Developing Entrepreneurial Skills Assignment

Introduction of Developing Entrepreneurial skills (Part - A Presentation)

The FSB or Federation of Small Business is an organisation to provide assistance to small businesses and entrepreneurs to answer any of their queries and guide them to attain their goals. 

Among these small businesses and scalable start-ups are discussed here as they have less revenue and are started newly.

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Different Types of Entrepreneurial Ventures

There are different types of entrepreneurial ventures, namely, small businesses, scalable start-ups, large companies and social entrepreneurship. 

Advantages of Entrepreneurial Ventures

Small Businesses

Small businesses are much more independent compared to businesses of large structures (Baker and Judge, 2020). They have the freedom to actively participate in projects they are interested in and have control over the business. 

They also have the opportunity to make more money (Cantele and Zardini, 2018). 

They also obtain more satisfaction as the things are done in the way they want and this helps them feel more connected to the business (Ritz, Wolf and McQuitty, 2019).

Small business owners also enjoy more tax benefits as compared to large companies as the tax breaks are more for self-employment (Kalogiannidis, 2020).

Scalable Start-ups

It is indicated by Gonçalves et al. (2022) that scalable start-ups are smaller and thus have fewer workforces which helps the business become agile and improve its business model.

In large companies, the employees go for large bonuses and salary packages, but in start-ups, the team culture is much stronger as they are attracted by the idea and potentiality of growth (Hwang and Shin, 2019).

Start-ups enjoy more flexibility as compared to large companies as they can control the business more personally (Bistline, 2018).

Disadvantages of Entrepreneurial Ventures

Small Businesses

Small businesses are much riskier than being employed (Cortés et al, 2020).

Small businesses are much more uncertain than being employed (Kim, Kim and Wang, 2021). The owners are relatively new and do not possess much experience and this can cause the business to falter at certain steps.

The business owner is also required to put in more work hours which can lead to frustration for the owner (Bartlett III and Morse, 2020).

Scalable Start-ups

As indicated by Sreenivasan and Suresh (2021), start-ups have more risk as the owners contain less experience in dealing with risks.

It is indicated by Sorenson et al. (2021) that start-up businesses have lesser compensation and it can affect the business morally. 

It is indicated by Cockayne (2019) that start-up business owners are more prone to develop stress over work. 

Scope, Development and Growth 

Businesses contribute greatly to the development of a country as they provide employment and cover a vast range of activities from manufacturing to retailing (Khan, Çera and Nétek, 2019). 

Small-scale businesses contribute greatly to developing the nation as it develops the socio-economic scenario of a country by providing employment to many people and increasing the GDP of the nation as it is shown in the study provided by Chege and Wang (2020). 

It also contributes to the corporate sector as the businesses have the potential to grow and provide competition to large-scale businesses motivating them to improve further.

Conclusion

Small-scale businesses contribute greatly to the nation and in spite of the distinguished disadvantages are significant as the advantages far outweigh the disadvantages.

The disadvantages can also be mitigated with the help of assistance from a professional. 

References

Baker, T.H. and Judge, K., (2020). How to help small businesses survive COVID-19. Columbia Law and Economics Working Paper, (620).

Bartlett III, R.P. and Morse, A., (2020). Small business survival capabilities and policy effectiveness: Evidence from oakland (No. w27629). National Bureau of Economic Research.

Bistline, J.E., (2018). Turn down for what? The economic value of operational flexibility in electricity markets. IEEE Transactions on Power Systems, 34(1), pp.527-534.

Cantele, S. and Zardini, A., (2018). Is sustainability a competitive advantage for small businesses? An empirical analysis of possible mediators in the sustainability–financial performance relationship. Journal of cleaner production, 182, pp.166-176.

Chege, S.M. and Wang, D., (2020). Information technology innovation and its impact on job creation by SMEs in developing countries: an analysis of the literature review. Technology Analysis & Strategic Management, 32(3), pp.256-271.

Cockayne, D., (2019). What is a startup firm? A methodological and epistemological investigation into research objects in economic geography. Geoforum, 107, pp.77-87.

Cortés, K.R., Demyanyk, Y., Li, L., Loutskina, E. and Strahan, P.E., (2020). Stress tests and small business lending. Journal of Financial Economics, 136(1), pp.260-279.

