Small business management and entrepreneurship are both different terms. Sometimes people might confuse one for another.
How is small business management different from entrepreneurship? Entrepreneurship is the concept of starting and owning a business venture, taking all the potential risks and substantial profits. In comparison, Management is a team of employees who manages an existing business. Managers don’t bear any risk of the company. In simple terms, entrepreneurs are business owners while managers are employees.
Let’s have a closer look at the differences between small business management and entrepreneurship.
What is Entrepreneurship and Small Business Management?
Most Americans dream of becoming entrepreneurs due to being their own boss and making big money, but some are confused about entrepreneurship.
Entrepreneurship is the process of creating a startup by taking financial risks to get a profit. Entrepreneurs focus on innovation and creativity when starting a business venture. They bring value to the market by solving people needs.
Entrepreneurs are rewarded with financial freedom when their business have success.
Examples of famous entrepreneurs include Mark Zuckerberg, Elon Musk, Jeff Bezos, and Bill Gates.
Small Business Management
A manager is someone responsible for managing and administering a group of people or department in an organisation. A manager must have some of the same qualities as an entrepreneur, like leadership and accountability.
Entrepreneurship vs Small Business Management
|Entrepreneurship||Small Business Management|
|Entrepreneurs are owners||Managers are employees|
|An entrepreneur is visionary and takes all financial risks||Managers work for salary and do not have to take any risks|
|Focuses on starting and owning businesses||Manage ongoing business|
|The key Motivation for an entrepreneur is financial freedom||Managers motivation comes from the power that comes with their position|
|Entrepreneurs get profits as rewards||Mangers get salary as a reward|
|An entrepreneur can be casual and informal||Managers are very formal in every aspect of the business|
|Entrepreneurs set goals||Management relies on the goals set by the entrepreneur|
|Makes his/her own decisions||Needs to take permission from business owners before taking a huge decision|
|Entrepreneurs are innovators||Managers are executors|
Can a Manager Be a Successful Entrepreneur?
Anyone can be a successful entrepreneur. It doesn’t matter if you’re a manager, engineer, architect or even a doctor. You just need to be willing to do what entrepreneurs do.
An entrepreneur is someone creative and a critical thinker.
Entrepreneurs have a burning desire to be successful at what they do. They take high risk in life and business. They don’t have any guarantees their business will succeed or not, but they try it anyway. They consider failure as a way of learning.
Warren Buffett, one of the world richest entrepreneur, actually came from a very humble beginning. He might be flying in private jets and running a successful company now, but he built his success from the ground up. Warren Buffet was a newspaper delivery boy.
Another well-known example who started from the ground is Amazon founder Jeff Bozos. He came from a long way from his summer job flipping burgers at McDonald’s. It was there he learned about business.
More such examples prove that your job/career doesn’t determine your success as an entrepreneur, such as David Geffen, who started as a mailroom clerk, and Giorgio Armani, who was a Photographer’s assistant.
The conclusion is if you’re willing to take risks and have a burning desire for success, then you can be a successful entrepreneur even if you’re a manager.
What Management Skills do Entrepreneurs Need?
Management skills are essential for entrepreneurs.
The Management skills that you need as an entrepreneur are:
- Financial Management:
Setting up and budgeting is the most basic financial skill you need as an entrepreneur.
You will need to have a good brain for dealing with complex analysis and modelling and a good grasp of financial systems and procedures.
Having this financial skill will help you to run your business profitably and protect your financial investment.
- Marketing, Sales, and Customer service:
Marketing and sales play a significant role in business success. Marketing skills are important to promote your product/service. People will be not aware of your product or service without proper marketing.
Nowadays, most people prefer digital marketing over traditional marketing as digital marketing has excellent ROI (Return on Investment).
- Communication and Negotiations:
You will need to communicate and negotiate with your potential investors, suppliers, customers and employees. Having effective verbal and written communication will strengthen your relationship with your colleagues. Communication reflects your personality.
If you’re going to employ people, then leadership will be a critical skill. You must able to motivate your staff to get the most out of them. You need to make them enthusiastic about the work as much as you are for your business.
- Project Management and Planning:
One of the important skill you will need as an entrepreneur is project management and planning. Your business might need a website, and you will need to manage it. You will need to have a brand plan for your business. This skill will help you organise your business and grow.
You will face many problems in your entrepreneurial journey which means you will have to make good decisions during this journey. And, having problem-solving skill will enable you to make good decisions.
How Can I Become a Entrepreneur?
Many of us want to become entrepreneurs. Starting a business is one of the biggest dreams of our times.
To be an entrepreneur means to become an expert in the things that make life difficult for people.
Every proper business aim is to fix things for other people.
You need to be consistently looking at the world and identify what problems people face. Once you identify the problem, then you need to sell the solution to the people.
The bigger and more original the problem is, the more successful your business can be.
If you want to make millions with your business, then there is one rule to follow, that is ‘impact millions, earn millions’. Meaning your solution must be big enough to impact millions of people so you can earn millions.
If you think all the big problems of the world are already solved, you need to open your eyes to the opportunities as there are still many problems to be solved. If one opportunity is closed, then the other will eventually show up. You just need to be extra alert to see these opportunities.
Some of the opportunities can be found in internet forums, Facebook groups, and Reddit. People here complain about their life and problems. You need to keep an eye for their pain points and turn those pain points/problems into business if you think it can change the world.
Inside of every problem lies an opportunity.Robert Kiyosaki
You can also look for these opportunities in the local community, gym, parks etc. Look out for what people are talking about and think if you can solve it.
One crucial thing new entrepreneurs need to know is they need to have the skill of personal finance. Best entrepreneurs are those who know where their money is going. If you’re careless with your money, then you will become rich but not wealthy.
Wealth and richness are two different concepts. Richness is measured in dollars. Wealth is measured in time. If you have $1 million, you will be rich, but if you spend $100k a month, then you will be wealthy for ten months only. Wealth is how much time you can live without working.
If you want financial freedom as an entrepreneur, then you need to spend your money wisely.