Are Small Businesses Examples of Entrepreneurships?

Running a business is one of the most hectic activities of any individual. The problem becomes more when one has to start from the bottom with a new business with a general aim of growth and earning a profit. Most of the times, business people tend to spend more time and resources on their businesses with the aim of reaping on their hard work after. Both small businesses and entrepreneurs are important not just to the individuals that start them but to the economic growth of a country. This is based on the fact that they lead to the creation of jobs thereby boosting the economy. They also ensure the provision of various key products and services to the communities which they serve (Spring, 2014). There are several types of businesses that most people can start. In this article, the focus is on small businesses and entrepreneurs. These two ventures exhibit various similarities which may lead people to think they are similar or that one is an example of another. However, they also exhibit various differences which may lead others to think they are different. Based on these similarities and differences, many have been prompted to classify small businesses as examples of entrepreneurs. On the basis of this controversy, it is important to look at these two forms of businesses analyzing their characteristics and nature in order to determine whether small businesses are or are not examples of entrepreneurs (Baumol, 1990). 

Chron (2016) suggests that small businesses and entrepreneurs are always started by individuals who want to create business opportunities with the principal aim of getting maximum returns. This is one of the most common and most important aims for most small business owners and entrepreneurs. The basic essence of doing business is always to make profits and so it is the major similarity between small business owners and entrepreneurs (Carland et al. 1984, Fernande, 2017). In most cases, small businesses and entrepreneurships are started by single individuals who seek to venture into a particular business. This, therefore, means that both these two businesses are small in nature and that they are started by a singular individual. However, entrepreneurships may not always be small in nature but the process of formation is similar to that of small businesses. According to Seth (2017), their aim is always to deliver products or services to their target markets. Being their nature to start small and grow with time, it can be argued that small businesses are examples of entrepreneurships. This is because small businesses have the ability to grow and become entrepreneurships in the future. As such, the thinking behind the formation of both small businesses and entrepreneurships are always similar in that they share these unique characteristics. The fact that these two business forms share these characteristics suggests that they may be similar to one another. 

Entrepreneurships are always formed based on a certain business model which they are to follow. Before the formation of an entrepreneurship, the entrepreneur always has a plan on how they will launch the business and the key strategies in which to grow it into a bigger business. This plan requires strategic planning which is based on the ability to either provide goods or services that are unique in the market. More often, these businesses create their new products thereby creating a demand for these new products. Small businesses also share some of these characteristics with entrepreneurships (Enterprising Oxford, 2017). Owners of small businesses always develop plans on how they are going to operate their businesses with an aim to make a profit. These plans are always backed by evidence of a gap in the market which the business seeks to fill. However, a small difference they have with entrepreneurships is that small businesses usually focus on businesses which are common while entrepreneurships focus on new businesses (Marks, 2012). Despite this slight difference, these two forms of the business exhibit a great deal of resemblance suggesting that small businesses may be examples of entrepreneurships. The fact that small businesses take after entrepreneurships in their formation and operations suggests this notion is true. Small businesses also have the ability to change to entrepreneurships. 

According to Bannock (2005), small businesses and entrepreneurs all are made with an aim to make profits. However, to be able to achieve these profits, they have to be appealing to the customers who have the power whether to purchase their products and services or not. In the case of small businesses, they are always small scale in nature therefore only dependent on a small fraction of the society in order to be able to make profits. For entrepreneurships on the other hand, their business size determines the number of customers needed in order to make the business profitable (Gartner, 1988). In most cases, entrepreneurships may be small startup businesses thereby requiring only a small number of customers to enable the business to gro. One common characteristic of both these businesses is the fact that they both treat their customers as the business’ greatest assets. Entrepreneurships treat their customers as their greatest asset based on the fact that these customers are the ones responsible for making the company grow (Christiansen, 2015). As such, they will want to groom them and offer them incentives to make them regular and loyal, customers. The same thing is similar to small businesses which must also learn to maintain their customers to have any guarantee of success. 

Small businesses and entrepreneurships are always started by persons with modest means with a dream to become successful. In both these cases, the business owners may not have adequate capital to cater for everything required for their startup. For most small businesses, they usually depend on owners’ capital and in some cases acquire loans and grants in order to fund their activities (Howorth, Tempest and Coupland, 2005). With these funds, they are able to start their operations with the aim of repaying the loans where necessary or acquiring revenue that will be able to cater for the business owner’s startup costs. Entrepreneurs, on the other hand, can also be funded by owners’ capital or in some cases grants and well-wishers. Entrepreneurships are usually riskier thereby making it difficult to acquire loans. This is mainly based on the fact that they are ventures mainly in unchartered waters which makes them highly risky. All these businesses therefore at one point depends on funds from outside to be able to fund their operations. This makes them similar in a way thereby making one an example of the other. 