Gonçalves, D., Bergquist, M., Alänge, S. and Bunk, R., (2022). How digital tools align with organizational agility and strengthen digital innovation in automotive startups. Procedia Computer Science, 196, pp.107-116.

Hwang, S. and Shin, J., (2019). Using Lean Startup to Power Organizational Transformation: Creating an internal division that implemented concepts from Lean Startup helped a consumer electronics firm foster an entrepreneurial mindset among employees. Research-Technology Management, 62(5), pp.40-49.

Kalogiannidis, S., (2020). Covid impact on small business. International Journal of Social Science and Economics Invention, 6(12), p.387.

Khan, K.A., Çera, G. and Nétek, V., (2019). Perception of the Selected Business Environment Aspects by Service Firms: Ajaz Khan, K., Çera, G., Nétek, V.(2019). Perception of the Selected Business Environment Aspects by Service Firms. Journal of Tourism and Services, 10 (19): 111-127. https://doi. org/10.29036/jots. v10i19. 115. Journal of Tourism and Services, 10(19), pp.111-127.

Kim, J., Kim, J. and Wang, Y., (2021). Uncertainty risks and strategic reaction of restaurant firms amid COVID-19: Evidence from China. International Journal of Hospitality Management, 92, p.102752.\

Ritz, W., Wolf, M. and McQuitty, S., (2019). Digital marketing adoption and success for small businesses: The application of the do-it-yourself and technology acceptance models. Journal of Research in interactive Marketing.

Sorenson, O., Dahl, M.S., Canales, R. and Burton, M.D., (2021). Do startup employees earn more in the long run?. Organization Science, 32(3), pp.587-604.

Sreenivasan, A. and Suresh, M., (2021). Modeling the enablers of sourcing risks faced by startups in COVID-19 era. Journal of Global Operations and Strategic Sourcing.

Introduction of Developing Entrepreneurial skills (Part – B Report)

Section 1:

The purpose of the report is to determine how small enterprises affect the overall economy. An in-depth analysis of the impact small enterprises have on the economy is provided in the study. Additionally, the importance of start-ups and small enterprises is covered. Finally, the paper evaluates the effects of small, medium, and big firms on various facets of the economy and offers suggestions for development.

Micro and Small Businesses' Effects on the Economy 

Small and micro businesses largely affect the economy of a nation. Businesses play a role in certain aspects, which are important for the development of a nation. Small and micro businesses help in the creation of jobs that can help decrease the unemployment level of countries (Chege and Wang, 2020). 

These businesses create healthy competition among peers, which can act as motivation for the growth of different companies and hence boost the economic growth of the nation. Small and micro business entrepreneurs bring in different innovative ideas and skills and thus can develop the overall level of business in the nation (Eunice Abdul, 2018). 

To weather the COVID-19 pandemic, numerous people began their individual enterprises and became their own bosses. According to Treece (2018), Americans established 5.4 million new companies in 2021, the highest in a single year by more than 20%.

Importance of Small Businesses and Startups to the Economy 

Small and micro businesses provide tremendous assistance in creating job opportunities for different segments of society. The companies generate a profit and help the community's economy grow (Barbosa, Castaeda-Ayarza, and Ferreira, 2020).

It is indicated by Soontornthum et al. (2020), small and micro businesses use local resources which not only support other small businesses but also create interdependence which can lead to better development of the local economy. These businesses thus act as a protective pillow against recession and provide the means of survival for poor and hungry people enabling them to survive through the harsh conditions. 

Effects of Small, Medium, and Large Businesses on the Economy at Different Levels

According to a 2019 Small Business Administration (SBA) report, it is seen that small and medium businesses make up 44% of economic activities in the United States. The SMEs also produce two-thirds of new employment generation and record 43.5% of the total US GDP (Gross Domestic Product) as stated by Better Accounting (2020). Large firms are better at providing better jobs and salary packages than small businesses and provide additional benefits like health insurance and retirement plans, which entices people to look for jobs in them. Finally, employee turnover is lower in large organisations, which is stated by both employers and employees.

