The difference between a small business owner and entrepreneur - Blog

The difference between a small business owner and entrepreneur

The difference between a small business owner and entrepreneur

Not all who build businesses are equal. Very often those who look to describe people with their own enterprise will use ‘entrepreneur’ and ‘small business owner’ interchangeably; however each phrase describes a different kind of person, and distinctive mind-sets about how they pursue their business.


Entrepreneurs embody constant change, small business owners embody constancy.


Small business owners are, in many countries, the largest employers in an economy – in Brazil, it is estimated that 96% of jobs are produced by small and medium enterprises. But not all small businesses are owned equally. A crucial difference between the small business owner and the entrepreneur is in how they imagine the future of their business. The small business owner looks to manage the growth of their enterprise stably. Their goals are community-focused – their vision of a successful business is one that is still around 10, 20, or 30 years from now. Entrepreneurs imagine their business’s growth in larger terms. They imagine, and work towards, having their operations grow beyond the local level. In order to achieve that kind of growth, the entrepreneur must never be comfortable with things remaining the same: the entrepreneur sees stagnation where the small business owner would see stability.


Entrepreneurs seek the new; small business owners use what already works.


Small business owners might be characterised by their enterprises being secure in the knowledge that what they are doing has been proven to work, and found their business on ensuring that they do that as well as possible. The entrepreneur, guided by the big dreams, knows that the success that they seek won’t be found by being one of the pack, will look to the new or novel as the selling point of their business. The small business owner sells their product to a market that already exists; the entrepreneur, if successful, will make a new market.


Small business owners see their business as a means to an end; entrepreneurs see business as an end in itself.


In an article for Forbes, small business owner Gene Marks succinctly writes of his rejecting the entrepreneur label, and taking pride in the smallness of his business: “I am not a risk taker.  I am not a dreamer.  When I make an investment in a new product or technology it’s one that I’m able to lose without feeling it.  My gambles are small.  I think small.  Therefore my returns are small.  I am a business owner.  I am a small business owner.  And I’m fine with that.”


The ability to stomach risk is a critical characteristic of the entrepreneur. Economic theory would describe many entrepreneurs as behaving as risk seekers – they gain pleasure in pursuing gambles with higher chances of failure, with larger rewards that come with that risk being the motivation they need to pursue those options. Small business owners would be better characterised as being risk averse. When faced with the choice between two options – a higher reward payoff that’s less likely, and a lower reward payoff that’s more likely – they will choose the safe option.


So – don’t judge a business person by the size of their enterprise. There is nothing ignoble in not wanting to create a global enterprise, nor in being uncomfortable with placing limits on your dreams. Small business owners and entrepreneurs are distinct, but invaluable to the modern market-place.