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Despite these various similarities which suggest small businesses are an example of entrepreneurships, there are various differences between these two businesses that suggest otherwise. For example, entrepreneurships are usually established as a result of new ideas which an individual may think of and make a reality. The entrepreneur is always guided by their own unique ideas to venture into a business with the hope that that business will stand the test of time and grow into something big. They assume all risks and rewards related to this business and will do everything to make them succeed. For example, Mark Zuckerberg was the brains behind Facebook as he was able to turn it into a multibillion-dollar empire thanks to his unique ideas. Small businesses, on the other hand, are usually normal businesses started in an area where there is a gap in the delivery of certain goods or services (Johnson, 2017). For example, a small shopkeeper opening his stores in a small neighborhood where there are no such shops around. The idea of the shop is not original but it serves to satisfy a demand for the shop in that area. Looking at these differences, it would be difficult to link the two business models as one. These two are a unique business models which are not related or an example of one another. 

Another common difference between these two forms of businesses is the idea of risk-taking among them. Entrepreneurships are always the riskiest businesses one can venture into. This is based on the fact that they are usually based on new ideas into businesses that may not have been tried before. As such, it will require a level of faith and determination for one to start an entrepreneurship. Tapan (2001) suggests that these new ideas are usually based on either new technology or innovation about doing business in a certain way. In most cases, the business is done in an entirely different way from the common ways available. However, despite this high level of risk, the returns for most entrepreneurships are usually equally high (Moreno and Casillas, 2008). It is the promise of high returns that makes entrepreneurs be able to put all their financial security or career on them. Small businesses, on the other hand, are not riskier than entrepreneurships. This is mainly because small businesses are usually based on business concepts that have been proven successful before. The level of risk is therefore lowered as the small business owner will be venturing into something they have either learned about or been involved in themselves. These differences, therefore, shows the different nature of the two businesses. 

According to Moran (2016), another common difference that suggests these two businesses are not related is the fact that both these businesses all operate based on different principles with regards to the future. Entrepreneurs are usually started by individuals with a master plan on how they could grow their business either within a period of the first and fifth years after they start. Most entrepreneurships are usually future-oriented as the owners are usually looking at ways through which to grow and reach out to wider markets (Begley and Boyd, 2016). For most entrepreneurs, they prefer to employ people to manage their daily affairs while they focus more on the future of their companies. Entrepreneurships can afford to take losses in the short-run with the promise that their current efforts will pay huge in future. This is totally different from small entrepreneurs who are usually present-oriented. For most small business owners, their major focus is always to ensure their daily operations run smoothly and that their businesses achieve their daily targets. The small businesses, therefore, will be dependent on the daily earnings to help it grow. They may not be able to handle losses in the short run and that may lead to the business collapsing or becoming bankrupt. 

The nature of running of both small businesses and entrepreneurships are also usually very different making them unrelated. For example, small businesses are usually run by the individuals that started them. In most cases, these individuals are in charge of the daily decision-making within the business and are therefore solely responsible for how the organization grows. These businesses are usually small thereby only operated by a handful of employees who may be helping the business owner (Ács, Carlsson and Karlsson, 1999). On the other hand, entrepreneurships, once they have had a footing in their new business, tends to look for qualified personnel to help run it. The entrepreneur, therefore, will look for highly qualified personnel to handle various aspects of the business while they focus on the direction and growth of the business (Ribeiro-Soriano, 2017). Most entrepreneurs would even consider entering into partnerships with others in order to ensure the success of their company. They, therefore, will do anything to ensure the survival of their businesses, unlike small businesses who most often do not hire professionals thereby making its growth slow and unreliable. 

Looking at the arguments both for and against small businesses being examples of entrepreneurships it has become clear that these are two very distinct businesses. The similarities between small businesses and entrepreneurships suggest that these businesses may be similar in nature. This is based on the fact that they are all established with the same set of goals which both businesses seek to achieve. However, their differences emanate mainly from the way these two businesses are run (Quon-Lee, 2014).  Small businesses are generally small in nature and are usually run by their owners with a bid to make a profit which helps them sustain themselves and their families. Entrepreneurships, on the other hand, is established as a result of an innovation which usually has high prospects of success and the resulting success is usually high. Both this business assumes some level of risks but entrepreneurs have a higher risk and this translates to the high level of rewards it gives its owners. Looking at these differences, it is therefore clear that these two businesses are unrelated and that small business is not an example of entrepreneurship. The similarities they enjoy are a characteristic of all other business ventures thereby they cannot be used to bring about a connection between the two apart from the mere fact that they are all businesses.