At the local level, small firms have a significant economic influence. More than 20.7 million SMEs exist in the EU, which is more than 99% of all businesses, making them the backbone of economic growth and prosperity (producing 60% of the EU GDP), employment (employing more than 100 million people), and social integration. They also play a critical role in innovation and research and development (Mrva and Stachová, 2014). According to research, large enterprises often provide better jobs than small businesses in terms of pay and stability (Edmiston, 2007).

Small and medium businesses are not able to enter the national and international economies. Large companies contribute greatly to both national and international economies. The consistent contribution of business to the economy serves as the starting point for our study. The value generated by firms of any size, including corporations, partnerships, and sole proprietorships, accounts for 72% of GDP in OECD nations. The remainder is made up of government, nonprofits, and household real estate revenue (www.mckinsey.com, n.d.).

Evaluation 

The report assesses the impact of small, medium and large companies or businesses on various types of economies. It finds that businesses help in job creation and increase the interdependence of various businesses in local and regional economies. The companies also help the countries to develop their economies by providing huge taxes and creating job opportunities in various fields. It also helps the economy decrease its unemployment level and helps the country and economy in times of recession. The companies create healthy competition that helps the businesses feel motivated and try to develop further. This can also help the economy grow by leaps and bounds. 

Recommendations 

The businesses do face some issues as well. These can hinder the workings of small-scale businesses and thus cannot help in the development of the economy. The businesses face issues like a lack of finance. The larger and more successful businesses should help the small businesses in such times. Businesses are very important in economical growth. The businesses should help each other and assist smaller businesses to help them prosper over time. This can cause businesses to develop themselves and help the economy.

Conclusion 

The report fulfils the aim to find the impact that small and micro businesses have on the economy. It also finds the different impacts and significance that the businesses have. The report concludes by stating that small and micro businesses are very important for the economies and can help the economies prosper tremendously.

References

Barbosa, M., Castañeda-Ayarza, J.A. and Ferreira, D.H.L., (2020). Sustainable strategic management (GES): Sustainability in small business. Journal of Cleaner Production, 258, p.120880.

Better Accounting (2020). The Importance of a Small Business. [online] Better Accounting. Available at: https://betteraccounting.com/small-businesses-are-the-backbone-of-the-economy/. (Accessed on: 13 December 2022)

Chege, S.M. and Wang, D., (2020). Information technology innovation and its impact on job creation by SMEs in developing countries: an analysis of the literature review. Technology Analysis & Strategic Management, 32(3), pp.256-271.

Edmiston, K.D., (2007). The role of small and large businesses in economic development. Available at SSRN 993821.

Eunice Abdul, O., (2018). Entrepreneurial skills and growth of Small and Medium Enterprise (SMEs): A comparative analysis of Nigerian entrepreneurs and Minority entrepreneurs in the UK.

Mrva, M. and Stachová, P., (2014). Regional development and support of SMEs–how university project can help. Procedia-Social and Behavioral Sciences, 110, pp.617-626.

Soontornthum, T., Cui, L., Lu, V.N. and Su, J., (2020). Enabling SMEs’ learning from global value chains: Linking the logic of power and the logic of embeddedness of interfirm relations. Management International Review, 60(4), pp.543-571.

Treece, D. (2018). Small Business is Good for Local Economies; Big Business is Not, Researchers Say. [online] Business News Daily. Available at: https://www.businessnewsdaily.com/1298-small-business-good-for-economy.html. (Accessed on: 13 December 2022)

www.mckinsey.com. (n.d.). A new look at how corporations impact the economy and households | McKinsey. [online] Available at: https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/a-new-look-at-how-corporations-impact-the-economy-and-households. (Accessed on: 13 December 2022)

Section 2:

Introduction of Entrepreneurial Success and Impact of Motivation

Entrepreneurship is an important aspect of the economy in the present era. Businesses are an important part of our economy and contribute to its development tremendously. The businesses provide not only economic support but also help in various social causes. The report reflects on the importance of entrepreneurial skills and a mindset that helps gain success in business. It also shows examples of successful entrepreneurs to understand better the traits of a successful business owner. The report also analyzes the conflicting thoughts of various people on entrepreneurial success and the impact of motivation and the relation between entrepreneurial personality and motivation. Lastly, it analyzes the importance of experience in success while providing conflicting thoughts on the subject matter.

