Is Your Business Small Or Entrepreneurial?
April 21, 2022
Many small business owners say they have an entrepreneurial business and many entrepreneurial owners say they have a small business. If this sounds a bit confusing, it can be since the phrase small business owner and entrepreneurial business owner are frequently used interchangeably. There is a difference, however, that should be noted.
A small business is...
A well-accepted definition of a small business is a business that is independently owned and operated, organized for profit, and not dominant in its field. The number of employees can vary from none to 500 (generally in the U.S. 500 or fewer employees is considered to be a small business). In many international countries, revenue figures are also used to categorize a business as micro, very small, small, or medium-sized enterprise. While some might think that all small businesses have very few employees, low sales, and little profit, small businesses can certainly have a high number of employees, a high volume of sales, and be highly profitable.
An entrepreneurial business is...
In contrast to a small business, an entrepreneurial business can be described as not just doing something better but doing something different. So, can a well-established business be entrepreneurial, or does this description only apply to a new, startup business? If being entrepreneurial means doing something different than the competition, certainly a well-established small business or SME can be entrepreneurial. Being entrepreneurial is not reserved strictly for new businesses; however, a new business can definitely be entrepreneurial.
A few examples...
(1) A new restaurant owned by two partners opens in a suburb. Small? Most likely based on the number of employees. Entrepreneurial? Probably not even though menu items might be somewhat different than other restaurants. The actual operation of ordering, food delivered to tables, etc. remains essentially the same.
(2) On the other hand, was McDonald’s entrepreneurial when it first got started? Well, McDonald’s was certainly small at the start (not now) and very entrepreneurial. Rather than being simply another “hamburger stand,” McDonald’s put an entrepreneurial twist on the entire operation by doing something quite different. It standardized the hamburger and designed a new work flow process...fast food.
(3) Heard of Apple? Who hasn’t? Apple I, iMac, MacBook, iPod, iPad, and, oh yes, the iPhone just to name a few of the multitude of unique products Apple has brought to the worldwide marketplace. Rather than just improving on current products to make them better, Apple continues to be innovative and entrepreneurial. It’s famous founder, Steve Jobs, once said, “Innovation distinguishes between a leader and a follower.” Apple is definitely not small but continues to be entrepreneurial.
Small business and an entrepreneurial twist
Small businesses and SMEs need to be innovative and differentiate their businesses from the competition. Owners and managers should consider how to put an entrepreneurial twist on their current business not only to become better than the competition but different from the competition. Will every business trying to become different become another McDonald’s or Apple? Of course not, but forward movement produces success. Rather than trying to outperform the competition with equivalent products or services, being entrepreneurial is what might be needed to beat the competition...being the leader and not the follower.
We might all agree that Henry Ford, the founder of Ford Motor Company, was an entrepreneur. One of his more famous quotes is, “If I had asked people what they wanted, they would have said faster horses.”
Small and/or entrepreneurial
· A business may start small and remain small without being or becoming entrepreneurial, or
· A business may start small and then evolve into an entrepreneurial venture by thinking differently about its products or services, or
· A business might be both small and entrepreneurial at the start of its business.
Regardless of the size or type of business, an entrepreneurial twist can give a boost to sales and profits.