Young: Small business vs. entrepreneurship: Is there a difference?
Entrepreneurship is a phenomena that has dominated public attention quite a bit over the past two decades.
The glamour entrepreneurship has attracted is due to a number of reasons.
This week, I will strive to present some differences that are often overlooked and thus contribute to the repeated misunderstanding and misinterpretation of entrepreneurism.
First, the crisis of the large corporation which appeared to be governed by managers/bureaucrats and the contemporary discovery of the entrepreneurially-based small business.
Decisive in shaping the view of entrepreneurship in the public imagination is that typically great and prominent entrepreneurs have characterized the absolutely huge restructuring process of the 1990s.
People from all walks of life, from every nook and cranny of the corporate world and education community, acknowledge that entrepreneurship is, not the” sleeping giant” of economic progress, but the “tower of economic foundation-building” that can alter the socio-economic landscape of regions and countries.
Especially important as well is that “real” entrepreneurs have been able to ride the great wave off innovation and creativity that is so paramount in industries such as electronics and information technologies, which in turn has brought our world into an era of true globalization.
In Canada, entrepreneurship seems so central to the wealth and competitiveness of a region, a province and our country that there is a tendency to attempt to codify it for both instructional and industrial policies.
What I find so unbelievably significant is that across North America alone, to say nothing of the remainder of the world, hundreds of universities, colleges and municipal centres are dedicated to the realm of entrepreneurship and all its precepts.
Entrepreneurship appears in different sizes as it were—it can be found in large corporations as well as in small retail shops.
It can present itself in various forms. You may discover it as a motivating force behind a science bench and the old-time peddler who is particularly able as an innovative salesperson or the highly-educated manager of a large corporation who understands the meaning of intrapreneurship and the passion that can be created by operating entrepreneurially from within an organization.
And I love the imagery of what pushes the impetuous, instinctive type of person who is able to anticipate demand as solving a particular problem in the marketplace and builds an economic empire from out of that fulfillment.
But I want to take a step back for a moment and offer a brief explanation of entrepreneurship versus small business because I often find my passion for entrepreneurship may cloud the way for others to see the relationship between these two elements of economic pursuit.
Many people use the terms entrepreneur and small business owner synonymously. While they may have much in common, there are significant differences between the entrepreneurial venture and starting a small business.
Let me draw your attention to how entrepreneurial ventures differ from small business:
• Amount of wealth creation—rather than simply generating an income stream that replaces traditional employment, a successful entrepreneurial venture creates substantial wealth
• Speed of wealth creation—while a successful small business can generate considerable profit over a lifetime, entrepreneurial wealth creation often is rapid
• Risk—the risk of an entrepreneurial venture must always be considered high, otherwise, with the incentive of sure profits many entrepreneurs would be pursuing the idea and the opportunity no longer would exist
• Innovation and creativity—this element to me is the most critical difference, as entrepreneurship often involves much more of these ingredients than what any small business might or can exhibit.
To go one step further, this sense of innovation and creativity gives the entrepreneurial venture the competitive advantage that results in the aspect of rapid wealth creation.
The innovation then can be the product or service itself or the business processes utilized to deliver it to the market.
In other words folks, a great litmus test for a difference between entrepreneurship and small business is the capacity to create something new.
Remember the “looking at the world the same as everyone else but thinking and behaving differently” phrase I have written about in past columns—entrepreneurs are change agents.
They thrive on disequilibrium. They are meant to bring to our world, the socio-economic progress that truly benefits our existence.
Oops…maybe I am sounding a little professorial and prophetic, but from my heart it truly is a miscue to lump entrepreneurs and small business into the same “job jar” and allow ourselves to believe that small business issues, for example, are one and the same as those of the entrepreneurial world. The time has come, once again, for us to celebrate, highlight and most of all champion the role of the entrepreneur in our regional and provincial landscape.
The entrepreneur is not going anywhere. They are here to stay and committed to making our world more enjoyable, fruitful and progressive.