Comparison: Small Business Owners and Entrepreneurs

In the La Trobe GSM subject ‘Entrepreneurial Business Planning’, Kama Knudsen and I researched and presented and compared and contrasted the definitions of a Small Business Owner and an Entrepreneur.

Below is the summary of this research:

 

Defining The Small Business Owner

An individual who establishes, independently owns & manages a business for the purpose of furthering personal goals and agendas.

– Majority of time and resources consumed by business

– Not dominant in the field/industry

– No ongoing development of innovative practises

– Not actively &/or continuously seeking out new opportunities.

– Business strategy – price, quality & reputation.

– Business contacts developed on personal basis

– Limited delegation of authority &/or responsibility

– Status quo orientation

(Wagener, Gorgievski & Rijsdijk, 2010; Runyan, Droge, & Swinney, 2008; Carland, Hoy, Boutlon & Carland, 1984)

 

Defining The Entrepreneur

An individual who is innately driven to continuously & actively seek out opportunities to do things in new or innovative way, & also possesses the ability & capacity to act upon/exploit such opportunities.

– For the purpose of profit, growth &/or the collective benefit of society.

– Willingness to take on calculated personal or financial risk, & responsibility for success or failure.

– Able to cope & even thrive in face of the unknown.

– Resilience to withstand criticism and/or failure, learn from this & persevere with their vision.

– Openness towards new ideas, people, experiences & innovations

(Wagener et al, 2010; Cope, 2005; Thompson, 2004; Littunen, 2000; Cunningham & Lischeron, 1991; Carland et al, 1984)

 

Overlaps of Small Business Owner and Entrepreneur

– Individual’s time & resources consumed by venture

– Personal networking

– Seek independence/freedom/autonomy

– Following personal interest/passion

– Market Orientation

– Self Efficacy

This equals a Business Owner (Wagener et al, 2010)

 

Carland, J., Hoy, F., Boutlon, W. & Carland, J., 1984, ‘Differentiating entrepreneurs from Small Business Owners: A Conceptualization’, The Academy of Management Review, 9, 2, pp. 354-359

Cope, J., 2005, ‘Toward a Dynamic Learning Perspective of Entrepreneurship’, Entrepreneurship Theory and Practice, 29, 4, pp. 373–397

Cunningham, J & Lischeron, J., 1991, ‘Defining Entrepreneurship’, Journal of Small Business Management, 29, 1, pp. 45-61

Kuratko, D., Hornsby, J., Naffziger, D. & Montagno, R., 1993, ‘Implementing entrepreneurial thinking in established organizations’, S.A.M. Advanced Management Journal, 58, 1, pp. 28 -39

Littunen, H., 2000, ‘Entrepreneurship and the characteristics of the entrepreneurial personality’, International Journal of Entrepreneurial Behaviour & Research, 6, 6, pp. 295 – 310

Runyan, R., Droge, C., & Swinney, J., 2008, ‘Entrepreneurial Orientation versus Small Business Orientation: What Are Their Relationships to Firm Performance?’, Journal of Small Business Management, 46, 4, pp. 567-588

Thompson, J., 2004, ‘The facets of the entrepreneur: identifying entrepreneurial potential’, Management Decision, 42, 2, pp. 243 – 258

Wagener, S., Gorgievski, M. & Rijsdijk, S., 2010, ‘Businessman or host? Individual differences between entrepreneurs and small business owners in the hospitality industry’, The Service Industries Journal, 30, 9, pp.1513-1527