Q Assignment on Understanding Entrepreneurship to manage, develop and organize a business enterprise to make a profit Home, - Understanding Entrepreneurship Understanding Entrepreneurship Introduction Entrepreneurship is the capacity to manage, develop and organize a business enterprise to make a profit. It involves risks, innovation, and opportunities with which the business enterprise can grow and act as a catalyst in the growth of the economy. With the emergence of the culture of entrepreneurship, there has been a rapid growth in the practices and policies in the entrepreneurial economy. This field helps to create wealth with the help of innovation (Burrows, 2015). An entrepreneur plays an important role in the business process. The entrepreneurs utilize their skills, new ideas along with the resources (land, labour, and capital) to create goods and services. Part 1 Brief Introduction to the report by examination of different types of Entrepreneurship and how they relate to different typology with entrepreneurship. It is accepted by most of the economists that entrepreneurship stimulates economic growth and creates job opportunities. This helps to reduce the poverty level and acts as a primary engine for income growth. The entrepreneurs should be encouraged by the government to come up with new ventures using their innovative business ideas. Entrepreneurship is also affected by the culture of the community. The community that considers the organizations with professional expertise may not encourage entrepreneurship, but if the community supports and accords high status to the individuals who are self-made, it would encourage the idea of entrepreneurship (Goffee and Scase, 2015). The entrepreneurs try to examine the market demand and supply carefully and they create those goods and provide services, which are not being supplied at present. These new ideas of entrepreneurs are gradually destroying the way in which the already established industries work. There are four types of entrepreneurial ventures as given below. 1) Small Business Entrepreneurship- Small business entrepreneurship is run solely by the entrepreneur. They tend to hire local employees and these types of enterprises are not very profitable. They do not aim to take over the industry and compete with other companies. Their aim is to earn a profit that is sufficient to run their own family. Small grocery stores, travel agents, storefronts, consultants, etc are the few examples of small business entrepreneurship. 2) Scalable startup entrepreneurship- This type of enterprise starts with the aim to bring a change in the current market scenario. They are not small businesses; they attract financial investors to invest in their enterprise and their business plan. Talented and efficient employees are hired so that they can do research on the scalable business and repeatable business model (Schaper, et al. 2014). 3) Large Company Entrepreneurship- These types of entrepreneurship requires innovation that would help the enterprises to have a finite life cycle. These types of companies try to offer products, which are made according to the taste of the customers with the help of new technology. The companies try to create new products and they attempt to create a disruptive product inside their companies. However, it is difficult for large companies and culture to execute disruptive innovation in their product line. 4) Social Entrepreneurship- In social entrepreneurship, all the entrepreneurs try to develop innovative ideas for the production of those goods and services, which can help the communities and solve the problems and needs of the people. The main objective of social entrepreneurship is to create a better place for the people so that they can survive. These kinds of enterprises may or may not be established for profit-making (Boswell, 2014). The different types of entrepreneurship can help a person to understand the link between a type and object of entrepreneurship. It can identify the competency level of each professional. Each type of entrepreneurship requires the entrepreneurs to make decisions based on their self-awareness and other criteria that would help the business progress. For the entrepreneurs, these decisions affect the future activities of the business and help them to figure out what steps they should take to achieve their goals. Typologies are useful in enhancing the performance, efficiency, and effectiveness of the employees of the organization. Proper tools should be used to manage the organization to survive in the competitive market (Bridge and O'Neill, 2012). Every type of entrepreneurship has their own objectives and the way they work, the way they execute their plans, the way they serve their customers if absolutely different from each other. The companies design their business strategy keeping in mind the main objective of serving the customers. Customers are the most important factor for all these enterprises. The only common objective of all these types of entrepreneurship is to provide goods and services to the customers. If the customers are satisfied and the companies succeed in fulfilling the needs of the customers, the companies are considered to be successful. Therefore, it can be said that no matter how many types of entrepreneurship are there, they have to use their unique ideas and business plan so that they can be different from each other. All these enterprises must properly plan on how to utilize and allocate their resources and put their innovative ideas to create unique products for the customers (Brush, 2012). Similarities and dissimilarities between types of entrepreneurial ventures. Roles, characteristic and objectives of different types of ventures The first similarity between all the types of entrepreneurial ventures is the financing part. Even if it is a social entrepreneurial venture, it needs capital and fund to run the enterprise. Without funding, it is impossible for a company to run. Every business has its own way to fund its operations and projects. The above-mentioned types of enterprises get their financing done by banks loans, a loan from small owners or family members and from the government. The large and scalable entrepreneurial ventures can get hold of big investors who can fund them (Carland and Carland, 2015, p.9). They can