Is there a distinction between an entrepreneur and a small business owner? This question was posed by a student in an Entrepreneurship Development class. It obviously needs careful consideration and understanding.
In trying to figure out the distinction between the two, it became quite clear that there is just a thin line between the two.
There have been several definitions as to who an entrepreneur is. But to simply put, an entrepreneur is an individual who accepts financial risks and undertakes new financial ventures.
Typical characteristics of an entrepreneur include spontaneous creativity, ability and willingness to make decisions in the absence of solid data and a generally risk-taking personality. Entrepreneurs are driven by the need to create something new or build something tangible.
Ebenezer Asare-Boadu, a Business Consultant in Accra, said a small business sometimes called a micro business, on the other hand, is any business that is independently owned and operated.
He stated that “small business owners are not dominant in their field and do not engage in many new and innovative practices.”
He said an entrepreneur on the other hand is someone who loves challenges. A person, who can think of an idea and profit from it almost instantly.
Sometimes there is an element of risk involved, but this only inspires an entrepreneur.
However, he noted: “every entrepreneur is a business owner because all of them start as a small business, but their ability and determination to grow their business is what makes them successful entrepreneurs.”
Growth is the ultimate aim for every entrepreneur, and Mr. Asare-Boadu notes that entrepreneurs are driven by passion, which helps them succeed in every venture they undertake.
“An entrepreneur thrives on the principal objective of growth and wealth creation. Thus, the business is characterized by innovative practices and products,” he added.
Small business owners sometimes may never grow large, and the owners may not want it. This is because they usually prefer a more relaxed and less aggressive approach to running the business.
Faustina Acquah, a roasted plantain seller at East Legon, said she has never thought of ever expanding her business because she feels content with how the business is being run.
Madam Faustina is one of several small business owners engaged in this kind of trade who do not see the need to further grow and make their businesses bigger.
One would be quick to point out that there would be no use expanding a roasted plantain business. But that is not so true.
If Madam Faustina has the typical entrepreneurial trait, it will definitely be possible for her to open a little eatery where she would sell her roasted plantain with its accompanying groundnut and probably a soft drink to go with it.
If this is done well people would come to know and accept the place for its specialty, and this can generate more income depending on how well it is managed.
This is clearly a business area that is yet to be explored even though it has a ready market and a lot of capital can be generated from it. But most women in this trade, do not see the essence in growing such a business because they would rather manage their business in a “normal way”, expecting “normal sales”, and forget about growth.
Mr. Asare-Boadu was of the opinion that small business owners usually start a business which is low risk, low reward and try to build on it. “They like to play it safer than an entrepreneur would.”
Entrepreneurs would like to be involved in ventures, which would be considered high risk and high reward.
He said even though entrepreneurs come in different sizes with regards to how their businesses have grown, they all place much emphasis on adding significant value to whatever venture they are undertaking.
“An entrepreneur focuses on pursing business in an area that people have not ventured into, and make strides.”
He emphasized that even though some people are born entrepreneurs they have distinctive traits which distinguish them from small business owners.
He indicated that “they are hard working, very tolerant and see failure as a stepping stone to success. An entrepreneur can start a business today, fail and will still go ahead to set up another one. Because he believes that when he fails he learns his lesson and builds on those lessons.”
He added that entrepreneurs are also often viewed as very innovative. That is they are people who like to put their ideas into valuable action. Innovation, he noted, is what makes entrepreneurs different from everyone else.
“At the end of the eight-hour day, when everyone else leaves for home, the entrepreneur will often continue to work into the evening, developing new business ideas.”
A dominant characteristic of entrepreneurs is their compelling need to do their own thing in their own way.
Samuel Fiakpui, Managing Director of SG Foods Limited, also indicated that entrepreneurs are sometimes said to be domineering.
“Because of the nature of the economic situations in and around the world one needs to be aggressive and forceful in order to survive and succeed. And by doing so, they tend to work under intense pressure and may be perceived as domineering. Rather I see entrepreneurs as being assertive.”
He stated that successful entrepreneurs can comprehend complex situations that may include planning, making strategic decisions, and working on multiple business ideas simultaneously.
Some view them as hard working since they often have to do the extra work at the office. Those entrepreneurs, who may not be able to afford a support staff to cover all business functions, end up working long hours to get the work done. This often achieves good results, as they tend to succeed.
Whether you see yourself as an entrepreneur or a small business owner, you should always be on the look out for other business opportunities and make the best out of it.