One topic I often cover in private consulting sessions is the shift from being a small business owner to being an entrepreneur. In the local small business arena, it’s the critical shift that takes someone from a 5/6-figure to as much as a 7-figure income.
Dr. Jeff Cornwall blogged today about the difference:
When are Small Business and Entrepreneurship Different?: “When a business, no matter how small, goes public with its stock it begins to become a different entity when compared to a classic entrepreneurial venture. Entrepreneurship and private ownership to me are critically intertwined. Once a business goes public, the founders become employed managers. Just ask any of the legions of entrepreneurs who went public, only to be fired from the company they founded. Granted, this can also happen to an entrepreneur before his company goes public if he gets venture capital money. But, it is even more common once the company becomes a “public good.”
I distinguish between small business and entrepreneurship by the owner, not the business.
- Someone engaged in “doing” the business of the business — the plumber who is on the truck, day in and day out — you’ve got a small business owner.
- Someone who devotes the bulk of his or her time on growing the business — whether that means more/better plumbing, expanding locations, leveraging a market into ancillary businesses, or establishing strategic partnerships (for a few examples) — you’ve got an entrepreneurs.
The more time you spend on entrepreneurial activities, the faster your gross and net income rise.
As for Jeff’s distinction between private and public ownership?
I have two big disconnects…
- Companies like Apple or PSS/Worldmedical that are publicly owned but “entrepreneurial” through and through (a reflection of the personality of their top dogs).
- A business can be privately owned but decidedly UNentrepreneurial. (See the plumber example above).
What do you think? Leave a comment…