You should have heard the term small firm proprietors and entrepreneurs, and many of us mostly use the interchangeable terms, but the fact of the matter is that while there are similarities between the two, there are also some distinctions. The word entrepreneur is being used around a lot these days, but just because you manage a small firm that does not make you an entrepreneur.
According to Birley (1996), an entrepreneur is “an individual who establishes and manages a business for the principal purpose of profit and growth. The entrepreneur is characterized principally by innovative and creative behavior and will employ strategic management practices in the business”. Thus, contemporary thinkers emphasize that an entrepreneur is a person who produces and recognizes opportunities for something unique, deals with the uncertainty and risk of that new venture which is not restricted to stand-alone business ventures and has the managerial competence to gather necessary resources from the capital without necessarily holding these resources, which encompasses an ability to make policy, to direct a team, and to network outside the venture (Timmons & Spinelli, 2004).
Small Firm Proprietors’ Meaning
A small firm proprietor is “an individual who establishes and manages a business for the principal purpose of furthering personal goals. The business must be the primary source of income and will consume the majority of the owner’s time and interest. The owner perceives the business as an extension of his or her personality, intricately bound with family needs and desires”(Birley 1996).
Entrepreneur vs Small Firm Proprietor
Following are the few differences between small firm proprietor and entrepreneur
Small firm proprietors have a remarkable idea:
Small firm proprietors solve an issue in their community. They recognize their business and target audience. They know what will make their clients pleased. They satisfy their customers.
Entrepreneurs always think big:
Entrepreneurs dream big. They think big. They come up with ideas that have not been tested, diagnosed, or worked through. Many times they do not even know if their ideas are conceivable, which makes them even more excited.
Small firm proprietors play safe:
Small firm proprietors like to know what is up for next and where it is arriving from. They make planned decisions where the consequence is certain. The outcome may not be big, but it will typically keep them moving forward. The
Entrepreneurs like to take risks:
Entrepreneurs step out on a perimeter more often than not. They jump in with both feet realizing that if they put in their full effort, the risk will be worth it more often than not.
Small firm proprietors think about the tasks they require to complete this week:
Small firm proprietors have every day and weekly to do lists. They manage employees, work with customers, network with new customers, and keep everything up to the mark.
Entrepreneurs usually focus on the future:
While the team of entrepreneurs is supposing about what they are working on that week, they incline to bypass the thoughts of now and concentrate on the future of the company. They have people to operate the business, and if they don’t, they soon will.
Small firms proprietors are passionate about their business.
The small firm proprietors never plan on selling or transferring their business off to someone else unless it is family. They like making decisions and operating the day-to-day.
Entrepreneurs focus on scaling:
They want to prosper and prosper as much as they will. Although they may not concentrate on selling the business, they set it up to run without them. They surround themselves with professionals while they end up being the rainmaker.
Some other differences between entrepreneurs and small firm proprietor
– Small Firm Proprietor
- The low tendency towards growth
- Inclination towards low-risk taking and low return activities
- Non-business concerns more important
- Less control-driver
- Inclines toward repetition of tried and authentic ways
- Skeptical of inspiration
- Works at smooth pace
- Hardly makes mistakes of fact : Works problems all the way through
- Patient with regular delays
- People-oriented, Aware of people’s feeling
- Trustful of others
- High propensity towards growth always looking for new possibilities.
- Inclination towards high-risk taking and high return on activities
- The business itself takes priority
- Powerful need for control an internal locus of control
- Wills to experiment with new approaches that is innovative.
- Does not take time for precision
- Driven by aspiration needs for achievement.
- Works with full of energy
- Often makes errors of fact; jump to conclusions
- Uneasy with normal details
- Task-oriented, oblivious to people’s feeling
- Uncertain of others
When it comes to choosing entrepreneurs and small firm proprietor, some people are more cut out to be small firm proprietors and others fall into the category of entrepreneur. But it is true that we require both of them. Not every organization expects to turn into the big success that entrepreneurs often have in their intellects. Some are better left small and that is often where they remain. Any country needs small firm proprietors to hold the economy and entrepreneurs to motivate it forward. One is not better than the other. But the question needs to be asked: What is your preferences a small firm proprietor or an entrepreneur?