The terms “young entrepreneur” and “small business owner” seem to be synonymous with one another. After all, what is a young entrepreneur besides someone who owns a small business? And what’s a small business owner if not someone with an entrepreneurial spirit? Even on The Kantner Foundation Scholarship blog, we’ve used the two terms interchangeably.
Yet, there are subtle differences. One is not necessarily better than the other. But for those of you who like to get really granular with language, understanding the differences might change the way you think about yourself and your business.
The subtle differences boil down to four things:
Let’s break these down a bit further. Maybe you’ll see yourself more in one type than the other, but remember that there’s plenty of overlap. Give yourself room to grow, experiment, and try out different paths to success.
Young entrepreneur approach: Entrepreneurship is guided by a growth mindset. Starting small is fine, but your ultimate goal is world domination. Or something approaching world domination.
Your business plan includes timelines for things like hiring employees, expanding product diversity, and maybe franchising. Your goal is to get as big as possible as quickly as possible. If something’s not working, you dump it and move on.
Small business owner approach: Small business owners are not only fine with staying small, but they also want to stay that way. You’re more sentimental about your company and don’t want to sell it or see it fail.
Your business plan is less about growth and more about stability and brand identity. This isn’t to say you never expand, it’s just not your top priority. When something’s not working out for you, you’re more likely to take the time to fix the underlying issue rather than looking for a different solution.
Young entrepreneur approach: Take that risk! Nothing ventured, nothing gained! Fortune favors the bold! And other pithy sayings!
Risk is a natural product of a growth mentality. Entrepreneurs are always thinking about making a company bigger, better, more. You are quick to recognize and embrace positive changes and good opportunities.
Younger entrepreneurs are great at taking risks. You have everything to gain and very little to lose. You’re also more open-minded when it comes to untested ways of doing business.
Small business owner approach: Starting any business is risky, but small business owners tend to be more thoughtful about the risks they take. You’ll assess a situation from all sides before you make a decision. Because you are less focused on growth and more focused on stability, you understand that not every opportunity is good for your company.
Small business owners may have inherited a family business, like a restaurant or craft company. For you, taking too many risks carries the potential to lose everything your parents or grandparents worked so hard to build. There’s a sentimentality aspect to small business owners that keeps them cautious. That’s why you take the time to weigh out the pros and cons before taking a risk.
Young entrepreneur approach: Entrepreneurs are problem solvers. The opportunities you see come from real-life challenges in the world around you. Your motivation, then, has a lot to do with creating a profitable solution. This isn’t to say you aren’t passionate about your company, just that you want to make sure you’re seeing a return on your investment.
Think of it like this: you may love fashion, but does that mean you can’t find a way to make money off this passion? Your ideas may translate to a personal styling service or your own clothing line. You’re taking what you love and using it as the foundation for your global empire.
Small business owner approach: Of course you want to make a profit doing something you love. Who doesn’t? It’s the American Dream! But you’re not interested in anything like a global empire. You’re happy to provide goods and services in the way you feel works best for you. You know your customers already and know what they want – and what they expect.
Young entrepreneurs want to become household names. Small business owners, on the other hand, are happy to be important members of their communities.
Young entrepreneur approach: Remember a few paragraphs ago when we said that entrepreneurship is all about bigger, better, more? That’s where creativity comes in.
The creativity aspect for entrepreneurs manifests as ways to grow the business. There’s a lot of market-watching, customer feedback, and monitoring of competitors. Entrepreneurs are never satisfied with keeping things as-is. You want to be the biggest and the best. That’s why you’re always looking for the Next Big Thing, or better yet, inventing the Next Big Thing.
Entrepreneurial creativity means innovation. It means taking risks, as we also mentioned above. Young entrepreneurs need an almost psychic ability to see into the future and know what and where the demand will be. And then they have to be willing to go there and do whatever it takes.
Small business owner approach: Because small business owners are more focused on staying the course, your creativity is poured into day-to-day operations. How can you make life better for yourself? What can you do to be more efficient?
Like entrepreneurs, small business owners need to spend some time focusing on customers and competitors. But you’re not trying to build a multi-national conglomerate. You’re happy to keep selling cupcakes to your neighbors. Creativity for you means perhaps setting up a stall at a farmer’s market or trying out seasonal flavors. As long as your customers are happy and you’re making a profit, you can channel your creative energies directly into making your business the best it can be.
You might have noticed by now that there are plenty of positives to being a young entrepreneur as well as being a small business owner. The two are not mutually exclusive! Almost all small business owners are, to some degree, entrepreneurs. And many young entrepreneurs will be small business owners. But as you move towards your goals, you might consider which of these descriptions better suits your needs and desires.
Click here to learn how the Kantner Foundation helps young entrepreneurs by offering college scholarships to Florida high school students.