In the business world, entrepreneurship vs small business ownership are used interchangeably by many people, which isn’t exactly accurate, as the terms don’t mean the same thing.
If you’re planning to delve into the business world, understanding the pros and cons of each side of the entrepreneurship vs small business debate is mandatory.
With no further ado, here are the pros and cons of Entrepreneurship vs Small Business Ownership.
Entrepreneurship vs Small Business: Entrepreneurship
Simply put, an entrepreneur is someone who, despite having limited resources, starts and operates a new business or startup while assuming all responsibility and risks. What’s unique about entrepreneurs is that they usually begin their ventures out of passion and passion rather than profits, which is why they don’t think about uncalculated risks when they’re starting out.
Typically, entrepreneurs start businesses that revolve around a new service or products rather than an existing one, which is why entrepreneurship involves a lot of risks and uncertainty. In other words, they invest their time, expertise, and money in something that’s not guaranteed. That said, if successful, such a business model can provide a high return-on-investment.
It’s worth noting that, as opposed to what many people believe, entrepreneurs delve into new ventures with a plan. Also, not all entrepreneurial ventures are revolutionary inventions, as most work on a mix-and-match approach, where they target specific pain points within a particular niche or industry.
- High ROI
- Rapid growth
- Proactive innovation
- Entrepreneurs are passionate
- Great responsibility
- High, unknown risks
- Involves a lot of elbow grease
Entrepreneurship vs Small Business: Small Business Ownership
Entrepreneurs and small business owners are pretty similar in what they do, but there are some fine differences that distinguish the two.
A small business is one that’s run and managed by a single individual or a few of them. As opposed to entrepreneurs, small businesses usually deal with well-known, established services or products. They basically mimic what entrepreneurs do after their ventures prove to be successful. So, the main difference between an entrepreneur and a small business owner is that the first assumes unknown risks, while the latter deals with known risks.
Furthermore, while entrepreneurs aim at getting rapid growth and high returns, small business owners target limited growth with continued, somehow-guaranteed profitability. That’s why entrepreneurial ventures usually impact economics significantly, especially when it comes to creating new jobs.
- Total control over the business’s direction
- Established products and services
- Known and calculated risks
- Continued profitability
- Limited growth
- Small market share
- Reactive innovation
Entrepreneurship vs Small Business: Which Is Better?
There isn’t really a right choice and a wrong one when it comes to the Entrepreneurship vs Small Business debate. Both entrepreneurs and SB owners are self-employed, independent, and have control over their ventures.
As a general rule of thumb, if you’re passionate about something and really want to change the world through it, you ought to become an entrepreneur. On the other hand, if you’re looking for financial independence along with continued profitability, then the small business route would be the best for you.