Unit 9

Entrepreneurship and Small Business Management

Ali Usman
Typology ( types) of entrepreneurship

• Lifestyle entrepreneur
• Serial entrepreneur
• Corporate and organisation entrepreneur
• Social entrepreneur
• Public sector entrepreneur
LO1 Explore and illustrate the range of venture
types that might be considered entrepreneurial
The typology of entrepreneurship:
• Lifestyle and growth firms. Entrepreneurship in a
corporate or public sector context.
• Roles and characteristics of micro, small and
medium-sized organisations.
• Social enterprise:
• Understanding social enterprise, social
entrepreneurs and the growth of the social
economy.
 Lifestyle and growth firms

• Lifestyle businesses firms are those

businesses designed for long term passive
income and not necessary for growth.
• They are described as businesses that are
designed to support the owner’s income and
personal requirements rather than maximizing
revenue. 
 Lifestyle and growth firms

The setting up of a Lifestyle business is driven by the

desire to create a foundation which supports the
entrepreneur lifestyle and goals.
The lifestyle entrepreneur desires work centered around
their passions and personality.

Qualities of a Lifestyle Entrepreneur

• Desires Freedom & Independence
• Values happiness
• Independent thinker
 Lifestyle and growth firms

Lifestyle Business are usually small scale

in nature, with lower or limited chances
of large gains. This means such firms
require or have limited funding. Such
firms do have difficulty attracting top
talents; despite the benefits (Time,
location and financial freedom)
associated with them.
 Activity 1
Q. Which of the following is an example of a lifestyle business?
1. A museum of Fine Arts.
2. A government-funded museum that houses a collection of
19th and20th century American, German, and French
paintings.
3. A paper recycling unit that employs about 800 employees.
4. A self-employed landscape designer.
5. A firm that is the leader in the English-language book
publishing sector.
6. Nature's Delights, an international gourmet food chain that
is considered to be the world's leading retailer of natural and
organic foods
 Lifestyle and growth firms.

• Growth firms are those businesses set up by

entrepreneurs intended to grow rapidly and
create significant profit
 Goal is maximum profit and growth.
 Concentrated on pushing envelope and growing
as large as possible.
 Focus on innovation
• Growth businesses have a repeatable sales
process that doesn’t involve the owner/founder
 Entrepreneurship in a corporate or public
sector context.
• Entrepreneurship in a corporate or public sector
context involves innovation, the ability to take risk and
creativity.
• Entrepreneurship in a corporate or public sector
context, often referred to as Intrapreneurship, is a
novel way of making organizations more profitable
where imaginative employees entertain
entrepreneurial thoughts.
• Intrapreneurship is a significant method for companies
to reinvent themselves and improve performance.
 Corporate Entrepreneurship
• Corporate Entrepreneurship is a process used
to develop new businesses, products, services
or processes inside of an existing organization
to create value and generate new revenue
growth through entrepreneurial thought and
action.
 Public Sector Entrepreneurship
• Public sector entrepreneurship refers to
innovative public policy initiatives that
generate greater economic prosperity by
transforming a status quo economic
environment into one that is more conducive
to economic units engaging in creative and
innovative activities in the face of uncertainty
 What Is a Social Entrepreneur?

• A social entrepreneur is a person who pursues

novel applications that have the potential to
solve community-based problems. These
individuals are willing to take on the risk and
effort to create positive changes in society
through their initiatives.
 Entrepreneurship in a corporate or public
sector context (Difference between an
intrapreneur and entrepreneur).

• Entrepreneurs are people that notice opportunities

and take the initiative to mobilize resources to make
new goods and services.
• Intrapreneurs also notice opportunities and take
initiative to mobilize resources, however they work in
large companies and contribute to the innovation of
the firm.

• Intrapreneurs often become entrepreneurs.

 Entrepreneurship in a corporate or public
sector context (Difference between an
intrapreneur and entrepreneur).

