Small business sectors are increasingly driving the economy of many countries. The rise is all thanks to the rise of different entrepreneurial ventures. Many business start-ups are strictly meant for commercial purposes although access to capital continues to be the biggest thorn issue to many starts up entrepreneurs. There are different types of entrepreneurial ventures such as survival ventures that are intended to provide basics to the family. The survival type of venture involves a business that is not registered and mostly the owner has no specific location for the business. The venture on most occasions has few assets and also has less use of banking transactions (Morris et al., 2016). Such kinds of ventures are only set up to ensure the owner has a fulfillment of his or her personal needs and can provide for the family at the end of the day. The venture is characterized by a lack of capacity for business reinvestment. The business is primarily driven by the needs of the owner and lacks specialization since they do not target a specific market. Secondly, we have lifestyle ventures that can provide the owner a much stable income and can easily be manned. Although it has a small or local set up, the business allows for reinvestment since it has to compete with other local start-ups. The business venture has a specific location and premise and has employees. However, although it can grow such kinds of businesses are not out to seek meaningful expansion in the long run. The number of employees at all times remain the same. The business can involve bank transactions in its operation although it does enjoy economies of scale in the long run. Another type of business venture is the managed growth ventures. These kinds of businesses have a well-established business model (Morris et al., 2016).
The venture always has the thirst to grow and keep expanding in the long run. To be competitive and attract new customers the venture keeps coming up with new products and launches them into new markets. Such ventures are very ambitious and have economies scale in their operations. The venture has strong ability to reinvest most of its proceeds to drive its growth strategy. This kind of venture always has the best business development plan and can develop into a bigger venture in the long run. Lastly, we have aggressive growth ventures that are characterized by their having the best innovation techniques. Such investments are mainly technology-based and are out seeking exponential growth (Morris et al., 2016). Unlike other ventures access to capital by these ventures is easy in the long run depending on the type of business idea. These ventures are financed by equity capital with the founders always running it as a team. The venture is driven by the urge to provide something new to the market. The innovation involves the analysis of the current market gaps where they examine how the market is currently and how it is supposed to be. It is from this analysis that they come up with innovations that can address and fill the new market needs.
Entrepreneurship has been the prime concern in many world economies. Research has that many of the world richest people grew their wealth through entrepreneur. They involved themselves in small business ventures that later grew to huge businesses. The world has its Bill Gates, Steve Jobs, and other rich people had good ideas that they developed into greater businesses. In every situation, the world may have missed one thing or another, and this is a problem that is always there. The work of the entrepreneurs is to make sure that the gap in the society is filled and humankind get what they need at their disposal. The business venture that a person can get to is the life coaching business. This is a business related to my skill of mentorship and ability to talk to people and influence them to carry out the best activities in life as possible. In this venture of business coaching, it needs me to understand the psychology of my clients, their daily needs and gather information about their income and educational background. The value of life coaching is reached upon when the client successful achieves his or her goals. Many people today face life problems because of a failure to understand what they need in their lives. In some cases, humankind faces depression and get stressed after realizing that they have not achieved what they wanted. This has necessitated me with the talent I have to look into the needs of the people with passion and be able to help them come with solutions that would help solve their problems. Apart from wanting to give a solution to people, I want my business goal to be able to prevent life hurdles from happening often. Life should be an easy thing for every human to enjoy and live as long as they are in a good economy and they have enough food and people are also able to get access to health facilities easily then there would be no need to suffer from my company around
Impact of SMEs
Small businesses have a significant impact on the U.K economy thanks to the number of people they employ and the number of their daily transactions. Since 2013, the number of small businesses in the U.K has significantly increased where to date the trend keeps on increasing. To sustain the economy then the country needs SMEs to drive it. Currently, over 99% of U.K businesses are classified as small businesses. Many of the businesses in U.K employ less than ten people. The small figure, however, accounts for almost 33% of the total employment in the country. It is estimated that SMEs accounted for almost 15.2 million jobs in the U.K (Taylor, 2018). As of 2015, the total number of small and medium-sized businesses had increased from 3.5 million in 2000 to 3.5 million businesses. The growth of SMEs has resulted in them being the biggest employers in the country.