Instances of Successful Businesses

The report shows three instances of successful businesses globally to understand the traits shown in the enterprises and the entrepreneurial skills that the businesses put into practice.

Howard Schultz, the CEO of the now globally renowned brand Starbucks, started as an employee in the company and later took over the company and made it globally renowned. The CEO always focused on recruiting the right people to do the task. He believed that the people who know how to do the job could contribute greatly and develop the company. He always thought of the well-being of his employees and focused on the outcomes rather than the process. He is also a man of strong values and always admits and learns from his mistakes. His leadership style is very flexible and full of passion.  He is also very intelligent and is full of confidence, integrity and determination. He also stressed the importance of teamwork and good communication in the business (Papia, 2020).

Sara Blakely, the founder of the popular brand Spanx. She was a fax machine door-to-door salesperson and used the $5,000 savings she had to open her company. The entrepreneur to date did not take any investment from other people and retains 100% of the company's equity. According to Gen-I (2019), the entrepreneur emphasizes the significance of thinking time. She describes that people should be creative in what they do. She also suggests having some personal time to figure out new ideas for the business and this can allow the business to grow further. She also preaches the importance of never backing out. She indicated how she did not ever stop at any cost and she always devoted herself to following her dreams. She also has the mindset to help her attain success. She keeps her mind calm to think and analyze a situation thoroughly before reaching a conclusion. Lastly, she always insists on being her true self.

Ralph Lauren, a sales assistant at Brooks Brothers, was dissatisfied with the men's clothing industry and decided to open a company dedicated to the purpose. He launched his company Ralph Lauren and grossed $500,000 in sales in the very first year (Johnson, 2020). He is very confident and believes in collaborating with others. He is a visionary and appreciates the small attention to detail and this is how he made a fortune over the years (The Inner Entrepreneur, 2021).

Analysis of Different Perspectives of Entrepreneurial Success and Impact of Motivational and Situational Factors

Entrepreneurial success is largely depended on the leadership style and decision-making of the leaders (Fang et al., 2019). According to Kumar and Sharma (2018), entrepreneurial success can be increased by the effectiveness of the organisation by employees and can help businesses thrive.

Motivation also plays a great role in the development of a business. The business deals with employees who if motivated properly can lead to a huge improvement in the company (Tseng, Yi and Yeh, 2019). Employees trends to work towards the betterment of a company when they are motivated (Meyer and Krüger, 2021).

There are certain situational factors as well which help the company progress. According to He and Harris (2020), the COVID-19 pandemic has left the corporate sector in shambles and small and medium businesses helped in the recovery from the economic crisis.

Relation between Entrepreneurial Personality, Motivation and Mindset

Entrepreneurial personality is the key aspect of an entrepreneur. Personality, mindset and motivation work hand in hand to increase the development of the business. It is indicated by Sánchez-López and Pedraza (2020) and Igba, Igba and Monday (2015) that the personality traits that an entrepreneur must possess are discipline, creativity, awareness, resourcefulness and communication. These qualities are very important for an entrepreneur to possess as they can increase the chances of successfully operating a business. These factors work along with the motivation to enhance the success of a business.

The mindset of an entrepreneur is significant as well. The entrepreneur must be mentally stable and strong to handle the pressure that the business might bring along with it (Si et al., 2022). The owner must have a clear idea and contain leadership skills along with a humble mindset to encourage the workers and provide assistance to them in whatever way necessary. It is also important that the owner is aware of his mistakes, admits them, and learns from them. These factors can determine the working of the business and can scale up its success.

Importance of Experience and Background

According to Akpan, Udoh and Adebisi (2022), many businesses faced the tremendous impact of the COVID -19 pandemic. The travel industry is one of the most important examples of how the pandemic of COVID -19 has made a considerable impact on the business. Businesses are greatly impacted by the pandemic and this led to many businesses being hindered and even ceasing. The businesses are heavily impacted as they lost their functioning and had to downsize the business to survive.  Air Italy, a successful airline company in Italy, liquidated in February 2020 and ceased functioning. The airline was the second-largest airline company in Italy. However, due to various circumstances, the airline was facing serious trouble to maintain the business. The immediate cause for their liquidation was the pandemic.

