There are areas where small business and entrepreneurship cross over, but there are other areas where they diverge. If you are going into business for yourself, or if you already own a small business, it’s important to know where you stand on this topic.
Put simply, virtually every entrepreneur starts as a small business owner. However, true entrepreneurs don’t stay there. But don’t misread me: There is nothing wrong with having the goal of simply owning and operating a successful small business in your community.
For example, over the years I’ve met several people who dreamed of owning a local bookstore, probably combined with a coffee shop, where the locals could go to find literary gems and enjoy one another’s company. A place like that would be a great institution in a local community.
However, the entrepreneur would be exploring ways to take that model further. In this case, small business and entrepreneurship are linked by an initial concept, but they diverge in purpose. The non-entrepreneur owner is pursuing a lifestyle and the ability to provide a service he or she thinks is important.
The entrepreneur looks at the bookstore-coffee shop as something that people need almost everywhere and therefore works hard to find ways to scale up. The small business owner works hard to perfect the single location. Operating a single location is the main job for the local small business owner; finding, nurturing and exploiting funding sources for growth is probably the main job for the entrepreneur.
Risks and rewards
We can also look at small business and entrepreneurship in light of risks and rewards. It’s easy to conclude that the financial risks and potential rewards are far greater for the entrepreneur. The small business owner takes a smaller risk but certainly doesn’t eliminate risk. In fact, you could say that depending on one local business is “putting all your eggs in one basket.” If your local business flounders, that’s it.
While a total failure for the entrepreneur would be far more costly, after a certain period of growth, the entrepreneur could absorb some isolated downturns and still be in a position to continue operations.
For the small business owner, there may be lifestyle rewards that are especially appealing. Being an important and involved member of a close community can be a wonderfully rewarding experience. It could be the family lifestyle that a couple would prefer.
Small business and entrepreneurship ideas
There’s another interesting cross over between small business and entrepreneurship. Typically, an individual will start a small business around an area of personal interest, experience, or expertise. Let’s use a pet shop for an example. An expert topical fish hobbyist might open a local store.
This is also true for many entrepreneurs. They take their expertise/passion and set out to build an empire rather than a local business. I think that many of the entrepreneurial tech leaders today are passionate about the place of technology in society. Mark Zuckerberg would be included in this group.
However, there are also entrepreneurs who are passionate about building businesses and the specific area of any one business doesn’t matter so much. They recognize opportunities within business sectors and that excites them. I think Warren Buffet clearly fits into this category.
So, what’s your vision? What’s your passion? Is it the specific commercial area of your business—or the business you plan to start—and you want to develop it so it provides a good standard of living? Or, do you see yourself as more open to risk and want to project your vision further?
When you know these things about yourself you’ll understand where you belong in the continuum of small business and entrepreneurship.