Are you a small business owner or an entrepreneur?

Over the years that I have been working with SMEs, I have become increasingly aware of the clear distinction between small business owners and entrepreneurs.  Indeed, they can even be placed along a continuum on a scatter chart together with tenderpreneurs and intrepreneurs.

Neither of them can be isolated in silos as each shares many of the other’s characteristics.  Some may have more of one trait than another.  It is also not that one is better than another; where a person appears on the chart is largely determined by what best suits their personality and circumstances.  The economy needs both.

In the concept map below, comparing the characteristics of a successful small business owner with those of a successful entrepreneur, it becomes clear that, to succeed, beyond their core competencies, both need an enabling environment and ‘technical skills’.  It is true that both can survive, even succeed, when the economic or political or social environment is not conducive to business success.

The successful small business

The better the understanding and application of business skills, like marketing management, the greater the effectiveness of the business.  It can be a great advantage to them both if they have the benefit of privilege; the enormous value of access to business advice and to rôle models cannot be overstated.  But the big distinguishing factor that gives the entrepreneur the edge is entrepreneurial spirit and all that this entails.

When faced with a problem in business, entrepreneurs intuitively look for a solution; small business owners get someone else to solve it.  When faced with a challenge, entrepreneurs naturally see an opportunity; small business owners, an obstacle.  When entrepreneurs see opportunity, they automatically take initiative.  Entrepreneurs persevere, pushing through difficult times, chewing on broken glass.

The diagram above is not final.  There are unanswered questions: Can Necessity be considered an ‘enabling’ condition for small business?  Does an entrepreneur necessarily have to be a visionary?  Are there any other important factors that haven’t been identified?

Research shows that many of the causes of small business success or failure can be traced back to fixable technical skills like selling solutions to meet customers’ needs and managing cash flow.   The fact that entrepreneurs tend to be less risk averse, open to exploring new options and more persevering when the going gets tough explains why they more often succeed in challenging situations.  This is a serious impediment for those small business owners who lack the entrepreneurial spirit.


first published in SME South Africa


Entrepreneurship is neither a job or a title. Entrepreneurship is an attitude. – York Zucchi

2016/11/01

CC BY-SA

Click here if you want to discuss what really makes an entrepreneur.

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