also raise money for their capital by selling bonds and share to the public. These two enterprises focus on earning a huge amount of profits and they both try to have a good hold in the industry. The difference between these two enterprises is that the scalable enterprise tries to compete with other companies in the same industry and aims at capturing the market by gaining profits, whereas the large companies are mostly well established and they aim at providing the customer's unique products and services. The small business enterprises are different from scalable and large enterprises as small business enterprises do not wish to compete with any other companies. Social business enterprises and small business enterprises are a bit similar, as sometimes even the social business enterprise does not aim at making a profit. Both the enterprises aim at serving the needs of the customers without thinking about the profit volume (Greene, et al. 2015, p.37). The private, public and social enterprises have different roles and objectives and they have their own characteristics. Private entrepreneurial ventures have the main objective of earning profits. The private enterprises focus on their line of products and try to create demand for them by studying the customer's needs. The private enterprises also contribute towards the economy by earning huge profits (Carland, et al. 2015, p.54). On the other hand, the public enterprises also aim at earning huge profits but at the same time, they feel their responsibilities towards the community. All the public companies try to maintain corporate social responsibility. The government bodies mostly fund the public enterprises and the social so the companies try to reinvest their profits in the community. All these enterprises are of different size in terms of operations. There are micro, small and medium-sized enterprises. A single person runs these kinds of the company solely and manages it in a personalized way. The owner takes active participation in all the deals. These small enterprises have a lesser gestation period than large enterprises. The scope of these industries is generally to cater to the demands of the local and regional customers (Jaskiewicz, et al. 2015, p.32). These enterprises require smaller capital investment than the large enterprises, but the micro-enterprises are highly reactive and change susceptible to the socioeconomic conditions than large enterprises. Impact of micro and small business on the economy The small and micro-businesses are the ones, which are operated independently, and other companies do not dominate the operations of these enterprises. These enterprises can be assessed by the size of their business. The entrepreneurs who believe in taking a risk and utilizing their innovative ideas to establish a new business of small-scale operations are said to be entrepreneurs of small business. The small business has impacted the economy in recent years. In the UK, these enterprises have become the backbone of the economy and have driven economic growth. It has helped in creating job opportunities and has significantly contributed to economic growth. The small enterprises give opportunities to those workers who do not have any prior work experience (Dale, 2015, p.35). They provide them with on-the-job training and make them eligible to work for their company. This helps to cut down the unemployment rate in the economy. These type of organizations have a less complex structure as the owners are directly involved in most of the practices. These firms ensure the productivity of the workers by giving them guidance and proper training throughout their tenure of work. The entrepreneurs of small enterprises encourage completion and try to sustain in the industry with their fresh ideas. The idea of small entrepreneurial ventures has been thriving in the UK from the last few years. 99% of the businesses in the UK are small and medium sized businesses. These firms have benefitted the overall economy of the UK. It has been reported that these firms believe in innovative activities and competitive growth. At least 38% of the small and medium-sized enterprises have tried to come up with new products and services (Fayolle and Gailly, 2015, p.92). The number of SMEs in the UK has increased by 47% from the year 2009 to 2013. SMEs are the main reason behind pulling the UK out of the recession. These enterprises also generated a £1.67 trillion in the year 2014 and around 24 million people were employed by these enterprises. Hence, it can be said that SMEs play a vital role in the economy and has the potential to change the condition of any economy. Importance of small business start-ups on the growth of the social economy The small business entrepreneurship has a significant role to play in the growth of the social economy. It brings innovation and job opportunity to the community, which helps to stimulate the growth rate of the economy. These firms give job opportunities to those people who might not get into large enterprises. This way, the young talented people get attracted to working with these companies. In recent year, the small business corporations have been performing various business functions (Bruton, et al. 2015, p.25) The large corporations have started outsourcing various kind of work to these small-sized enterprises. The small enterprises are customer-oriented and so they have many numbers of loyal customers, which at times, helps the enterprise to stay afloat during the recession. This helps to strengthen the local economies. As these small ventures are very adaptive to the economic changes, these enterprises do not lose much during the economic crisis and tend to respond positively. When these small-sized enterprises start earning huge profits, it means the amount of tax paid by them would also increase which would include local taxes (Henrekson and Sanandaji, 2014, p.1762). These local taxes paid by them can help the government to utilize for the local community and make a better place for the people to live. It is a fact that any large corporation, which is running at present, started off as a small-sized business like Nike, Microsoft and Ben and Jerry's. Now, these companies rule in both the national and international markets. These companies have remained in the community where their business