On the other hand, businesses that operated in online marketing were seen to develop during the period of the pandemic. The pandemic created a global lockdown, which resulted in people moving towards online businesses like Amazon.com Inc. Amazon.com Inc did huge business during the COVID-19 period. The business witnessed a whopping 200% increase profit in at the start of the COVID-19 pandemic (Takefman, 2021).

Such is the contrasting effect of the pandemic, where one company had to liquidate and cease its operations, whereas online businesses like Amazon.com Inc reaped the benefits and did more business in the global lockdown period.

Conclusion

The report shows various instances of how important an entrepreneur's mindset is to the development of his business. The report concludes by stating that entrepreneurs with a strong mentality and absolute determination can heavily affect the workings of the organisation and can improve the condition of the business rapidly. It can also be said that motivation is equally important in the business and thus affects the business if the entrepreneur motivating towards his employees. Lastly, the report identifies the contrasting effects of the COVID-19 pandemic on two businesses and identifies the contrasting effect.

List of References

Akpan, I.J., Udoh, E.A.P. and Adebisi, B., (2022). Small business awareness and adoption of state-of-the-art technologies in emerging and developing markets, and lessons from the COVID-19 pandemic. Journal of Small Business & Entrepreneurship, 34(2), pp.123-140.

Fang, Y.C., Chen, J.Y., Wang, M.J. and Chen, C.Y., (2019). The impact of inclusive leadership on employees’ innovative behaviors: the mediation of psychological capital. Frontiers in psychology, 10, p.1803.

Gen-i. (2019). Five Lessons from Sara Blakely. - Gen-i - Inspiration for Businesswomen. [online] Available at: https://www.gen-i.co.uk/index.php/2019/12/02/lessons-from-sara-blakely/ (Accessed on: 13 December 2022)

He, H. and Harris, L., (2020). The impact of Covid-19 pandemic on corporate social responsibility and marketing philosophy. Journal of business research, 116, pp.176-182.

Igba, E.C., Igba, I.D. and Monday, N., (2015). Human capital development: A way forward for entrepreneurial growth in Ebonyi State. British Journal of Education, 3(9), pp.88-102.

Johnson, J. (2020). Famous Entrepreneurs Who Started Small. [online] Available at: https://www.uschamber.com/co/start/startup/successful-entrepreneurs-who-started-small. (Accessed on: 13 December 2022)

Kumar, V. and Sharma, R.R.K., (2018). Leadership styles and their relationship with TQM focus for Indian firms: An empirical investigation. International Journal of Productivity and Performance Management.

Meyer, N. and Krüger, N., (2021), March. South African female entrepreneurs’ motivational factors: Differences between young and established businesses owners. In Forum Scientiae Oeconomia (Vol. 9, No. 1, pp. 75-90).

Papia, F.A., (2020). Leadership Qualities – Style, Skills, and Traits of Howard Schultz. [online]  Available at: https://www.thestrategywatch.com/leadership-qualities-style-skills-traits-howard-schultz/ (Accessed on: 13 December 2022)

Sánchez-López, A.M. and Pedraza, S., (2020). The Resourceful Academic-Entrepreneur: How to Build Entrepreneurial Potential with Limited Budget. Advances in Engineering Education.

Si, W., Yan, Q., Wang, W., Meng, L. and Zhang, M., (2022). Research on the Influence of Non-Cognitive Ability and Social Support Perception on College Students’ Entrepreneurial Intention. International Journal of Environmental Research and Public Health, 19(19), p.11981.

Takefman, B. (2021). Amazon profits increased nearly 200% with COVID-19 | Research FDI. [online] Available at: https://researchfdi.com/resources/articles/amazon-covid-19-pandemic-profits/. (Accessed on: 13 December 2022)

The Inner Entrepreneur. (2021). Ralph Lauren - a nuanced visionary. [online] Available at: https://theinnerentrepreneur.com/36/ralph-lauren-a-nuanced-visionary/. (Accessed on: 13 December 2022)

Tseng, H., Yi, X. and Yeh, H.T., (2019). Learning-related soft skills among online business students in higher education: Grade level and managerial role differences in self-regulation, motivation, and social skill. Computers in Human Behavior, 95, pp.179-186.