What makes an entrepreneur different from a small business man or woman?
Well, the best definition of what entrepreneurs do is provided by Peter Drucker. He said
Entrepreneurs innovate. Innovation is the specific instrument of entrepreneurship. It is the act that endows resources with a new capacity to create wealth.
Okay, so what does that mean?
Well, if you are selling your time just as a web designer, then you are not innovating. Yes, you are in business and perhaps you have increased the chance that you might eventually innovate, but in what way are you endowing resources (here the resource is time) with a new capacity to create wealth? Unless you are offering a new service, and then perhaps hiring a team of consultants to carry out that service, then you are not endowing time with a new capacity to generate wealth.
An alternative example might be to compare opening a burger restaurant which usually is closer to creating a job for yourself than it is to being an entrepreneur. This is because providing burgers for cash in a location of establish restuarants is not a new idea – although it might be commercially wise.
Yes, you may be meeting a demand and may even make money, but the point is that the demand existed before you built the restaurant. Your role is to satisfy existing demand.
Whereas, Apple is an entrepreneurial company because their new products create new demand. I am not an Apple customer, I have never bought one of their products for myself (neither iPod nor iPhone) but soon, I will be. Yes, I will buy the iPad and the result of their innovation is that they are creating millions of new customers including me.
Hence, being an entrepreneur is about creating a new service or product that wasn’t previously available, or rather as apple do, taking mixing existing technology with new technology and coming up with a radically different product. Or take the apple iPhone, it wasn’t the first smart phone, but it was the first smart phone to do things in the Apple way – and that stimulated huge demand. It created new customers.
But, don’t stop there, you don’t need to be Apple to innovate.
You could be running a burger restaurant and create new sauces and launch those sauces – that would be innovating. If they work, then why not sell them through the supermarket and create a food brand? Or perhaps you could write and publish a book on how to cook the perfect burger? Or perhaps you start to make turkey burgers or carrot burgers or something new and different that creates a new set of customers.
You might even be selling your time as a consultant and this has the potential to be entrepreneurial if you are offering original services. If you write a book about your method and sell the idea/ concept, then you can start to train other consultants on how to do it your way.
The difference then is both very small but huge at the same time.
Peter Drucker also said
Whenever you see a successful business, someone once made a courageous decision
This is another great saying because the small step across the divide of doing what everyone else does and doing something unique and new and going out on the streets to sell your new idea, yes, that takes courage.
So, have courage, do something new and don’t look back. That is how to get from running a small business to becoming an entrepreneur.