The question we are trying to address is “Is an entrepreneur any different from a small business owner?” To differentiate entrepreneurs from small business owners, we must analyze and define the meaning of these terms. We must also compare the characteristics of the two to find similarities and differences.
With the study of entrepreneurship being relatively new, the definition of an entrepreneur is not set in stone, as people and online resources have developed their own definitions. The dictionary describes an entrepreneur as “a person who organizes and manages any enterprise, especially a business, usually with considerable risk”. Using this definition, we can classify a small business owner as an entrepreneur, as any individual is taking risks when owning and running a business. However, with only one trait of the entrepreneur's personality and behavioral patterns taken into account, this definition is not detailed enough, making its credibility invalid for the comparison to a small business owner.
One characteristic attributed to entrepreneurs is risk-taking, as an element of risk must be taken with the introduction of new ideas and practices. This risk arises because the assurance of success is not guaranteed for innovative ideas, which is seen from the fact that after four years, 33% of businesses fail1. Mill (1848), one of the first to bring the term entrepreneur to general use, believed that risk-taking was the key distinguishing factor between business owners and entrepreneurs. He claimed that managers, especially in small, family run businesses, aim to secure and stabilize their business whilst entrepreneurs aim to take risks to take opportunities and maintain the quick growth in their business ventures. (Academy of Management, 1984)
However, Schumpeter (1934), who was the first to introduce the field of entrepreneurship as a separate topic of study, claimed that risk-taking was not the key factor of entrepreneurs, as taking risks is a...
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