The role of entrepreneur has been much celebrated in the last two decades. The media uses the term frequently in most business-related discussions. As a result, the title has been claimed by and bestowed upon a number of people and professions. Entrepreneurs are attributed great powers and believed to be the solution to job creation.
At the risk of dating myself — haven’t we previously applied these same attributes to our local small businessperson? Most of the business community is composed of small businesses that have operated here for decades, many of them family-run.
If you accept the premise that a significant difference exists, it follows that the training, incentives, and assistance that we offer these two archetypes would also be different. This affects the curriculum of educational institutions, the inducements offered by economic development agencies, and programs implemented by government entities.
Think of the small businessperson-entrepreneur traits as a continuum with each individual sharing various proportions of the attributes about to be described. The specific examples designate an extreme case at each end of this continuum.
I have participated in a number of discussions debating what it means to be a small businessperson or an entrepreneur. Some of the discussions drifted to “why do we care?” I will address the second topic before diving into the first. Future discussions will change the perspective from that of the individual to the characteristics of the companies they create. We will also identify resources appropriate for those that venture into the small businessperson-entrepreneur continuum.
For now, let’s start with a few examples adapted from Melanie Spring, chief inspiration officer of Sisarina, a D.C.-based branding firm (sisarina.com).
Small businesspeople have a great idea. They solve problems in their community and know their business and target audience. They know what makes their customers happy and provide outstanding service.
Entrepreneurs have big ideas. They dream and think big. They come up with ideas that haven’t been tested, diagnosed, or worked through. They often don’t even know if their ideas are possible, which gets them even more excited. They are also more likely to move onto a different venture once the idea is realized or determined to be not big enough.
Small businesspeople are risk-averse. They like to know what the next thing is and where it will come from. They make calculated decisions where the outcome is clear. The result may not be huge, but it will typically keep them moving forward.
Entrepreneurs embrace risk. They are not risk seekers although they are willing to step out on a ledge. They jump in with both feet knowing that if they put in their full effort, the risk will be worth it more often than not.
Small businesspeople focus on current challenges. They have daily and weekly to-do lists. They manage employees, work with customers, network with new customers, and keep everything rocking and rolling.
Entrepreneurs dream ahead six months. While their team is thinking about what they’re doing that week, they tend to skip the “now” and focus on the future of the company. They have people to manage the business — and if they don’t, they should.
Small businesspeople are sentimental with their businesses. They seldom plan on selling or handing their business off to someone else unless it’s family. They like making the decisions and running the day-to-day. They also see their business as part of the community.
Entrepreneurs focus on scaling. They view their venture as an asset they want to grow with growth embedded in the culture. The exit or harvest is part of the thought process to satisfy their investors and enable the entrepreneur to move on to the next venture. The forward thinkers set it up to run without them. They surround themselves with experts while they perform the role of rainmaker.
The Small Business Administration reports that 99.7 percent of all firms in the U.S. with paid employees are small businesses. Small businesspeople operate these firms that are the bedrock of our economy. Consider entrepreneurs to be accelerators in this process. Both types of business operators are essential to our economic system.
Some additional contrasts:
Entrepreneurs are restless and seldom content with the status quo. They are change agents with characteristics more aligned with artists. Small businesspeople are managers favoring a more predictable environment and enjoy making a profit. They focus on operational efficiency — controlling costs and maximizing customer satisfaction.
Small businesspeople may inherit their business from a family member. Alternately, they may transition, voluntarily or involuntarily, from being an employee to starting a similar business using their domain-specific skills. The business is created out of necessity to make a living, attain greater independence, or increase income. Entrepreneurs generally start a business because they are restless or desire to change the world. They are driven by passion and opportunity.
Entrepreneurs accept the risk that the venture, often operating with negative cash flow, may fail. Small businesspeople are less concerned about failure since their business is profitable. They feel more pressure from ever-increasing competition.
Read More: upstatebusinessjournal.com