• Intrapreneurship is the practice of

entrepreneurship by employees within an
organization.
• An intrapreneur is an individual employed by an
organization for remuneration, which is based on
the financial success of the unit he is responsible
for.
• Intrapreneurs share the same traits as
entrepreneurs such as conviction, zeal and insight.
 Entrepreneurship in a corporate or public
sector context (Difference between an
intrapreneur and entrepreneur).

• An entrepreneur is independent in his

operations.
• An intrapreneur is dependent on the
entrepreneur, i.e., the owner
• Funds are not raised by the intrapreneur.
• An entrepreneur himself raises funds required
for the enterprise.
 Entrepreneurship in a corporate or public
sector context (Difference between an
intrapreneur and entrepreneur).

• Entrepreneur bears the risk involved in the

business.
• An intrapreneur does not fully bear the risk
involved in the enterprise.
• An entrepreneur operates from out-side.
• On the contrary, an intrapreneur operates
from within the organisation itself.
 Entrepreneurship in a corporate or public
sector context.
Advantages of Entrepreneurship
To an Individual
Provides Self Employment for the entrepreneur
Entrepreneur can provide employment for near & dear one as well
Entrepreneurship often provides an employment and livelihood for
next generations as well.
Freedom to use own ideas – Innovation and creativity
Unlimited income / higher retained income – Bill Gates has risen to
become richest in the world in a single life time through
entrepreneurship
Independence
Satisfaction
 Entrepreneurship in a corporate or public
sector context.
Advantages of Entrepreneurship
To the nation
 Provides larger employment – Entrepreneurs provide employment
for self as well as other people and is source of employment
creation.
 Results in wider distribution of wealth – This is a logical sequel of
above issue. Higher the employment, greater the distribution of
wealth
 Mobilizes local resources, skills and savings
 Accelerates the pace of economic development – Entrepreneurship
is the govt’s one of the most trusted vehicles for economic
development
 Stimulates innovation & efficiency
 Entrepreneurship in a corporate or public
sector context.
Characteristics of an Intrapreneur
 Vision – It is the basis for successful venture. An
Intrapreneur has ability to visualise from idea to
implementation.
 Motivation – Intrapreneur is generally self motivated,
but expect corporation reward and recognition.
 Orientation – Intrapreneur is achievement oriented.
 Risk Appetite – Intrapreneurs are moderate risk takers
since risk acceptance depends on their skills. Wild risk
takers are not affordable to corporate businesses.
 Entrepreneurship in a corporate or public
sector context.
Characteristics of an Intrapreneur
• Locus of status – Intrapreneurs want to do the work on
their own rather than delegate like managers
• Failure and Mistakes – Intrapreneur hide risky projects
and ideas to ensure learning without political cost and
public failure. They develop multi disciplinary
• team in the organisation and may go beyond
organisation boundaries for results.
• Goal set up – Intrapreneur are determined to do things
not even asked for. They set goals and quality standards.
 Roles and characteristics of micro, small and
medium-sized organisations.
 Small businesses …
– Ones with 50 or fewer employees.
– Independently owned and operated.
– 50 percent of the private labour force works in small
businesses.
– Are established by:
• Starting a new business.
• Buying an existing business.
• Buying and running a franchise.
 Roles and characteristics of micro, small and
medium-sized organisations.
• A micro-business is a firm with five or fewer
employees.
• For accounting purposes Companies House
defines a small business as employing less
than 50 people and a turnover under £6.5
million and a medium size business as less
than 250 employees and a turnover under
£25.9 million.
 Roles and characteristics of micro, small and
medium-sized organisations.

