It is relatively simple to enter these small businesses because the entry barriers are
much lower than in other types of ventures. Every other general store or mart in Pakistan, as well as
small cafés and restaurants, are great examples of small businesses. Small businesses have the
advantages of being able to keep all of the profit earnings alone, being your own boss, and not needing
permission for vacations or other things. The disadvantage of these businesses is that they are difficult
to fund and lack the resources to expand. The owner is responsible of loss alone.

Medium Businesses:

Businesses that are slightly larger than small businesses are known as medium size businesses. Because
medium ventures have one or more owners, they may raise capital faster than small ventures and have
greater resources. This category includes partnerships, joint ventures, and limited partnerships. Shaheen
Chemist, D-Watson Chemist, Savour Foods, Howdy, and Tehzeeb Bakery are examples of medium-sized
businesses in Pakistan. They have multiple brancches in various cities, some of which are
company operated or the franchises. All of these outlets have managers who report to the central office,
which is in charge of all of them. The disadvantage of medium-sized businesses is that partners may
clash, profits must be split, and it is difficult to keep investors if the business is going in loss.

Large Businesses:

The final step of a venture is a large sized businesses. These companies have no trouble raising capital
and have a large amount of available resources. They have a larger number of shareholders and employ
a greater number of people than small and medium businesses. Social work is also done by the
companies in these businesses. Entrepreneurs and intrapreneurs make up a large portion of the group.
They have a big influence on the stock market, and they can turn it bullish or bearish. This category
includes private limited companies, public limited companies, corporations, and LLCs. In comparison to
the other two types of businesses, the disadvantage of these large businesses is that the true owner has
far less control.

Ref (https://gocardless.com/guides/posts/small-business-vs-large-business/ )

Entrepreneurs Compared to Business Managers:

Entrepreneurs:

An entrepreneur is a visionary, a maker, a trend-setter, a leader, a risk-taker, and a pioneer. He is

effectively engaged with exploiting openings in order to find change. He also recognises risk as a part of
the journey to becoming an entrepreneur. Similarly, he is motivated by autonomy and the opportunity
to make a monetary gain or loss. Mudassir Sheikh is a businessman who founded Careem with two
partners. Careem is a global transportation company that was founded in 2012 in Dubai. The country
works in over 16 countries, 120 or more cities, and has over 25 million clients and 1000 thousand
commanders all over the world.

Serial Entrepreneurs:
Serial entrepreneurs are those who have a strong desire to try something new and significant in the
future. When one of their business succeeds, they pass over control to someone who deserves it, and
then they move on to new ideas and business initiatives.

Social Entrepreneurs:

This is a person that looks for innovative solutions to social problems. A social entrepreneur adopts a
style that allows him or her to create and maintain social values. The majority of social entrepreneurs
engage in non-benefit activities and are overwhelmed by their social responsibilities and soul.

Manager:

The owner/trough is the key driver behind most independent businesses, and as such, can be the
impetus for business change that occurs through or around IT. In some small businesses, the owner's
and manager's offices are separated. An individual who creates and manages a project with the primary
goal of furthering his or her own objectives. The venture is the most important source of revenue and
consumes the majority of the owner/time manager's and resources. She/he exercises critical authority
in his/her firm's day-to-day Tasks.

Characteristics
Entrepreneurs:

1. Venture

An entrepreneur sets up another endeavor or embraces a venture for his own delight.

2. Risk Bearing

An entrepreneur takes the risk of financial fragility while starting on a project.

3. Reward

The reward of an entrepreneur for his risk bearing job is benefits. It isn't just dubious and sporadic
yet can now and again be negative too.

4. Developnment

The entrepreneur uses advancement in the project on a regular basis in order to expand the rewards. An
entrepreneur is sometimes known as a transformation specialist.

Managers:

1. Venture

A manager doesn't take another venture and delivers administrations in a current endeavor
2. Risk Bearing

A manager does not assume or share any risk associated with the project for which he is
responsible.

3. Coherence

Managerial exercises are fundamentally consistent including an on-going coordination of business

tasks.

4. Developnment

Actually, on a standard premise, a manager basically keeps running the effort on successfully settled
lines. As a result, a manager is said to be the product of the entrepreneur's success.

5. Reward

The reward of a manager for delivering his administrations is compensation which not at all like
benefits is fixed and standard and can never be negative.

Ref (https://www.toppr.com/guides/business-management-and-entrepreneurship/introduction-to-
entrepreneurship/entrepreneurs-vs-managers/ )

Entrepreneurial Mindset , Personality and Motivation

Entrepreneurial Mindset:

Entrepreneurs promote economic growth progress, job creation, and the invention of products and
services that improve the world. To be a great entrepreneur, you must think beyond the box and
come up with larger-than-life ideas. Anyone can come up with a fresh idea, but the entrepreneurial
challenge is to turn it into a profitable firm. To succeed, an entrepreneur must be innovative,
communicative, and highly motivated.

Following are the some mindsets that entrepreneur should have:

1. Positive mental attitude

2. A creative mindset
3. Good communication skills
4. Ability to learn from failure
5. Flexibility

Ref (https://investsouthwest.org/7-characteristics-of-an-entrepreneurial-mindset%E2%80%8A-
%E2%80%8Aand-how-to-develop-them/ )

Entrepreneurial Motivation:
 In small businesses, self-motivated managers are those who are involved in the work despite the
absence of higher-level oversight. Their inspiration originates from within, and they are usually the
ones in charge. Backgrounds, values, educations, and personalities all have an impact on self-
motivated managers. They frequently share certain characteristics, and their approach to
completing tasks differs from that people who are less self-directed. Self-motivated managers are
usually positive and friendly with strong communication skills. According to Mind Tools, self-
motivated managers trust in themselves and convey that confidence and passion to their staff.
These people are also vibrant and humble.

There are some motivations that entrepreneur should have:

1. Leadership Skills
2. Risk taking and decision making
3. Innovative and always looking ways to improve

Ref (https://smallbusiness.chron.com/good-characteristics-entrepreneur-18385.html )

Entrepreneurial Personality:

There are lots of types that might influence an entrepreneur's success as they create, operate, and
develop their business. The timing of their business start, the competitiveness of their market, the
reliability of their supply chain, the quantity of capital they can access, and the present economic
situation are all examples of these factors.

There are some personalities that entrepreneur should have:

1. Discipline
2. Creativity
3. Self awareness
4. Empathetic

Ref (https://blog.hubspot.com/sales/entrepreneur-personality-traits )