The concept of entrepreneurship was first established in 1700s and since then has attracted the attention of many soft science disciplines. Entrepreneurial companies are recognised to have a significant influence on economic growth and development by enhancing competition and generating the majority of employment opportunities and innovations. Founders of such businesses, called entrepreneurs, are often equated with small business owners, but many people argue that owning a business does not make one an entrepreneur and (s)he will not necessarily exhibit entrepreneurial characteristics.
Small Business Owners:
Small business owners are those individuals who establish and manage their business with a purpose to further their personal goals. They usually perceive their business as a primary source of income and an extension of themselves. In other words, a small business owner is either a person who creates one’s own business in order to earn money and has no desire for significant growth, or a person who takes over someone else’s existing company. They usually have no desire to become dominant in the field they are operating in and are not interested in neither innovative practices nor marketing. These include owners of small convenience stores and online businesses, or self-employed people such as hairdressers or tradesmen.
Entrepreneurs, on the other hand, establish and manage new businesses with a focus on growth and profits, and are prepared to do whatever it takes in order to achieve it. Most commonly, entrepreneurship is regarded as a process of discovery, evaluation and exploitation of opportunities to create innovative and valuable goods regardless of the resources controlled. These people prefer surrounding themselves with experts and setting up such types of businesses that can run without them. These may be poorly-adjusted individuals, who need to create their own environment as their personality makes it difficult for them to function/adjust properly when working for someone else.
Entrepreneurs are always buzzing with ideas and tend to show a high level of market orientation by constantly searching for new market opportunities. In other words, business creation, innovation, growth and size achievement are heavily linked with entrepreneurship. Best known people that fit this description include Bill Gates, Steve Jobs and Barbara Ann Corcoran.
Both, entrepreneurs and small business owners, share the need for independence, sense of achievement, internal locus of control, ability to live with uncertainty and take risks. However, many researchers found that even though these characteristics are common, entrepreneurs do exhibit them on a much greater level, because they operate in much more uncertain and risky environments. Entrepreneurship is all about autonomy and the need to be one’s own boss even if it offers less financial benefits than other alternatives, while small business owners expect to make a decent living from the businesses they manage, and if not, they might choose another alternative.
The most frequently recognised characteristics of entrepreneurs are their opportunistic and innovative nature and exceptional self-confidence. New venture creators tend to seek and notice opportunities to make money where others normally see problems. They find it easy to develop new ideas and concepts, spot opportunities and combine the resources or ideas together.
Such opportunistic streak makes entrepreneurs easily bored by the routines and controls, which motivates them to keep looking for new opportunities even if they already have established something of their own.
Another distinctive, and probably the main characteristic of entrepreneurs, is innovativeness. They do come up with ideas that have never been tested and diagnosed before. Some people may even say that entrepreneurs create valuable goods and services from absolutely nothing.
Entrepreneurs also were found to possess a high level of self-efficacy, the belief in their capability of performing the tasks successfully. This leads them to being overly confident, sometimes even delusional.
They have a clear vision of the type of business they want to build, which includes images of fame, personal wealth and growth. They are highly proactive, self-motivated, and creative — they innovate by exploiting the value of ideas and creating innovative goods or services in their imagination. They also nearly always find a way to bring these ideas and imagines into reality.
Entrepreneurs genuinely love their jobs and they are extremely passionate about what they do. This passion allows them to face all obstacles and overcome extreme uncertainty and resource shortages. It also allows them to possess more leadership competencies than others, which is necessary in order to obtain growth and profits.
Can small business owners become entrepreneurs? Some argue what you have to be born an entrepreneur. Others say that although some of the entrepreneurial personality traits are inherited, others, such as opportunity recognision, can be trained if so desired.
Can regular people, those who are content in their 9–5 job, become entrepreneurs? I really doubt it, as they probably would never want to, but I will leave this for discussion.