It is imperative for the government to come up with better policies that will ensure these SMEs survive in the long run. Such policies include tax breaks that will encourage meaningful employment and offer easy access to short- and long-term loans through U.K financial institutions. Generally, the government has to make sure that it does not get into the way of these small businesses to allow freedom to carry out their functions effectively. Statistical data shows that the SMEs contribute up to 47% of the country’s revenue (ESRC, 2018). The growth of SMEs has translated into increased innovation in the country although efforts have to be made to promote their activities. Data shows that only one in every five of them in U.K are exporters although many of the SMEs in the country has the capacity to become exporters. When compared to other European countries, SMEs in U.K have a high urge to grow and expand.
Current 2018 data shows that small businesses are 5.6 million although this is a 0.5 % decline. The country has witnessed a reduction of businesses, 27,000 new start-ups reduction. However, the level of private sector new employment increased by 2% where a total of 304, 000 new jobs were created. Of all the total private sector’s business, SMEs account for up to 99.3% of the total businesses. With this significant figure, the total number of people employed by SMEs as of 2018 stood at 16.3 million accounting for over 60% of the total employment in U.K in the private sector (FSB, 2018). SMES turnover stood at $2 trillion which accounted for 52% of the total turnover from the private sector. Form these statistical figures it is imperative that the government takes an active role in promoting SMEs in the country due to the impact it has on the GDP and overall employment rates.
First, the government has to promote SMEs innovations and encourage its expansion to the international markets. Implementing this will guarantee that the country’s economy becomes more productive which will increase the overall gross value added. Research has proved that SMEs that have an international outlook have a high probability of coming up with innovations unlike the local small businesses. In general, the productivity level of the country has slowed down in recent years when compared with other European countries. A closer comparison with the U.S further shows how the country lags in productivity levels. The Brexit vote negatively impacted the growth of SMEs hence the need for the government to fast track the implementation of the BXIT plan to ensure new start-up are up and running. To increase the impact or contribution of SMEs in the economy the government has to increase its business growth initiatives and encourage investments in U.K. To encourage innovation; then the government has to carry out massive SMEs education to promote new ideas and further expand into the international markets.
The government has to establish a long-term plan or strategy tailored towards the education of new generation entrepreneurs that will increase the productivity levels. Generally, there are major differences between small and big businesses. The differences come from the number of people they employ, the mode of financing, market niche and the overall total turnover. SMEs mainly raise finances from owner’s savings while big firms get capital from issuing of shares and getting huge bank loans. Also, big firms employ many people while SMEs employ less than ten people. However, we have SMEs with up to 250 employees. The main cultural outlook of SMEs involves them having to take huge risks that can at time result into losses while big firms tend to shy away from risks.
The development of personal relationships is among the importance of small businesses to the social economy. Small and start-up businesses do not have broad scopes of the customer base. Thus they can foster personal relationships with the community quickly. The persons as mentioned above include; suppliers; customers as well as employees. With the size of the enterprises, the ventures can work closely with the above stakeholders because each of them gets sufficient duration to exhaust their predicaments unlike big businesses (Bergmann et al., 2016, 567). With a small enterprise, entrepreneurs can know who they are dealing with through establishing a face to face talks with the person in contact. Person to person communication is vital more than ever when establishing healthy relationships. The above has not only helped small businesses get the needs and preferences of their consumers but also gain goodwill in the economy. The above is because clients who have dealt with the enterprise will go around talking positively about the business for having met their points of need. A positive result to above will be a large customer base and in the long run competitive advantage.
There is lower prices to customers as small and start-up businesses have a small operational base, hence they experience low overheads in their operations. Expenses such as administrative; marketing; operational expenses among other expenditures are relatively low among small and start-up businesses comparatively to large firms. Due to the above low overhead cost, the enterprises' cost of products and services will be consequently low hence drawing more customers. Majority of the population is composed of middle and low income earning citizens, thus will benefit much more getting the same satisfaction from small businesses at cheaper cost.