The EU definition of an SME:

• Micro Business = less than 10 employees
& turnover under £2 million
• Small Business = less than 50 employees
& turnover under £10 million
• Medium Business = Less than 250
employees & turnover under £50 million
 Roles and characteristics of micro, small and
medium-sized organisations.
• The Small-Business Sector
 Industries That Attract Small Businesses
– Distribution Industries
– Service Industries
– Production Industries
 The Importance of Small Businesses in Our Economy
• Providing Technical Innovation
• Providing Employment
• Providing Competition
• Filling Needs of Society and Other Businesses
 Roles and characteristics of micro, small and
medium-sized organisations.
 The Importance of Small Businesses in Our Economy
• Providing Technical Innovation
• Providing Employment
• Providing Competition
• Filling Needs of Society and Other Businesses
• Small scale industries play an important role in the
GDP
• Promote income distribution
• Develop capital investment
 Roles and characteristics of micro, small and
medium-sized organisations.
 Reasons for small business failures:
– Lack of experience
– Lack of expertise
– Lack of strategy and strategic leadership
– Poor financial control
– Growing too fast
– Insufficient commitment
– Ethical failure
 Understanding social enterprise, social
entrepreneurs and the growth of the social
economy.
• Social enterprises are defined as nonprofit or
for-profit business ventures that strive to
achieve a quantifiable double bottom line of
financial and social returns. These ventures
are financially self-sufficient.
• Social Enterprise includes both nonprofit and
for-profit organizations focused on delivering
both financial and social returns.
 Understanding social enterprise, social
entrepreneurs and the growth of the social
economy
• A social enterprise is a business that trades for a
social and/or environmental purpose. It will have
a clear sense of its ‘social mission’:  which means
it will know what difference it is trying to make,
who it aims to help, and how it plans to do it.  It
will bring in most or all of its income through
selling goods or services.  And it will also have
clear rules about what it does with its profits,
reinvesting these to further the ‘social mission’.
 Social economy
• Social economy is defined as the sum of all co-
operatives and credit unions, non-profit and
volunteer organisations, charities and foundations,
service associations, community enterprises, and
social enterprises that use market mechanisms to
pursue explicit social objectives. 
•  The social economy is based on cooperative, not-for-
profit, and voluntary rather than paid activities
carried out within communities, across national
economies, and internationally.
 4 Pillars of Social Economy
Mutuals
Mutuals are enterprises providing life and non-life insurance services, complementary social
security schemes, and small value services of social nature. Their primary purpose is to satisfy
common needs while not making profits or providing a return on capital. Mutual societies are
managed according to solidarity principles between members who participate in its
corporate governance. They are intended to be accountable to those whose needs they were
created to served

Foundations
A foundation (also a charitable foundation) is a category of nonprofit organization or 
charitable trust that will typically provide funding and support for other 
charitable organizations through grants, but may engage directly in charitable activities. [1]
 Foundations include public charitable foundations, such as community foundations, and 
private foundations which are typically endowed by an individual or family. The term
"foundation" though may be used by organizations not involved in public grant making. [
 Association
Business associations are open membership organizations that form to provide
community charitable support, networking opportunities and general business
promotion in a city, state or region. Examples of this type of business association
are the state and local Chambers of Commerce, the Better Business Bureau, Rotary
Club, Lions Club, Elks Club, and the various business lead generation clubs such as
Leads Clubs International

Charities
A charitable incorporated organisation (CIO) is a new form of legal entity designed for 
non-profit organisations in the United Kingdom. The main intended benefits of the new
entity are that it has legal personality, the ability to conduct business in its own name,
and limited liability so that its members and trustees will not have to contribute in the
event of financial loss. These are already available to limited companies; charities can
be formed as companies, but then they must be registered with both Companies House
 and the Charity Commission. In contrast, the CIO only needs to register with the Charity
Commission. This is expected to reduce bureaucracy for the charity.[1]
 Understanding social enterprise, social
entrepreneurs and the growth of the social
economy.
 Types of Social Enterprises
• Nonprofits with income from products/services
supplemented by external support and subsidies

• Nonprofits with income from products/services not

supplemented by external support and subsidies

• For-profit company that pursues financial return and

simultaneously generates social outcomes
 Social Enterprise Track

Profit/Mission Continuum
Focus for Social Enterprise Track

Mission- Traditional Nonprofit Businesses Traditional Profit-

focus Nonprofit Earned with Social Business focus
Activities Income Outcomes Activities

