The importance of entrepreneurship in small businesses
A NFTE-UK case study

Page 1: Introduction

Most people are familiar with the names of large businesses such as Marks & Spencer and Heinz. Although some may not realise many of today's famous large companies were initially very small. They were started by either one person or a small group of people. This case study demonstrates the vital role performed by small businesses and is sponsored by The Network For Teaching Entrepreneurship...
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Page 2: The importance and benefits of small businesses today

Many businesses start as one person's idea. The creator is often an entrepreneur who spots a gap in the market or a commercial opportunity. S/he turns the idea into a marketable product or service. There are four main types of business: manufacturing, wholesale, retail and service. Some characteristics found in successful entrepreneurs, show they are: prepared to take risks driven by...
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Page 3: Challenges of a small business

Small businesses do have some disadvantages. Running an enterprise on your own involves hard work and making most decisions on your own. Initially there is little time for holidays and considerable risks involved. Also, as the business is small, it is harder to find the economies of scale from which big firms are able to benefit. For example, because small businesses tend to buy relatively small...
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Page 4: Types of ownership

One of the first decisions to be made in starting a business is how the business will be owned. The main choices are between setting up: on your own (as a sole trader) with a small number of partners (partnership) as a private company, with shareholders (limited company). The advantage of sole ownership is that you make all the decisions and take all the profits. However, the sole...
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Page 5: Funding and the importance of profit

New businesses need money to: get started: e.g. buy fixtures and fittings, machinery and equipment, often referred to as 'initial one-off costs' pay the costs of operating the business e.g. wages, rent, rates, heating and lighting. Start up finance includes: the owner's (or owners') own funds (including share capital in the case of a private company) bank loans, or loans from...
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Page 6: Conclusion

In the modern world people can no longer expect large enterprises to guarantee them jobs for life. Individuals are increasingly expected to seek out their own opportunities, actively create value and behave ethically, rather than faithfully follow rules and routines set by others. In particular, today's young people need to learn to be enterprising, both when working for others and when setting up...
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