Are you an entrepreneur or a small business owner? Everyone these days is an entrepreneur. It became a hot catchphrase that it is not fashionable not to be one. Basically anyone with any form of business whether it is home based or online define themselves as entrepreneurs. What is the root cause of this phenomenon? Startups and small businesses have always existed but was not associated with entrepreneurship the way we see it today. After the financial crisis of 08, governments shifted their focus on small business to carry the weight of unemployment. Such focus needed a fresh cover, something to make starting a business more fashionable. Small business initiatives started to pop up everywhere from government backed financing all the way to members organisations. Such initiatives did have an impact in driving new business creation, but did it create entrepreneurs? If business owners dont grow their business to a size that impacts the economy and provides jobs, they remain as business owners, not entrepreneurs. The Economist in their Schumpeter column argues that entrepreneurship is about upsetting and disorganising the existing way of doing things and all about innovation and ambition to turn small businesses into big ones. This is clearly a dynamic definition with a trajectory. Harvard Business Review also added that entrepreneurship is the creation of value by growing, or scaling, an enterprise. Entrepreneurs Organisation (EO), which I am a part of, loosely defines entrepreneurship as any business owner or founder of a business with an annual turnover of $1 million in order to become a member. This threshold does filter out some small business owners, but doesnt clearly define entrepreneurship. The U.S. Small Business Administration takes a more general albeit confusing definition of entrepreneurship as a person who organizes and manages a business undertaking, assuming the risk for the sake of profit. My problem with this definition is that it automatically turns all business owners, including those with a food stall in farmers markets as entrepreneurs. Small businesses owners tend to remain small because it is more manageable. If business owners dont grow their business to a size that impacts the economy and provides jobs, they remain as business owners, not entrepreneurs. I believe that the problem with the definition of entrepreneurship is that we tend to look at it from a snap shot point of view rather than a time frame. From a time frame point of view, the story becomes all too different. It shows growth trajectory, risk taking, innovation, and more importantly job creation. Also it is a progressive series of business processes. A business that is efficient enough to destroy its competitors in its wake. In a nutshell it is the path from a small businesses to a large business. We are entrepreneurs if we are actively seeking high growth and demonstrating it. It is also important to note that it takes 15 to 20 years to have a sustainable large business. Sustainability is important in a world of IPOs creating instant large companies. There might be shortcuts to becoming large, but staying large, innovative and productive is another story. There are many true entrepreneurs in history such as John D Rockefeller, Andrew Carnegie, Bill Gates, Sam Walton and more recently Steve Jobs. They all started small, but chose to grow, innovate and dominate the markets as entrepreneurs.
Posted on: Sun, 12 Oct 2014 14:15:56 +0000
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