Tax-exempt, Business A for-profit Activities

mission-related activities that company that motivated by
Definition activities that are generate earned pursues financial the primary
not commercially income to return and purpose of
motivated support a simultaneously returning profits
nonprofit mission generates social to shareholders
outcomes

Social return Financial Financial Financial

on investment and social and social return on
Objectives through return on return on investment
achievement investment investment
of mission

Mercy Corps Greyston Edison Schools General

American Bakery Microfinance Motors

Examples
Cancer Pioneer Human Solar/green American
Society Services power cos. Express

Conducted by Nonprofit Organizations Conducted by For-Profit Organizations

 Social entrepreneurs and the growth of the
social economy

• Social entrepreneurship is the philosophy of

individuals and enterprising groups to adopt
innovative drives aimed at addressing social
issues.
• The activities of extraordinary public innovators
such as Bill Gate, Jamie Oliver, Warren Buffet
and Mahatma Gandhi, as well as the collective
efforts of groups like Care International, Help
Age and the Eden project.
 Understanding social enterprise, social
entrepreneurs and the growth of the social
economy
• Are businesses that aim to generate their income
by selling goods and services, rather than through
grants and donations
• Are set up to specifically make a difference
• Reinvest the profits they make in their social
mission
• Encouraged by Government as a useful
complement to Government activities to improve
social welfare and wellbeing.
 Social entrepreneurs and the growth of the
social economy
• Entrepreneurship is usually discussed in a
business context as creative pursuit of private
profit and gain.

• Since early 1990s there has been recognition

that entrepreneurs can operate for non
private gain. It is such individuals that are
called social entrepreneurs and what they
practice is called social entrepreneurship.
 Social entrepreneurs and the growth of the
social economy
 What is social entrepreneurship and what do social
entrepreneurs do?

• Not just philanthropy / good works / basic altruism

• Mobilisation of sound entrepreneurial principles

• Targeted at making long-term sustainable change

 Social entrepreneurs and the growth of the
social economy
• Social entrepreneurship is pioneering
extraordinary changes in the social fabric of
many communities across the world.
• Generates benefits through the creation of
- social capital
- improved and more efficient provision of
public goods
- Establishment of new ‘hybrid’ business
forms
 Social entrepreneurs and the growth of the
social economy
 The key factors behind social enterprise are as
follows:-
• Social issues inadequately addressed by government
• Need to raise funds for charities
• Changing public sector
- budget cuts require new revenue streams
- change rather than good stewardship leads to
promotion
• Growing demand for corporate social responsibility
and ethical entrepreneurship
 Social entrepreneurs and the growth of the
social economy

• Social entrepreneurship:
- New paradigm of social value creation
- Reflects a dynamic revolution in the social
sector and its importance is being
increasingly recognised in the corporate
sector
• Recognises social problems and employs
traditional entrepreneurial principles
• It embraces complex challenges e.g. triple
bottom line objectives
 Social entrepreneurs and the growth of the
social economy
• According to Bessant & Tidd, 2007, the
philosophy requires learning and absorbing a
new set of skills for managing innovation
along with current management thinking.
- Identify and engage a wide range of stakeholders
- Understand and meet their very diverse
expectations
- Mobilise resources across networks
- Build coalition of support for socially valuable
ideas
 Social entrepreneurs and the growth of the social
economy

• Spot a gap in the market and try to fill it

• Be clear why you want to do it
• Develop networking abilities
• Be good at spotting and reusing resources that
are underused or abandoned (e.g. buildings
and open spaces)
• Make mistakes and learn from them
• Manage the cash flow
 Social entrepreneurs and the growth of the
social economy
• Use ‘viral’ marketing i.e. word of mouth via the Internet
and mobile technologies

• Identify your skill needs and map your existing and

required network:
- Management
- Financial
- Sales and marketing
- Production
- Distribution
- Service

• Get an expert to review your plan