Entrepreneur or small business owner? Which one are you? Are you both? Apparently they are not the same thing.
Reading Rose Powell’s article on StartUp Smart, on the 2013 Amway Global Entrepreneur Report I wasn’t surprised to discover that 84% of Australians surveyed had a positive sentiment towards entrepreneurship. This is 14% higher than the international average.
What did raise an eyebrow was in the same article, Professor John Breen said he suspected these high rates were due to the positive perceptions of entrepreneurship over small business. He said: “a lot of research into attitudes to small business finds Australians view it as hard work. The emphasis on the word ‘small’ seems to imply you’re on your own and it’s going to be tough.” The report also found that 62% of Australians say independence and being your own boss was the attraction in pursuing entrepreneurship. But isn’t that small business? Don’t people go into small business to work for themselves? And yes, running a small business can be hard and lonely work. But isn’t that the same for entrepreneurs?
We tend to equate the term entrepreneur with dotcom revolutions (in the United States particularly) but at their core isn’t an entrepreneur someone who’s had an idea, started a business and worn the risk?
I didn’t have to look far to find that the distinction between small business owner and entrepreneur is a very common discussion in the business world. The main differences are articulated as follows:
- The small business owner wants to make a living; an entrepreneur wants to create change.
- The small business owner’s strategy is based on making more sales; the entrepreneur wants to create value.
- The entrepreneur envisions a multi-million dollar company; the small business owner sees the business as providing a comfortable lifestyle.
- The entrepreneur works long hours and takes risks in the positive belief they will be successful often at the expense of their personal life. The small business owner is more conservative, with their goal to provide a better quality of life for them and their family.
- Small businesses are often self-funded via savings or credit cards, while the entrepreneur often needs funding beyond their own resources, from venture capital, for example.
During the federal election, Amanda Gome, the Publisher of BRW and Smart Investor wrote a piece for BRW titled “The one word missing from the election campaign: Entrepreneur.” She made the point that the major parties were both talking up the importance of small business, but wrote that the entrepreneur does not sit easily in the small business basket.
While acknowledging the contribution small business makes to the economy, Ms Gome says this sector is not where job creation occurs. She called on the major parties, when planning for jobs and growth, to focus on entrepreneurs as the drivers of innovation and investment.
Earlier this year I wrote about some of the government funding available to small business, but Ms. Gome says that entrepreneurs outgrow government funding programs too quickly, and therefore government should create policy settings that specifically promote entrepreneurial success. What do you think? Does the government do enough to support entrepreneurs? And what are you? Entrepreneur or small business owner?