The concept of entrepreneurship has a wide range of definitions and its meaning has progressed throughout the century. For many, it is related to starting a personal business. However, almost all economists believe that it is more than just starting a business.
The word entrepreneur comes from the French word undertake, which means ‘begin at’. In a business perspective, it means starting a business. Entrepreneur can also refer to a person who systematizes and manages a business and usually takes risk for the sake of profit or turnover. He can also be defined as a person with a high propensity, a pioneer in change or anyone who wants to work on their own.
Entrepreneurship vs. Small business
The terms “entrepreneur” and “small business” are quite similar and can often be used interchangeably. However, with much in common, there are significant differences between the entrepreneurial company and the small business.
The entrepreneurial company is quite different from the small business in the following aspects:
- Innovation – This is the very instrument of entrepreneurship. Provides resources with a new power to create wealth. Entrepreneurship often involves extensive innovation beyond what a small business could exhibit.
- Risk – Risk should be generally high in a business venture. If not, with the lure of sure profits, many entrepreneurs would be following the trail and the opportunity would no longer exist.
- Amount of wealth creation – A booming business venture generates substantial wealth, typically in excess of several million dollars in profit, rather than simply generating an income stream that replaces steady employment.
- speed of wealth creation – A successful small business can generate large profits throughout its life. But for an entrepreneur, wealth creation is often fast and quick, say within 5 years. In addition, the types of businesses in which they are engaged is what basically differentiates the activities of entrepreneurs. Innovation is the key. Every entrepreneur must rely heavily on this. Innovation can be emphasized in the following:
- new organization
- new products
- New markets
- new production methods
When such innovation produces new demand, wealth is created. From this point of view, one can simply describe the role of the entrepreneur as one of inventively merging a variety of factors to create value for the customer. He expects this value to exceed the cost of input factors, thereby generating higher returns on investment.
Therefore, the main differences between entrepreneurship and small business is that the entrepreneur takes a risk and starts with the intention of making immediate and hopefully massive profits, while the small business usually starts smaller, with less risk and the income and success accumulate. time under very controlled planning.