Is a small business owner an entrepreneur

So, you own a small business. Does that make you an entrepreneur? There’s more to this question than mere semantics. All entrepreneurs are small business owners at some point, but not all small business owners are entrepreneurs.

They may start in the same place, but they rapidly diversify, says Christopher Young, partner in EY Canada’s private client services practice. He spends a lot of time with Canadian entrepreneurs as part of his involvement in the company’s Entrepreneur of the Year award.

“I visualize a Venn diagram,” says Young. “There’s a slight overlap between the entrepreneur and the small business owner at the start.”

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This overlap disappears before too long, thanks to a key entrepreneurial characteristic, says Victoria Lennox, co-founder and CEO of entrepreneur advocacy organization Startup Canada: A hunger for growth. While entrepreneurs start small, they have big aspirations, and need to make their companies larger. While a small business owner may be content running a single garage, dry cleaner or set of storage units, the entrepreneur will want more. “Their motivations and mindsets matter significantly, not so much in terms of the types of companies they start, but more so in their ambitions to scale,” she says.

Small business owners try to create a job for themselves. Entrepreneurs want to create something bigger than themselves.

Neha Khera, partner, venture capital fund 500 Startups Canada

Neha Khera, partner at the Canadian arm of global venture capital seed fund 500 Startups Canada, sums it up succinctly: “Small business owners try to create a job for themselves,” she says. “Entrepreneurs want to create something bigger than themselves.”

Great ambition carries greater risk, though, and an appetite for risk is a big part of the entrepreneurial mindset. Entrepreneurs take on more risk than their small business counterparts because they often require more funding to grow a business quickly.

Many may be willing to put everything on the line to pursue their dreams, but not everyone is happy to invest in it.

An entrepreneurial risk appetite doesn’t always jive with a Canadian environment that is traditionally risk averse, says Neha.

“That definitely impacts the technology industry, where a lot of these companies need funding and they’re just not able to get enough of it,” she says, adding that the rate at which many fast-growth technology companies go through cash puts them outside many Canadian investors’ comfort zone.

Beyond tech

Still, technology isn’t the only industry to welcome an entrepreneurial mindset. Entrepreneurs may garner the lion’s share of the headlines, but EY’s Young sees plenty of entrepreneurs in other sectors.

Last year’s finalists in the Ontario regional Entrepreneur of the Year awards covered everything from finding the lowest rates on car loans, through retail facilities maintenance to selling tank tops. “There are interesting stories from them all,” he says. “It runs the gamut.”

It isn’t just unparallelled growth that takes entrepreneurs into dangerous and uncharted waters. Khera adds that entrepreneurs are also often eager to innovate with new products and services that disrupt existing business models. “They’re often creating entirely new businesses or products that don’t exist, or new business models that haven’t been invented before. All of that feeds into their appetite for risk,” she adds.

Their motivations and mindsets matter significantly, not so much in terms of the types of companies they start, but more so in their ambitions to scale

Victoria Lennox, CEO, Startup Canada

This leads to another key characteristic among entrepreneurs: The ability to embrace failure. “Four out of five startups fail in the first five years,” says Lennox. After all, entrepreneurs trying to grow quickly and bring new concepts to market stand a good chance of wiping out. “It requires an entrepreneurial mindset to get back up and start again, maybe on the same idea or on a new idea by learning from what happened before.”

Born or made?

It clearly takes a rare mix to be a true entrepreneur, but it’s also a mentality that can be learned, say experts. “There are as many that are born as are made,” says Young. The traditional narrative casts the entrepreneur as a college dropout, fuelled early on by a visionary idea that they cannot ignore. Facebook founder Mark Zuckerberg followed in the footsteps of Bill Gates in dropping out of Harvard.

There is another kind of entrepreneur, though, points out Young. This is the person who has slogged through a pedestrian career, perhaps shouldering a 9-5 office job or working in the family business, but who gets to a certain point and asks if there’s more to life. “They open their minds to new opportunities and take that jump,” he says, adding that learning from business mistakes can equip them enviably for a new, self-motivated career.

Being open to new opportunities is perhaps one of the most defining factors among entrepreneurs. Young points to a constant curiosity and coachability — the willingness to learn from others and acquire new skills. Startup Canada’s Lennox says that more people than ever are pursuing these goals as Canadian culture shifts.

‘Unicorn’ companies that have sprouted from nowhere to achieve stunning success are inspiring tomorrow’s business people, she says, citing Amazon as an example. “We have a generation of millennials that have grown up in that context.”

All of which is to say that small business owners can recast themselves as entrepreneurs. There’s hard work to be done, and risks to take. Ultimately, whether or not you’re cut out for it depends on your state of mind.