When you tell people what it is you do for a living, what do you say to them? Some people may call themselves small business owners, their own bosses, sole proprietors or entrepreneurs. The range of descriptions is almost as wide as the number of businesses you may come across in your everyday travels.
Semantically, the delineation between a “small business owner” and an “entrepreneur” might be a sticking point or a source of tension for many people in the business world. When looking for advice, support, financial products, advertising services, or even a response on the tab of your Facebook Page that lists what category you belong to, the outcomes and responses that you get when classifying yourself as one or the other of these types of businessperson can be significantly different.According to the 2015 Small Business Pulse Survey by insurance provider and financial services group The Hartford, business owners say there is a difference — and they don’t all want to be called the same thing. The Hartford surveyed 751 owners, partners and principals of small companies (fewer than 100 employees) and discovered that 51 percent call themselves “small business owners” and 18 percent call themselves “entrepreneurs.”
Are all entrepreneurs small business owners? Are all business owners entrepreneurs? Is it better to be one than the other? Certainly not, in all cases. Stereotypes abound: the entrepreneur as a risk-happy tech visionary with plans for the next decade, the small business as a mom and pop shop just trying to make the day to day happen with consistency and predictability. The major difference here lies not in a judgement of better or worse business acumen on the part of one or other of these character types, but in the kinds of goals and needs that tend to be ascribed to each. What makes a successful entrepreneur may not make a long-lasting small business: however, both styles of business ownership have things to learn from each other, and there are commonalities that tie them together.
Especially amid the rise of the hyper-profitable and quickly sold web startup, it is important to distinguish the entrepreneur and the small business from a financial perspective. Stereotypically speaking, entrepreneurial ventures tend to exhibit make or-break volatility in the early going. Small businesses, however, must contend with the very same volatility on a different scale. Small missed payments, minor late shipments, unexpected slowdowns in sales, or changes in certain customer or supplier relationships: these may be dismissed as bumps in the road, but they are in fact highly significant in a world where, as opposed to the entrepreneurial death knell of poor risk management, cash flow management is often the most critical factor for success.