I have recently been working on a talk about how teaching young entrepreneurs can help keep our communities going as the boomers retire and move on (will post more on that topic soon). When I was presenting the talk to some of my entrepreneur friends, they commented that they didn’t think of a restaurant owner or a small business owner as an entrepreneur and wanted to know what my definition of an entrepreneur was.
Being quite surprised by this, I decided to do some research.
First, I Googled the Definition for both an entrepreneur and a small business owner and here is what I found:
The first one listed for entrepreneur is the dictionary definition:
noun: entrepreneur; plural noun: entrepreneurs
- a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.
Small Business Owner is not listed as a dictionary definition only the term small business. The Small Business Administration’s (SBA) definition is as follows:
The definition of a small business is an independently owned and operated company that is limited in size and in revenue depending on the industry.
Then I searched “What is the difference between an entrepreneur and a small business owner? There were 113,000,000 results – wow!
I chose a few reputable sources including Forbes, Entrepreneur and Oxford (definitely don’t have time to read 113,000,000 articles) to see if I could find out if they too had the belief that entrepreneurs and small business owners are different. To my surprise, yes, they too thought the two were different. The differences stated were primarily in the mindset and not in the roles they had within their business.
You are probably wondering why I am so surprised. I have worked in many environments throughout the 3 plus decades of my career including CPA firms, small businesses (of which I was an owner of one of them), higher education and as a solopreneur. I have found what the articles describe as the entrepreneurial mindset in each of these settings (maybe I was just fortunate). Because of that, I feel that mindset is just as important to persons in every environment (and is much of what is what I teach to kids). It is not limited to persons who might be defined as an entrepreneur but includes small business owners and even employees (also known as intrapreneurs).
Here is a summary of differences I found from the articles:
-Have big ideas, come up with new ideas and take a risk to see if their big ideas are even possible. They look for the next big thing.
-Love risk and take a risk to see if they can make their ideas work.
-Focus on the future of the company and let their team work on the now.
-Rarely want things to stay the as they are. They are looking to change things & develop things.
-Invent things, look to do things a different way. They focus on new, innovative offerings.
-Desire is to change the world.
-Prefer passion over profits.
-Develop, share and ready their company for market so they can move on to their next big idea.
Small Business Owners
-Solve a problem in their community, they know their business and target audience and know how to make them happy and serve their customers.
-Hold steady, they like to know what’s coming up next, they make calculated decisions where the outcome is clear.
-Have daily and weekly to do lists. They manage employees, work with customers, network with new customers and keep everything rolling.
-Are more likely to do something others are doing. They deal with known and established products & services.
-Want to make a living and often serve their community. Prefer profit over passion.
-Sentimental about their business, it’s part of their family, it’s their livelihood, retirement and reflection of their life.
What is my opinion on the difference between an entrepreneur and small business owner?
Even though the Forbes article, (“The Difference Between An Entrepreneur and A Small Business Owner” dated June 6, 2012) stated that there is very fine line between the two. I still think of entrepreneurs and small business owners as nearly the same. As I stated earlier, I have worked in many different environments where the entrepreneurial mindset has been apparent.
Here are some additional reasons why I believe they are same:
- The goal of an entrepreneur should be to create value for others. In my mind this includes creating jobs and strengthening the economy.
- A good small business owner is a visionary, they need to adapt to changes in our environment and economy and communicate that vision clearly to the employees so that the business can be successful and thrive.
- Doesn’t an entrepreneur need to know their target market and how to help their customers?
- The most successful entrepreneurs also know how to operate a business and have to do lists to help them stay focused!
So, I guess from my own personal definition, both an entrepreneur and a successful small business owner will have the entrepreneurial mindset of making a difference, providing value and helping change the world for the better.
I would love to hear your thoughts and opinion on this topic in the comments below!
Julie Ann Wood is the Chief Cultivator at Eseedling, LLC and the author of More Than a Lemonade Stand. Eseedling focuses on cultivating tomorrow’s entrepreneurs through a complete youth entrepreneurship experiential curriculum, teacher training, consulting, and youth entrepreneur camps. Learn more at eseedling.com