Difference Between Entrepreneurship & Small Business Management

by Chris Joseph; Updated September 26, 2017

A small business enterprise requires skilled management to become successful. Depending on the nature of the enterprise, the entrepreneur and the manager may be the same person. In other cases, the entrepreneur may have little to do with the day-to-day operations of the business. The skills need to be a successful entrepreneur are not necessarily the same ones required to be a competent manager.

Leadership Skills

An entrepreneur is often a sole proprietor who does not employ others in her business, so she might not need to possess strong leadership skills. A small business manager is typically in charge of running a business operation, which may involve the need to manage a staff of employees. The entrepreneur who is also a manager faces the challenge of ensuring the profitability of her operation while effectively leading a group of workers.

Focus

Entrepreneurship requires a business owner to look at the "big picture" pertaining to his business, which may include seeking new markets, establishing important contacts through networking and planning for future expansion. Small business management may be more focused on the day-to-day operations of the business such as dealing with customers, ordering supplies or overseeing production. In essence, entrepreneurship involves developing the plan while management involves the execution of the plan.

Risk

The very nature of entrepreneurship requires the desire to take risk. The entrepreneur may incur a large amount of debt or invest her entire life's savings into a business and suffers the consequences if it fails. Small business management often involves minimizing the risk once it presents itself. The manager must perform tasks such as finding ways to limit expenses to ensure maximum profitability. Entrepreneurship often welcomes risk, while sound business management practices require an aversion to risk.

General Versus Specific

Entrepreneurship doesn't necessarily require a great deal of knowledge about a particular business. An entrepreneur may be skilled at identifying excellent business opportunities and getting a business off the ground, but may be lacking in actual management skills. A business manager, on the other hand, often needs intimate knowledge of the business to run it effectively. Depending on the size and scope of the small business, several mangers may be needed who possess specific skills in areas like accounting or marketing.