got established for the time. The main objective is to help the community and provide them with employment to thrive in the local economy. Hence, small business enterprises and business start-ups have a very important role in the growth of the social economy (Lofstrom, et al. 2015, p.250). Part 2 Characteristics of a successful entrepreneur, their skills and examples of successful entrepreneurs and exploring whether entrepreneurs are born or made and whether their skills can be learned over time. The people who have the desire and passion for working for themselves are known as entrepreneurs. For starting any business, the entrepreneurs need to have a definite vision and they must be dedicated to achieving that in future. All the successful entrepreneurs at present have different educational qualification and experience, but the common thing between all of them was the passion and motivation that helped them to achieve what they had desired while starting the business (Saraswathy, et al. 2013, p.423). Apple's founder Steve Jobs, Microsoft's founder Bill Gates, Virgin Group's founder Richard Branson, Dell Computers' founder Michael S. Dell, Facebook's founder Mark Zuckerberg, Huffington Post's founder Arianna Huffington, Co-founder of Inditex Rosalia Mera are the most known and powerful entrepreneurs in the world who are very talented and are enthusiastic towards their work. All of them have different skills to handle their businesses. Every entrepreneur must have leadership skills and innovative ideas to run the business. All these above-mentioned entrepreneurs are self-motivated and have the courage to take the risk to operate the business. An entrepreneur has to stay self-motivated as in the initial stage of the business they do not get any financial reward, they need t to have the patience to take up challenges and take necessary steps to move forward with their business plan (Acs, et al. 2012, p.756). Having strong leadership skills is equally important, as an entrepreneur has to lead a team, which may have only two people or a thousand people. Entrepreneurs have to motivate his or her team members to work towards a common goal. They have to understand that there are different types of employees, customers and investors they have to deal with, so strong communication skills can help them deal with different kinds of people. The most important skill of entrepreneurs is risk-taking. In order to succeed and move forward, entrepreneurs have to take risks and they should be always ready to face failure as well. Their plan should be flexible and they should be able to take prompt decisions when things do not according to their plan. A good entrepreneur would always come up with innovative ideas and develop them to improve their products and services. They should also have integrity and a sense of basic ethics for running the business. All these mentioned characteristics of an entrepreneur are important (Martin, et al. 2013, p. 220). Entrepreneurs are not born with skills. Many people have no strong background and high qualifications like Steve Jobs, Bills Gates, but they still managed to build up companies worth trillions. All the famous entrepreneurs are naturally made and they acquire skills through training, practice, and experience of their business. Good entrepreneurs have the skills, which can help them to face challenges and find opportunities to overcome these challenges (Marlow and McAdam, 2013, p.120). The knowledge and ideas of the entrepreneurs help them to fight through their business crisis and work towards the development of their business. The entrepreneurs gradually gain knowledge about several things like getting funds from different sources, allocation of resources, working according to the government regulations and managing the employees of their enterprise (Carlsson, et al. 2013, p.927). To operate the business successfully, good communication skills are required, which can be gained from meeting new people, business leaders and dealing with them frequently. Only physical strength and posterior can be inherited, not leadership skills. A person has to learn through proper training and experience and then practice it on a daily basis in the business field. The entrepreneurs must make the effort to temper the qualities and have integrity, passion, and dedication to work. One must be able to acquire qualities during the training and understand the fact that these qualities are not inherited, they have to work hard to have these qualities in them to become an entrepreneur (McKenzie and Woodruff, 2012, p.876). The aspects of entrepreneurial personality reflect entrepreneurial motivation and mindset and the personality of entrepreneurs shaped by family upbringing, cultural difference, and personal motivation Entrepreneurial mindset means the behaviour or thinking that orientates a person towards the activities of the business and its outcomes. An entrepreneur is drawn to innovation, prospects and value creation because of their entrepreneurial mindset. The different entrepreneurial aspects of being innovative, self-motivated, organized, resilient, patience, confident to take risks, etc. have an impact on the mindset of the entrepreneurs. These traits are developed through continuous practice and training. The entrepreneurs learn a lot while dealing with different work (Blackburn, et al. 2013, p.23). They have to keep a positive attitude toward their work and have a good presence of mind so that they can think freely during any critical situation. Another most important mindset is the ability to work with others. An entrepreneur is also a leader who leads a team that has a certain number of people. Each of the team members are different from each other, have different backgrounds and they might not work the same way as their leader. Entrepreneurs have to understand the behaviour of all the employees and be patient with them; they have to keep the member coordinated to keep the structure of the organization intact and work towards the common goal (Fini, et al. 2012, p.402). As the entrepreneurs are self-motivated, they should motivate their team members to work harder, come up with their new ideas and suggest a different procedure work. This way the entire organization would collaborate. The personality and motivational traits of the