What is Entrepreneurship and How is it Different from a Small Business?

You’ve heard entrepreneurship and you’re wondering what is it actually. You know that it is something that deals with business. Even if you know what is entrepreneurship, you’re wondering how is it different from a small business.
My friends, whatever your query is, I am here to answer. If you’ve got something to ask that I have not answered in this article, you can always ask that in the comment.
Entrepreneurship is an inherited word from France. There was no concrete definition of Entrepreneurship before the 20th century. Still we don’t have a concrete definition of entrepreneurship even today. But we have roughly around millions of definitions. Fortunately, the term is no more an obsolete term now. Almost all vaguely knows what does it mean.
Disclaimer: I have written the entire article based on an assumption that you’re an aspirant entrepreneur
Entrepreneurship means different things to different people. Whenever you heard of Entrepreneurship, you may think of people who are tech savvy and have startups in Silicon Valley. You may think that people who own a small shop are entrepreneurs. But at its core, it is a mindset — a way of thinking and acting. It is about imagining new ways to solve problems and create value.
What Is Entrepreneurship And How Is It Different From A Small Business?
Wikipedia says that Entrepreneurship is the process of designing, launching and running a new business, which begins as a small business, such as a startup company, offering a product, process or service for sale or hire. The people who create these businesses are ‘entrepreneurs’.
Economist Robert Reich has called
  • Team-building
  • Leadership
  • Management ability
are essential qualities for the entrepreneur.
Many people think that entrepreneurship and running a small business are same things. But it’s not. They two are very same and yet very different. Tweet!
We can say that all entrepreneurial ventures are a small business at some point of time. But we cannot say that all small business are entrepreneurial ventures. Out of 28 million small business in the US, 22 million are run by individuals who do not have anyone on payroll. Tweet!. This contradicts the “team building” quality of entrepreneurship.
Apart from these, many of these small businesses offer an existing product, process or service, and they do not aim at growth. You can consider a family-run grocery store near you as a small business. They don’t want to expand and they’re happy if the profit from the store as long as it pays their bills.
In contrast, entrepreneurial ventures offer an innovative product, process or service, and the entrepreneur aims to grow the company by adding
  • employees
  • seeking international sales
  • and so on
a process which venture capital and angel investments finances. Successful entrepreneurs lead a business in a positive direction by proper planning, to adapt to changing environments and understand their own strengths and weakness.
Amazon.com is an entrepreneurial venture. It was launched as a small business with few dozen employees and now a billion dollar organization.
Entrepreneurship also works on uncertainty which means that entrepreneurs don’t know whether they’re going to succeed or not.
Knight classified three types of uncertainty:
  • Risk, which is measurable statistically (such as the probability of drawing a red color ball from a jar containing 5 red balls and 5 white balls)
  • Ambiguity, which is hard to measure statistically (such as the probability of drawing a red ball from a jar containing 5 red balls but an unknown number of white balls)
  • True uncertainty or Knightian uncertainty, which is impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose contents are entirely unknown).

Entrepreneurship is the third one, the True Uncertainty. You know that you’re going to do something but you don’t know whether you’ll succeed or not.

People who are interested in entrepreneurship have conducted thousands of surveys to see how to predict the success of an entrepreneur or an entrepreneurial organization.
Some of the methods are:
  • You should have well-established strategies for the start-up. This includes growth and survival strategies.Growth strategies include the strategies to expand. Survival strategies include the strategies to survive in always changing market.
  • You should always hire correct talent. You always must know that you’re hiring the right person for the right position. A person who has 10 years plus experience on e-commerce industry suits better for the executive team rather than being in the development team
  • What unique is your start-up offering that others don’t? This is called as Unique Selling Proposition and without this, you cannot succeed. All your marketing campaigns will revolve around this. This can be anything like free shipping.

Our unique selling proposition is that all articles in I Innovate magazine will be written by entrepreneurs. This ensures that our content are written by someone who has gone through the entrepreneurial phase and ink their learnings.

  • Your start-up can be B2B or B2C. Both kinds of business are very different from one another. In B2B, you’re targeting executives of a company and in B2C you’re targeting the world. You must know which one are you and target your potential customers accordingly.
  • You’re not going to be a millionaire if the potential buyers are the only handful. You must enter the market where there are enough number of buyers such that your company can grow and sustain.
  • No company has a perfect market plan. There’ll always be some kind of market that is untapped or untouched. You need to find that market and target it. If you cannot find it, create it like Steve Jobs did with iPhone in 2007.
  • Your industry should be a growing industry. A very good example of dying industry is publishing industry. As tablets and mobiles are getting more and more popular, people are preferring to read magazines on their phones. There’s a visible decrease in the sales print magazines.
  • You must have a well-equipped team such that the workload is divided. Putting all the tasks on one’s head will simply frustrate that person.
  • While hiring the team, make sure that you hire the people from the same industry. If you’re a software developer company, you better hire people who belong to IT industry.
  • Research showed that the people who have entrepreneurial mindset perform better than conservative managers who like to make low-risk decisions so that they don’t get any blame if they are wrongTweet!
  • If you’re new and low on budget, you may want to outsource most of the thing but even if you’re slightly good on a budget, hire people on full time. Full-time employees perform better than freelancers for the company. This is because they feel a sense of belongingness.
  • Your team must be motivated by achieving goals, not by having more salary. Although, salary will always pay a very crucial role in their performance.
  • Diversified teams perform better.

Now you have earned a Ph.D. in entrepreneurship. Time for you to grab the below offer.

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