The connection between entrepreneurship and small business.
This essay discusses the concepts of small business and entrepreneurship and relationship between them. We will try to define and explain the terms ?owner-manager? and entrepreneur, in other words who operate a small business enterprises. We also will examine the similarities and differences of these terms.
From the outset it needs to be emphasized that while we will talk about the small business and entrepreneurship, these terms need to be defined. For small business there is still no single definition which satisfies all purposes. There are several other definitions based on both quantitative, such as number of employees, invested capital and total value of sales, and qualitative characteristics, which was covered in Report of the Committee of Inquiry on Small Firms, 1971. According to that, ?a small firm is one that has a relatively small share of its market. Secondly, ?it is managed by its owners or part-owners in a personalized way, and not through the medium of a formalized management structure. Thirdly, it is also independent in the sense that is does not form part of a large enterprise and that the owner-manager should be free from outside control in making their principal decisions.?(Cameron & Massey, 1999, p.5).
These criteria certainly may be applied to an entrepreneurship as well. Most people equate entrepreneurship with either new or small businesses. However, entrepreneurship can be more correctly viewed as a behaviour characteristic. ? An entrepreneur is someone who recognizes an opportunity, raises the money and other resources needed to exploit that opportunity, and takes or all of the risk associated with the executing the ensuing plan?{Barrow, 1993, p.14).
Further, Barrow indicates that the term of ?entrepreneur? was introduced into economics by Cantillon (1755) and raised to prominence by the French economist J.B.Say around 1800. He used it to describe someone who ?shifts economic resources out of an area of lower and into an area of higher
From the outset it needs to be emphasized that while we will talk about the small business and entrepreneurship, these terms need to be defined. For small business there is still no single definition which satisfies all purposes. There are several other definitions based on both quantitative, such as number of employees, invested capital and total value of sales, and qualitative characteristics, which was covered in Report of the Committee of Inquiry on Small Firms, 1971. According to that, ?a small firm is one that has a relatively small share of its market. Secondly, ?it is managed by its owners or part-owners in a personalized way, and not through the medium of a formalized management structure. Thirdly, it is also independent in the sense that is does not form part of a large enterprise and that the owner-manager should be free from outside control in making their principal decisions.?(Cameron & Massey, 1999, p.5).
These criteria certainly may be applied to an entrepreneurship as well. Most people equate entrepreneurship with either new or small businesses. However, entrepreneurship can be more correctly viewed as a behaviour characteristic. ? An entrepreneur is someone who recognizes an opportunity, raises the money and other resources needed to exploit that opportunity, and takes or all of the risk associated with the executing the ensuing plan?{Barrow, 1993, p.14).
Further, Barrow indicates that the term of ?entrepreneur? was introduced into economics by Cantillon (1755) and raised to prominence by the French economist J.B.Say around 1800. He used it to describe someone who ?shifts economic resources out of an area of lower and into an area of higher