entrepreneurs are important to understand the entrepreneur's mindset. An entrepreneur is always motivated and has clear visions, so he or she does not consider making profits as their prime motivational factor. Their main motive is to create new ideas, which is always different in nature. Hence, the different aspects of the entrepreneurial personality have a huge impact on the mindset and motivation factor of all the entrepreneurs (Sciascia, et al. 2012, p.28). Every entrepreneur comes from a different background and culture. Each of them is brought up in a different way and have followed different approaches to achieve something in life. The society and its culture play a very important role in shaping the personality of a person. A person draws his own values from the values of the society in which he or she lives in. The culture of the society has a huge impact on the behaviour and attitude of a person. Whether a person would develop the traits of an entrepreneur and become one in future depends on the value orientation and his or her disposition. The individuals live in a socio-cultural system that provides them with a set of values from which they develop their thinking pattern and personal values (Acs, et al. 2012, p.746). These values influence the decision-making process of the individuals towards entrepreneurship either in a positive manner or in a negative manner. Moreover, the family of an individual develops his or her characteristics. The values and atmosphere of the entrepreneur's family nurture and supports the development of the entrepreneur's personality and character. The family upbringing has a strong influence on the characters and values an entrepreneur holds. If the individual's family is open minded and has the habit of motivating each other, it can be predicted that the individual would have positive values and would always stay motivated to work. The social groups of an individual also influence his or her traits and behaviour. An individual, who wishes to become an entrepreneur, must choose social groups carefully and avoid negative environment, instead, he or she should surround themselves with those people who believe in them. Therefore, the personality of entrepreneurs is shaped by family upbringing, cultural difference and personal motivation (Audretsch, 2012, p. 756). The background and past experience of a person can hinder or foster entrepreneurship and the Risks and rewards of starting a business The skills and experience of an entrepreneur affect the susceptibility of an individual who would like to become an entrepreneur. The entrepreneur gains experience while getting training or working regularly with different projects. Therese skills and experience always have a positive impact on entrepreneurs. These help them to become innovative, motivated, and resilient and have the ability to take face challenges and face risks for any work. For any strategy or in the case of making a huge decision for the business, the entrepreneurs have to trust their skills and take decisions based on their past experience. If an individual does not experiment with new ideas or fears to face challenges and does not prefer taking risks, then he or she will never have any experience in case of entrepreneurship skills. It is very important for entrepreneurs to go through every phase of their training and take an active part in all the business deals so that they have an idea to develop strategies and motivate others to work for the success of the enterprise. Management skills are also very important. If an entrepreneur fails to manage the team, it would hinder the growth of the enterprise and the development of innovation. Those individuals, who have been exposed to different situations and have managed to overcome several problems, would develop the quality of leadership and risk-taking. On the other hand, those who have would not prefer taking any risk. The upbringing and past experience of every individual have an impact on his or her personality and the lifestyle. It can either hinder or foster their wish to become an entrepreneur (Marlow and McAdam, 2013, p.120). Every business involves risks but it also involves rewards if the business enterprise successfully overcomes the challenges. Starting a business is not an easy task. One has to have the quality and patience to begin something this challenging. The person has to have the ability to take the risk to become an entrepreneur. There are many risks involved in starting a new business. Before starting any new business, the entrepreneurs have to understand that there would be no guarantee of their personal income for months or even few years, as the company has to secure the line of income for future business activities. The entrepreneurs have to fund their business from loans, investor's contribution or grants. The risk in case of loans is the repayment amount. In case the business fails, the entrepreneurs would face difficulties in repaying it. There are also certain rewards for starting a new business. The entrepreneurs get to learn a lot over these years of implementing their plans and ideas. Once they have settled in with their strategies, it becomes easy for them to reach out to the customers and serve their needs. They gain a lot of exposure as they get to meet new people during this entire process. It enhances their personality and helps them to gain the confidence to work further (Henrekson and Sanandaji, 2014, p.1762). Conclusion It can be concluded that entrepreneurship is appropriate for those people who are very innovative, who like to take risks and who have the traits of being a good leader. In recent years, it has been observed that there has been the emergence of unique business companies with different business plan and structure. The entrepreneurs try to come with new ideas to provide the community with unique products and services according to their demand. The entrepreneurs have certain qualities, which are not inherited; they are developed through training and practice of business activities. These aspects reflect on the mindset of the entrepreneurs. The government and even the banks try to fund new entrepreneurial enterprises to encourage them to create new and different products. If one has these qualities, then he or she should be motivated to become an entrepreneur.