Entrepreneurship & Small Business is an essential element to our economy. It stimulates economic growth, and works toward eliminating poverty. In a free enterprise economic system, there are incentives for entrepreneurial activity. Entrepreneurship and small businesses is the key to market creativity. A businesses profit motivation is to search for a distinctive profitable niche.
Entrepreneurship is especially difficult under inflationary conditions. Because of the uncertainty created by inflation it makes planning more problematic. And because inflation causes income for tax purposes to be exaggerated.
A small business plays a crucial role in the rapidly-changing modern industrialized society. Small businesses with its inherent advantages of flexibility and adaptability. Will be at the cutting edge of these new improvements.
The world is changing. And the role of the individual has become increasingly more important. Individual entrepreneurship and small business ownership is absolutely necessary for financial success.
This springs especially true for Black America. The Congressional Black Caucus (CBC) highlighted the impact of Black entrepreneurs and small business owners in America. And the important role of enhancing the small business landscape for minority entrepreneurs.
A recent statistical analysis of U.S. census data. Shows that whites are more likely than Asians, African-Americans and Latinos. To be self-employed in high prestige, lucrative industries.
There is a long tradition of academic research. That explores the experiences and strategies. Of the self-employed, entrepreneurs and small businesses according to their ethnicity. As they strive to integrate economically into mainstream U.S. and Global society.
I am a lifestyle entrepreneur. Who owns a small business that creates multiple streams of income. Who happens to be a black American woman. I serve as an information liaison. Specifically for those interested in entrepreneurship and small business opportunities. One of my personal passions.
For those who don’t know the central characteristic of the lifestyle entrepreneur. It is the attempt to create profit from personal passion.
My decision to pursue entrepreneurship & small business ownership. Is rooted in the actuality that I am not just a business woman, but I am indeed a business. That is passionate about several matters while recommending products and services within those niche topics. Where shoppers can buy online or offline.
In this article, as you read further I pray you are inspired. To pursue entrepreneurship and start a small business. To understand the “why”. We will explore small business vs entrepreneurship and the difference between the two.
What Is Entrepreneurship?
Entrepreneurship can broadly be defined as the creation or extraction of value. With this definition, entrepreneurship is viewed as change. Which may include other values than simply economic ones. Entrepreneurship is the process of discovering new ways of combining resources.
Some more narrow definitions have described entrepreneurship. As the process of designing, launching and running a new business. Which is often a small business. It is the “capacity and willingness to develop, organize and manage a business venture. Along with any of its risks to make a profit.” The people who create these businesses are often referred to as entrepreneurs.
The Four Types of Entrepreneurship
It turns out that there are four distinct types of entrepreneurial organizations. Small businesses, scalable startups, large companies and social entrepreneurs. They all engage in entrepreneurship.
What is Social Entrepreneurship?
The concept of social entrepreneurship. The general public raises awareness of the importance of this type of business. Social entrepreneurship is the attempt to draw upon business techniques. To find solutions to social problems. This concept may be applied to a range of organizations. With different sizes, aims, and beliefs. Conservative entrepreneurs measure performance in profit and return, but not social entrepreneurs.
Who is an Entrepreneur ?
An entrepreneur is an individual who starts and runs a business. With limited resources and planning. and handles all the risks and rewards of his or her business venture. The business idea usually encompasses a new product or service. Rather than an existing business model.Some entrepreneurs would rather use a reputable business model.
An entrepreneur is also an entity which has the ability to find and act upon opportunities. To translate inventions or technologies into products and services.
The entrepreneur is willing to risk his or her financial security and career. Spending time as well as capital on an uncertain venture. Arranging for the necessary capital, raw materials, manufacturing locations and skilled employees. Marketing, sales and distribution are other important aspects. In which the entrepreneur controls.
Entrepreneurs are individuals who undertake the organization of a new business. And the risks and rewards that come with it.
All entrepreneurs are searching for a sustainable business model. Regardless of the type,
entrepreneurs have common characteristics: resilient, agile, tenacious and passionate.
An entrepreneur’s differences include the level tolerance of personal risk. The size and scale of their vision. And their personal financial goals.
Successful entrepreneurs are seen as a driving force in the modern economy. They are never satisfied with the status quo. Entrepreneurs are practical. Many of the entrepreneurs I know prefer passion over profits.
What is a Small Business?
The definition of a small business is an owned and operated company. That is limited in size and in revenue depending on the industry.
Small businesses are owned corporations, partnerships, or sole proprietorships. That has fewer employees and/or less annual revenue. Than a regular-sized business or corporation. Businesses that are defined as “small” are able to apply for government support. And qualify for preferential tax policy. That varies depending on the country and industry.
Small businesses in many nations. Include service or retail operations such as convenience stores. Small grocery stores, bakeries or delicatessens. Hairdressers or tradespeople (e.g., carpenters, electricians, plumbers). Restaurants, guest houses, photographers, very small-scale manufacturing, and Internet-related businesses. Such as web design and computer programming.
