Differentiating Entrepreneurs from Small Business Owners : A Conceptualization

Much research about entrepreneurs, entrepreneurship, and entrepreneurial ventures may be misleading in its conclusions because of failure to distinguish entrepreneurs from small business owners and managers (although there is some overlap between them). This analysis exxtends Schumpeter's theory of the entrepreneur and distinguishes entrepreneurs and entrepreneurial ventures from small businesses and other business managers in order to better understand the phenomena and improve validity of entrepreneurship research. Possible distinguishing traits are eliminated, including risk-taking, demographic characteristics, attitudinal and behavioral characteristics, and stages of corporate life-cycles. The critical factor is innovation and creating activity. An entrepreneur is defined as "an individual who establishes and manages a business for the principal purposes of profit and growth" and engages in "innovative behavior and will employ strategic management practices in the business." An entrepreneurial venture fits at least one of Schumpeter's categories: the venture's goal are profitability and growth, and the business is characterized by strategic practices. (TNM)