I’d be willing to bet anything that if you’re a small business owner whose business operates partially or fully through the internet, you’ve often been called an entrepreneur. Maybe even a small business entrepreneur.
In fact, I’ll take it a step farther, and say that you’ve probably referred to yourself as an entrepreneur on more than one occasion.
The confusion of these terms (small business and entrepreneur) began with the advent of the internet and the subsequent boom of online businesses, which are in some ways easier to get off the ground than traditional, localized businesses.
This blurred the lines between these two business types.
The internet brought with it new kinds of businesses, created new situations for traditional businesses, and gave rise to new business models, tactics, working hours, and (remote) work environments that have now replaced what we once knew as “strictly business.”
Although many people now tend to use the term “entrepreneur” as a blanket term for both entrepreneurs and small business owners, these terms are not exactly the same, and each approach requires different skill sets, talents, and daily operations.
While the two are not entirely disconnected or alien to one another, there’s a lot to learn by comparing these two distinct approaches to business.
As a small business owner, you can learn a lot from entrepreneurs and greatly improve your company by adopting some tactics and strategies from the entrepreneurial playbook. In this tutorial, discover how to run your small business more like an entrepreneurial venture.
Related Business Tutorials
First have a look at related small business material here on Envato Tuts+. For the differences between an entrepreneur and a freelancer, have a look the article below.
For a definition of a small business and a guide on how to run a healthy small business, check out the following links:
Small BusinessWhat Is a Small Business? And Why the Size Definition Matters
PlanningHow to Run a Healthy Small Business—With a Monthly Review Checklist
Before moving on to learning how to run a small business like a successful entrepreneur, let’s first establish the differences between entrepreneurs and business owners, and look at the various ways in which the two traditionally approach the business of doing business.
Entrepreneur Versus Business Owner: What’s the Difference?
1. The Set-Up
Before it became hip and sexy to call anyone engaging in business (especially online business) an entrepreneur, we could easily point to one main difference between entrepreneurs and business owner: business owners, as the name suggests, owned their businesses (usually for life), while entrepreneurs set up businesses with the intention to sell them, holding onto them only for a brief period of time.
Entrepreneurs have also traditionally funded their business not with their own money, as most small business owners do (even if that money is a bank loan in their name), but by using venture capital they raised from investors that were interested in the business idea the entrepreneur conceived.
Learn more about funding your small business:
FundingHow to Get a Small Business Loan (Simple Funding Guide)
FinanceFunding a Business From Your Own Pocket
2. Risks and Finances
Both entrepreneurs and business owners will at some point need to take financial risks to grow their businesses, but traditional business owners tend to show greater reluctance in taking big risks.
Small business owners start their businesses small and grow them slowly as needed through steady work. That’s because the end goal of a business owner is to build a business that’s profitable enough to provide his living and stable enough to last him a lifetime.
Entrepreneurs, on the contrary, set up bigger businesses to begin with and look to grow them quickly by taking greater risks to do so. That’s because an entrepreneur’s end goal is to sell the business as quickly as possible at the highest valuation possible. And that means growing a large business with great profit potential to attract potential buyers.
3. Hiring Process
An entrepreneur hires strategically and quickly so as to fill the main positions in their company. The entrepreneurial hiring process seeks to make the business run smoothly and effectively without the hands-on involvement of the owner at every level.
A business owner, by contrast, takes a different view to personnel hiring, usually being slower with bringing on new hires. Most business owners tend to be the key expert in their businesses, building new positions around their needs and weaknesses. Thus, traditional business often can’t operate in the business owner’s absence for long stretches of time.
4. Market Audit
Since entrepreneurs start businesses specifically to fill a need they have identified in the market (and not necessarily because of a passion they might have for a particular product or cause), they learn to evaluate the market and its needs at frequent intervals. If what they’re building doesn’t seem to fit the market, they’re quick to pivot and adapt their idea to fill the holes.