There exist exceptional services guaranteed by small and start-up businesses as small and start-up enterprises offer one of a kind products to their esteemed customers. The above is attributed to their relationships with their consumers as well as their innovative nature. Small businesses are mainly composed of young innovators or entrepreneurs who strive at coming up with something never thought of in the industry. As a result of the above, they develop products and services which are unique compared to other enterprises in the same industry. The United Kingdom, for example, has millions of such small businesses. Hence, one can only fathom the immense customer repulsion experienced in the nation.
Maintaining money circulation within the economy is another benefit of small businesses to the economy. Small and start-up businesses are mainly beneficial to the local community. The above implies that money circulation will be centered within a given scope. People of the population give money in exchange of commodity in the same sequence on a day to day basis. Circulation of the funds at that local level helps the community develop because some people get money which they never had will others receive services or product. The above creates a "win-win" situation in the economy as a whole because a secure network of local money enables people and businesses within the community to support one another.
Characteristic Traits and Skills of Successful Entrepreneurs
Successful entrepreneurs have specific traits that make them different from other business managers. It is these traits that make them have different business perspectives hence able to manage risks and compete effectively. First, most of them are very disciplined. The high discipline motivates them to understand how their business works hence they can do away with any forms businesses hindrances that can affect the success of their start-ups. Effective discipline is characterised by coming up with sound strategies that enable them to be accomplished in the long run. Secondly, these entrepreneurs have confidence in what they have set up their minds to do. Such entrepreneurs are sure that they are going to succeed hence have exuded confidence in courses of actions that they undertake (Adams, 2017).
Moreover, successful entrepreneurs are very creative and competitive. In the course of the business, such people encounter new challenges or problems. Successive entrepreneurs always find out solutions to business challenges through innovations. It is ingenuity that drives most of them to become successful (Adams, 2017). The innovation and creativity make them competitive. New start-ups keep on mushrooming in various sectors of the economy hence the need to be competitive and have the edge over other new and existing entrants. Successful entrepreneurs always take the initiative to come up with new products and operational efficiencies that make them remain at the top.
Also, they have vision and versatility. Most of them have their eyes set on the bigger picture hence the constant growth and expansion (Bortz, 2018). Most of them see the current sector or industry they are in as it is and determine its direction. From this, they set out the direction of their business towards achieving their long-term objectives. Being visionary also involves the determination of the firm’s challenges and coming up with ways of tackling them. Basing on the vision, they want their business to accomplish; such people tend to be more versatile where they adapt to new changes such workforce skill changes and change of market niche changes. Such people are risk tolerant. Being an entrepreneur requires one to accept a risk and embrace it. Such people do not shy away from risks. They have nothing at the start of the business; hence they have to take risks to be successful since nothing comes easy.
Lastly, successful entrepreneurs are very open-minded. They visualise every situation and see anything to be a potential opportunity for business growth. They recognise the need for teamwork and collaboration. With teamwork, they have a pool of business ideas such as work efficiency and the need to grow. Successful entrepreneurs express the highest level of determination; they always have the urge to be on top hence they work hard to realise their goals. The high determination is characterised by them having a strong people skill, some of the skills include the best communication skills that make them to easily sell to the consumers. Such people can motivate employees through efficient working relations.
The different traits on the personality of entrepreneurs have a bearing on their mindset and motivation. First, their mindset and the main source of motivation is not the need for profits. They are more motivated by the idea they have coined and realising the idea in the long run. This is what makes them be creative and risk tolerant. Although money is part of the key motivators to expand the business, the need to realise the idea and be competitive drives most of them. Such people tend to be extroverts who are very energetic. They have a mindset set on being leaders of the business. They will do anything to be at the top of the business. Also, they tend to be conscientious in the sense that they are very orderly and responsible in what they do. Their mindset is characterised by having a high sense of self-confidence that motivates them to be decisive in the daily running of the business. Such an individual has a strong sense of openness where they are motivated to seek ideas and share them with other people such as the employees. There different lines of argument relating to entrepreneurial characteristics. The different points of argument involve the ability of an entrepreneur to be a realist, optimist or a pessimist. Many schools’ thoughts have different arguments in relation to how the entrepreneur has to be in the long run although many prefer optimism.
