Small business ownership and entrepreneurship are two business terms often regarded as synonymous. Interestingly, there is in fact a huge difference between these two. In summary, small business provides little growth and few opportunities for its owners and employees because it is not really designed for expansion. On the other hand, entrepreneurship always has growth potential, and with fast growth comes more income and more wealth.
More specifically, there are three things that differentiate small business from entrepreneurial venture, and they are innovation, risk and wealth creation. As far as innovation is concerned, it is the backbone of entrepreneurship, giving the enterprise capabilities and resources to create wealth. Entrepreneurs are said to be more innovative, perhaps even addicted to it, than small business owners who are usually settled with marketing the usual stuff produced from the kitchen, home office or garage.
Entrepreneurship involves more risks. Entrepreneurs take up risks that are unusually high for most if not all small business owners. High risks fuel the passion of entrepreneurship, and when combined with opportunities of huge profits, entrepreneurs take the road less travelled. Increasingly, as more and more entrepreneurs trail the same business idea, the risks become low, opportunities of huge profits diminish, and entrepreneurs would again seek out another venture that presents opportunities for enormous and fast wealth creation.
Wealth creation in entrepreneurship is quick and substantial. This difference with small business is perhaps the most apparent. With the lack of growth potential, the wealth creation ability of a small business remains small and limited, if not utterly slow. Entrepreneurial venture, with the substantial risks involved, offers plenty of opportunities to accumulate massive wealth and at great speeds. Income generated from entrepreneurship is considerably larger than what can be generated from small business or what it required to replace employment salary.
Unlike small business that is generally patterned after tried and tested home businesses, entrepreneurship is about new products, new processes, new markets, and new organisations. Entrepreneurs are notorious for locating un-served niche markets, no matter how unprofitable they may seem. Markets under the poverty line are often ignored by business owners, but to entrepreneurs, they are great sources of substantial wealth. By combining innovation, specialisation and collaborative effort, the enterprise becomes empowered to produce world-class products made affordable and available to markets in the bottom of the pyramid.
Innovation too is influential enough to create new demand. From this standpoint, there is little need for entrepreneurship to invest heavily on advertising. On the contrary, it is not surprising for products of entrepreneurial venture to gain wide recognition, and their quality and value are enough for customers to spread the word to the rest of the markets thereby providing the enterprise free yet powerful advertising.