Some professionals operate as small businesses. For example lawyers, accountants, dentists, and medical doctors. Although these professionals can also work for large organizations or companies.
Small businesses vary a great deal in size, revenues, and regulatory authorization. Both within a country and from country to country. Some small businesses, such as a home accounting business may only need a business license. But other small businesses, such as daycares. Retirement homes, and restaurants serving liquor are more regulated. And may need inspections and certifications from various government authorities.
The concepts of small business, self-employment, entrepreneurship, and startup. Overlap to a certain degree but also carry important distinctions. These four concepts often combine things with each other.
Below are the key differences of these concepts in summary:
Self-employment: an organization created with the primary intention to give a job. To the creators, i.e. sole proprietor operations.
Entrepreneurship: all new organizations.
Startup: a temporary new organization. Created with the intention to be bigger (at least have employees).
Small business: an organization that is small with few employees. And may or may not have the intention to be bigger.
Many small businesses are sole proprietor operations. Consisting only of the owner. But small businesses can also have a small number of extra employees. Some small businesses that offer an existing product, process or service, do not have growth as their primary goal.
Self-employment provides work for the creator or the business. Entrepreneurship refers to all new businesses. Including self-employment and businesses that never intend to grow big or become registered. But startups refer to new businesses that intend to grow beyond the founders. To one day having employees, and growing big.
Many small businesses can be started at a low cost and on a part-time basis. While a person continues a regular job with an employer or provides care for family members in the home.
In developing countries, many small businesses are sole-proprietor operations. Such as selling products at a market stand or preparing hot food to sell on the street, that provides a small income.
In the 2000s, a small business also became well suited to Internet marketing. It serves specialized niches. Something that would have been more difficult before the Internet revolution. Which began in the late 1990s. Internet marketing gives small businesses the ability to market with smaller budgets.
Adapting to change is crucial in business and particularly small business. Not tied to the administrative sluggishness associated with large corporations. Small businesses can respond to the changing marketplace demand more. Small business proprietors tend to be in closer personal contact. With their customers and clients than large corporations. Small business owners usually see their customers in person each week.
One study showed that small local businesses. Are better for a local economy than the introduction of new chain stores. By opening up new national level chain stores. The profits of owned small businesses in the community decrease.
And many businesses end up failing and having to close. This creates an exponential effect. When one store closes, people lose their jobs. Other businesses lose business from the failed business, and so on. Often, large firms displace as many jobs as they create.
Independence is another advantage of owning a small business. A small business owner does not have to report to a supervisor or manager. Too, many people desire to make their own decisions. Take their own risks, and reap the rewards of their efforts.
Small business owners have the flexibility and freedom to make their own decisions. Within the limitations enforced by economic and other environmental factors. But, entrepreneurs have to work for very long hours. And they understand their customers are their bosses.
Entrepreneurship is at the heart of every business. Every large company started out as a small business, led by an entrepreneur. As our economy becomes more eruptive. Having the skills and knowledge to start a new business may mean the difference between prosperity and poverty.
Small Businesses vs. Entrepreneurship
There is a fine line between being a small business (SB) owner and an entrepreneur. As I’ve stated the roles actually have a lot in common—but there are distinct differences that set them apart.
Small businesses usually deal with known and established products and services. While entrepreneurial ventures focus on new, innovative offerings. Because of this, small business owners tend to deal with known risks and entrepreneurs face unknown risks.
Are You a Small-Business Owner or an Entrepreneur?
The Difference Is Important.
There’s confusion between the terms Small-Business Owner and Entrepreneur. Both can have small businesses. But they have different styles of leadership and thoughts on running their business. One is not better than the other, they’re just different.
Small-business owners have a great idea.
They solve a problem in their community. They know their business and target audience.
They know what will make their customers happy. They serve their customers.
Entrepreneurs have big ideas.
They dream big. They think big. They come up with ideas that haven’t been tested, diagnosed, or worked through. A lot of times they don’t even know if their ideas are possible, which gets them even more excited.
Small-business owners hold steady.
They like to know what’s coming next and where it’s coming 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 love risk.
They step out on a ledge more often than not. 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-business owners think about the things they need to finish this week.
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 are thinking 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 soon will.
Small-business owners are sentimental with their businesses.
They never plan on selling or handling their business off to someone else unless it’s family. They like making the decisions and running the day-to-day.
Entrepreneurs focus on scaling.
They want to grow and grow. Although they may not focus on selling the business, they set it up to run without them. They surround themselves with experts while they end up being the rainmaker.
America needs small-business owners to hold the economy. And entrepreneurs to drive it forward. One isn’t better than the other. We’re simply making a living. And there’s nothing wrong with that.
The reason you should consider Entrepreneurship and Small Businesses. Is because it has the ability to improve your standard of living. As well as create wealth for the self-employed. Entrepreneurs, and small business owners and their related businesses. But also for the ordinary person looking for systems to increase their income.
What are your thoughts on small business vs entrepreneurship? Leave your thoughts in the comment section.