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Difference between Small Business and Entrepreneurship

Difference between Small Business and Entrepreneurship

Small businesses and entrepreneurship are often thought of as being one and the same, but there is a big difference between the two. Small businesses are typically defined as having fewer than 500 employees, while entrepreneurship is about starting your own business. Many people confuse small businesses with entrepreneurship because many small businesses are started by entrepreneurs. However, not all small businesses are entrepreneurial in nature, and not all entrepreneurs start their own businesses. So what exactly is the difference between small businesses and entrepreneurship? Let’s take a closer look.

What is Small Business?

  • Small business refers to privately owned companies and organizations with typically fewer than 500 employees. Small businesses come in many shapes and sizes, ranging from corner bodegas to large tech firms; they are the backbone of our country’s economy and are responsible for job growth and fostering innovation.
  • Small businesses often face unique challenges that larger enterprises don’t experience, such as limited financing options, difficulties maintaining market share against much larger competitors, and cash flow issues due to reliance on customers who pay late.
  • Small business owners face these challenges with creativity and tenacity, however, by developing strategies for success such as managing costs, capitalizing on economies of scale, and staying up to date in their industry. Small business ownership requires a commitment – but many entrepreneurs find it tremendously rewarding.

What is Entrepreneurship?

Entrepreneurship is the process of recognizing a business opportunity, taking risks to pursue it, and providing value to customers as a result. Entrepreneurs come up with novel ideas and innovative solutions that bring value to people’s lives. Entrepreneurs have the courage to focus on a specific business idea, and often lack the assurance of success.

But with enough determination and perseverance, one can launch a successful venture that has the potential to positively impact many people. Entrepreneurship has changed the way we see business today; it is no longer just about making money, but also about contributing something useful to society.

Difference between Small Business and Entrepreneurship

Small business and entrepreneurship are two fairly related concepts with unique distinctions. The small business leverages resources, personnel, and finances to produce goods or offer services that customers need the most.

  • On the other hand, entrepreneurship is the process of identifying and pre-empting problems that people may face in the future and finding ways to use existing technology and resources to solve those issues before they happen. Small businesses respond to existing needs, whereas entrepreneurs create new markets.
  • Small businesses have more success rates when compared to startups, yet entrepreneurs pursue larger projects that carry greater risk potentials of success or failure.
  • Ultimately, each strategy offers its own rewards depending on the efforts put in, but both require creativity, passion, determination, and a dedicated sense of responsibility.


The answer is simple but profound. Small businesses are run by people who want to make a profit. They have employees, overhead, and a bottom line. Entrepreneurship is about creating something new—something that didn’t exist before. It’s about solving a problem or filling a need in the marketplace. There are no guarantees in entrepreneurship, but if you can create value for others, you stand a good chance of success.

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