Business owners on the contrary usually go into an area of business that interests them or they think can be profitable. This means that after their original market research and the creation of their business plan, they don’t often look at how the market is shifting and changing around them. Business owners tend to follow a specific business plan without much deviation or adaptation along the way.
5. Success and Failure
No one likes to fail. But ask anyone who has succeeded in anything in life and he or she is likely to point to failures as the learning ground for success. What differs between entrepreneurs and business owners is what each of them defines as failure and success.
For an entrepreneur success means building a business that’s easy to sell to someone else for high profit. A business that’s not highly lucrative, even if relatively profitable, can count as a failure and be terminated altogether without much thought by an entrepreneur.
For business owners, the game is much different. A business that’s profitable and stable, even if not wildly lucrative, is the golden ticket to success for small business owners. On the contrary, a more profitable business that may die out in a span of few years (by which point the entrepreneur would have sold it off) can drain small business owners of the savings of a lifetime and end their business careers.
What Small Business Owners Can Learn From Entrepreneurs
As you can see being a small business owner is entirely different from being an entrepreneur, and the difference goes far deeper than just terminology. Everything from the goals to the plans and aspirations of these two business professionals point in different directions.
But that’s not to say that one cannot learn or benefit from the other. In fact, there are a number of things that you can learn from entrepreneurial practices, strategies, and mindsets that will help you improve your small business quickly and efficiently.
So let’s dig in!
1. Work On Your Business
It’s often said that entrepreneurs work on their businesses while business owners work in their businesses. And that can be true.
The difference arises from the different set up each professional takes to the business as mentioned above. But if you’re constantly working in your business, you’ll never be able to work on your business to grow it or improve it.
So how can you get someone to work on your business? By hiring the right people that will take on some of your responsibilities and free your precious time to take a step back from your daily tasks and operations and look at the larger picture of your business. Learn more about how to do that:
2. Hire for Growth, Not Just Need
Being more averse to financial risks, business owners are slower to bring new hires into the company. Which isn’t bad in and of itself.
But often business owners will delay hires too long and only bring a new person in when the other people in the company can’t cope with the work any more. This can hurt your company, not only because it lowers the morale of your overworked employees, but also because it offers no opportunity for growth.
Not every new hire should come in to pick up the extra slack. When entrepreneurs hire new people, they look for the right experts that will take matters into their own hands (rather than wait to be directed) and help grow their business more quickly.
You’d be wise to follow the same policy for the key positions of your company. Don’t just look for hires to put out fires, but seek out people who can help you improve your overall structure.
3. Keep a Finger on the Market
Your small business is dedicated to offering a specific product or service to an interested clientele according to your business plan. That’s great.
But that doesn’t mean that you should close your eyes to the evolving needs and shifts of the market. Entrepreneurs are constantly on the lookout for new opportunities in the market, and though you don’t have to pursue innovation with the same determination, you should keep a closer eye on it.
Case in point: Blockbuster. Far from a small business, the rental-movie mega-business closed down because it refused to accept and acknowledge the major shift that was taking place in the movie rental industry. Sticking to their guns (and their DVDs) for too long, they lost all their business to the online movie providers that happily came it to take their place.
And that’s to say that no matter how big a business may be, it cannot withstand market shifts when it refuses to shift with them. So follow the market closely and audit your offers frequently: is your business still current with the market?
Small BusinessHow to Write a Competitive Analysis for Your Small Business (With Template)
Small BusinessCompetitive Analysis: How to Find Out Who’s Buying From Your Competitors
4. Keep on Learning
Because entrepreneurs build businesses to fill market needs, they often start businesses in industries they know little about. But they don’t remain ignorant; they educate themselves on the subject and learn all they can about the industry in order to make their business a success.
Small business owners tend to already know a lot about the industry they go into, or else learn a lot about it over the first few years of running their business. And then they stop. Not because they’re lazy, but because of the sense of security they get from knowing their business well.
Confidence in your business is great, but don’t let it grow into know-it-all arrogance that keeps you from constantly learning and evolving. When was the last time you learned something new about your industry or invested in your professional development? If the answer is “a long time ago,” then it’s time to take action.