Entrepreneurs possess strong people skills, a quality that separates a business manager from an entrepreneur. Unlike business managers, an entrepreneur has a proficient communication skill which they utilize to sell their products to the esteemed customers. Other than the above, the influential people skill enables them to identify how to motivate their colleagues and employees. Motivation is an essential element in any business set up as it makes employees strive to achieve their best to enhance organizational performance. Managers go wrong in the above quality due to lack of ability to highlight benefits from any circumstance. Entrepreneurs, on the other hand, are outstanding in highlighting the goodness of any circumstance and coaching the rest towards their success (Piperopoulos et al., 2015, 776). The above not only help the entrepreneur develop a strong bond with the fellow employees, but also enhance organizational efficiency and effectiveness because every employee in the workplace can clearly define his or her roles.
Exemplary work ethics is another character of successful entrepreneurs. Majority of the organizations or businesses fail to meet their targets due to problems from their managers not exhibiting strong working ethics. Contrary to the above, entrepreneurs have the highest level of work ethics as it can be seen in successful entrepreneurs. It is a common observation at work to spot successful entrepreneurs arriving their offices as the first people and leaving as the last people. Business managers, on the other hand, go most of the workload to their junior associates, hence enabling business managers to leave work early and arrive late. Other than showing strong work ethics through time in and out, entrepreneurs will often be spotted to come in the offices during their off days to ascertain that a specific result meets their expectation. Entrepreneurs' mind is always glued to their work, be it at their workplaces or anywhere outside work premises. If only managers would imitate such culture manifested among entrepreneurs, businesses would ever see success.
Having passion is a trait accounts for a higher percentage of requirement as a successful entrepreneur. Majority of business managers are never willing to factor in extra hours of their time to make businesses thrive. The above is as a result of lack of joy towards the companies because they are merely mandated by shareholders to act as stewards of a business. On the contrary, entrepreneurs find comfort in their companies and it goes far much beyond money gratifications. Entrepreneurs are observed as people who can put in more hours on their venture on a daily basis to ensure their enterprises perform well. As opposed to business managers, successful entrepreneurs will always be performing researches through intensive reading to establish means to make their enterprises stand better chances in the economy. Entrepreneurs' ultimate desires are to see their ventures on the top level like the peak of a mountain. The above view is often shared by many business managers who are often after reaching targets set by their shareholders. Nonetheless, the entrepreneurs never stop there at ensuring their businesses are at the top because once they arrive there, they always want to advance further. Entrepreneurs achieve that not only through active research but also due to their ability to communicate to their employees and their ventures soar consequently.
Determination trait makes business managers differ from entrepreneurs in traits, due to their inability to endure from a defeat. Nevertheless, entrepreneurs are never thwarted by their past losses but view defeat as a challenge to succeed. Entrepreneurs, upon experiencing a prior failure quickly dust off and keep the ball rolling. The difference is the determination to ensure all their endeavors succeed, hence entrepreneurs will try and try until there is a sign of hope. Therefore, successful entrepreneurs do not have the vocabulary “something can not be done" in their line of thinking. The above trait has been among the dominant characteristics that create an edge between entrepreneurs and business managers. Determination has been discovered by a psychologist named Ivan as the sole driver towards successful business ideas. Entrepreneurs never give up; they will work day and night tirelessly to ensure their innovation has seen the light of day.
How Background and Experience Can Hinder or Foster Entrepreneurship
Growing into a successful entrepreneur comes as a result of factors such as background, the level of education and the kind of experiences one had as a child and even into adulthood. The family background that one might have come from has a huge impact on the ability of a person to become an entrepreneur. The type of parenting that had a support system through learning how to make decisions by himself and mentoring is a great motivator to becoming an entrepreneur. Poor family backgrounds such as lack of mentoring and the in the ability to have a support system is a major hindrance to becoming an entrepreneur. Also, the socialization process of an individual during childhood can also act as a hindrance or a tool to becoming a business person (Romer, 2009, 22). Entrepreneurs have to socialize to convince consumers of their products. As one grows into adulthood, he also relies on the family support system. Having a family background that is very supportive can help one be an entrepreneur since one relies on the family’s contribution to start a business. Lastly coming from a family background where one’s parents had a business can foster entrepreneurship. For example, if one comes from a family that sales machinery, he or she will be motivated to start his or her own SME or take up the functioning or operations of the family business.
The level and type of education also affect entrepreneurship. The ability and opportunity to learn entrepreneurial skills from experiences of past entrepreneurs is a sound motivating factor. One can be hindered to be a successful entrepreneur due to lack of past experiences and learning from other entrepreneurs. For example, if one gets his learning from a failed entrepreneurial venture, there is the possibility that he will fail in thong run if he does not change. Having experience by learning from mentors is one of the requirements for a successful entrepreneur (Romer, 2009, 23).
Moreover, experiences have a strong bearing on the successes and failure of an entrepreneur. One gets experience depending on what he or has used to do on her free time and the kind of hobbies he or she had. For example, if in the past one sold simple things to classmates then the experience, he or she got can motivate them to become serious entrepreneurs. Coming from families who have already established businesses also acts as a source of experience where can be introduced into the selling of items. The experience that one gets can become a source motivation towards entering into a new venture. Also, normal experiences during one’s free time can make them be creative and come up with new ideas. For example, childhood and adulthood experiences by looking at what people are doing can make one determine if there is a gap in what the market is offering. The existence a gap can motivate one to innovate a new product or service that can target a specific market niche. Past experiences of harassment and bullying can hinder one’s ability to become an entrepreneur. The confidence of the individual and his ability to socialise can negatively be affected hence one will shy away from venturing into any new business. The ability to have confidence and face others is the key driving force towards being a successful entrepreneur. The different entrepreneurial traits have a strong relationship with the type of background one comes from. Being creative and visionary means the family background and level of education were very supportive characterised by strong mentorship. The ability to be risk tolerant and decisive is an indication of a past upbringing where one is taught on the need to be decisive in life. Poor social backgrounds such as lack of family support do not result in the successful traits of an entrepreneur.
Cultural value can act as a motive towards entrepreneurs' success or failure. An entrepreneur would excel or fail depending on his or her cultural background. In case the culture where the person was nurtured was economically, or monetary bounded the person would strive so hard to become successful in his or her business to accumulate much wealth as possible. A perfect example is in case a person came from a background where he or she knew the only way to attain prestige or social status; you have to venture into selling vehicle spare parts he or she would, therefore, pursue similar business to achieve such standards. The opposite is also exact, people who are nurtured in societal backgrounds that do not exalt wealth through personal businesses would be relaxed from venturing into their private ventures. The above is because the role model plays a vital role in either achieving or failing in the field of entrepreneurship (Spartz et al., 2015, 987). A perfect example is a person who is born in a society where it is a culture to seek for employment straight regardless of whatever return obtained. People from that kind of background will grow knowing there is nothing beyond profession hence would not become an entrepreneur.
Attitudes of the society can promote or hinder entrepreneurship development. The above is mainly concerned with the beliefs of the community towards entrepreneurship can either break or make an entrepreneur. There are specific societies that support innovations and originality, hence sanction entrepreneurs' actions. Nevertheless, some cultures do not agree with such entrepreneurial endeavors hence no growth can come from it. A perfect example is Russia who never liked profit generating activity during the nineteenth century, thus an excellent reason why their economy was staggering during the19th century. Nevertheless, a society which views entrepreneur as an innovative way to earn a living would support the young upcoming entrepreneurs to become business personnel. The above not only improves the societal image but also foster many entrepreneurs towards making in business. Other than an educational and family background of a person, cultural values and societal attitudes determine success or failure in entrepreneurship.
References
Bergmann, H., Hundt, C. and Sternberg, R., 2016. What makes student entrepreneurs? On the relevance (and irrelevance) of the university and the regional context for student start-ups. Small Business Economics. 47(1), pp.53-76.
Piperopoulos, P. and Dimov, D., 2015. Burst bubbles or build steam? Entrepreneurship education, entrepreneurial self‐efficacy, and entrepreneurial intentions. Journal of Small Business Management. 53(4), pp.970-985.
Spartz, J.M. and Weber, R.P., 2015. Writing entrepreneurs: A survey of attitudes, habits, skills, and genres. Journal of Business and Technical Communication. 29(4), pp.428-455.