Find an online course, a workshop, or a local seminar you can attend and enroll in it today. Try to learn something new at least once a quarter to keep yourself growing as a professional and to keep your business growing, too.
5. Grow Your Network
Entrepreneurs love networking. In fact, they often attend events and conferences just so they can network. Meeting new people means learning about or creating new opportunities. And one can never know where the next investor or business venture may come from.
Business owners have a lot to gain from networking and making new connections as well. When you attend an event or conference, you may meet someone from a related field who has an idea for a partnership, you may meet an expert who can help you grow your business, or you may even meet people who can refer new clients to your business.
Networking shouldn’t always have a specific end-goal, as you can never know who you’re going to meet next. But growing your network of professional contacts can always benefit your company. Learn more about small business networking:
6. Keep Up With Technology
Technology changes daily. And entrepreneurs play a big role in these developments as they’re often the ones behind the businesses that promote these innovations.
For a business owner, it’s no longer possible to keep up with every new application, platform, or tool that comes out on the market. But you should at least keep an eye out for new technological advancements in your industry and the ways they can help you run your business.
Whether it’s a new accounting software, productivity apps, team communication tools, or something more specific to your industry, make sure you do a monthly survey of technological innovations to keep yourself up to speed. Here are some helpful apps to consider working with:
Productivity15 Business Productivity Apps to Work Better + Save Time
Small BusinessThe Best Online Accounting Software for Your Small Business
And don’t just look around for the sake of looking. Implement. When you see something new that can help your business, put it to work.
To go back to our example from above, let me just repeat one word again: Blockbuster. This mega business failed because it failed to keep up with the major technological advances that were happening in the home-viewing video industry.
7. Face Failure
Entrepreneurs not only have a bigger appetite for risk than business owners, but they can also stomach failure better. Successful entrepreneurs might see two, three, four (or more) business ventures fail before building that one golden business they’ll sell for crazy profit. But that never deters them from their goal.
Business owners tend to have a greater fear of failure and act with greater reservation when making business decisions. And that’s great—as long as it’s not keeping you from growing your business simply because you fear failure.
Often, it’s not the actual failure that takes a business down, but the disappointment and discouragement that business owner feels as a consequence of it. Disappointment and discouragement can prevent you from taking more risks out of fear.
It’s better to accept early on that in order to achieve something better and bigger than what you currently have, you’ll have to learn a few new things from a couple of failed attempts. Take a deep breath and dare to try even if you fail. Remember that success comes from failure.
8. Take Calculated Risks
This goes parse and parcel with learning to face failure with a straight face. In order to fail at something you first need to try. And trying something new can seem (and be) risky in business.
As a business owner, you won’t want to take as many risks as an entrepreneur, but if you want your business to grow, you’re going to have to learn to take a few calculated and well-thought out risks. Because it’s the risks that bring on the rewards as well.
9. Act as if You’re Going to Sell
Business owners rarely think of selling their businesses. They’re in the long-term game of running a business and not in the short-term entrepreneurial game of setting up business in order to sell them.
But thinking like an entrepreneur every now and again and looking at your business as if you’re going to sell it, can give you a new perspective that will help you improve your company.
Are your processes efficient? Are all your procedures clear and easy to understand? If a prospective buyer were to take a look at your business today, would its structure and functionality make sense? How do you set and measure success?
Looking at your company the way an outsider would evaluate its worth, can help you improve the overall structure of your company and clean up inefficient processes and procedures that you may now have in place.
How Can You Act More Like an Entrepreneur in Your Small Business?
Being an entrepreneur is very different from being a business owner and each role requires a different set of skills and talents. But that doesn’t mean that one business person cannot learn from the other.
As a small business owner, you don’t want to run your company exactly like an entrepreneur. But your business can greatly benefit if you learn to copy a few moves from the entrepreneurial playbook that you can apply to your small business. Learn more strategies to becoming a successful small business owner:
In what way do you run your small business as an entrepreneur? What are some ways you can improve your business by taking a more entrepreneurial outlook to it?