Entrepreneurship and small business management. You may have also been curious to know about both of these topics especially when you are a business enthusiast reader of being diplomatic. Let’s cover all the aspects that you need to know about it all.
Chapters
- What is entrepreneurship and small business management
- Essentials and how it affects the economy or nation
- In entrepreneurship
- In small business management
- Skills needed
- In entrepreneurship
- In small business management
- What is the relation between them
- conclusion
Entrepreneurship and small business management are the business terms that aim to create and run a profitable venture. They both need proper business skills and the right opportunity to start. Entrepreneurship is a bigger field than small business management.
Entrepreneurship is all about generating new ideas or creating something useful that benefits humankind. It’s a world of opportunity.
on the other hand, small business management is about coordinating all business activities in a small business like hiring, training, marketing, budgeting, setting goals, and data analysis, and directing all these activities toward the common organizational goal.
In this article, you will learn many things about entrepreneurship and small business management and how they are related to each other.
What is entrepreneurship and small business management?
let’s talk about entrepreneurship, it is about generating new ideas and inventing something useful that benefits humankind.
But we all already know this, so what is the exact definition of entrepreneurship?
According to Peter Drucker entrepreneurship is a practice that involves increasing in value of the satisfaction of a customer by creating something new from existing resources.
Another definition- entrepreneurship is the art of creating ideas into reality which involves identifying opportunities, innovating, solving problems, taking risks, and tackling uncertainties.
Most People think entrepreneurship is a destination but it’s a journey of continuous learning driven by courage, curiosity, and commitment.
Now let’s talk about small business management
just because this business term has ‘small’ in it doesn’t mean it’s a small job. It’s a very big and responsible role which includes handling various aspects of business activities.
It takes great effort to manage a small business because a single owner has to handle multiple roles and balance them.
We can say that small business management is the practice of overseeing and coordinating various aspects of business like marketing, budgeting, hiring, training, setting goals, managing employees, finances, suppliers, etc and directing all these activities towards a common organizational goal.
Small business management plays a vital role in making a venture survive in a competitive playground.
Essentials of entrepreneurship and small business management
Now let’s talk about why entrepreneurship and small business management are important and how they affect the economy of a country.
First, let’s talk about
Why entrepreneurship is important and how it helps the nation or the economy
Entrepreneurship is vital for any country’s economic growth.
It has a positive impact on the economy, societies, and communities.
1. Innovation
We all know entrepreneurship leads to creating something new and better. Entrepreneurship and innovation are closely related. Entrepreneurship requires innovation.
Any product and service that is beneficial for the country or the people leads to long-term economic growth and sustainable development.
Because of this people don’t use outdated technology and live a better life. Their standard of living improves.
Around 2-3 % of innovation is done by entrepreneurs.
Read our article on Innovate in India
2. Employment
New firms mean more people to work. Entrepreneurship also fills job opportunities.
Different work needs different types of laborers with good skills.
According to a study around 34 million job opportunities were created by entrepreneurs from the period of 1980.
3. Source of wealth for the nation
A successful entrepreneur not only earns money for himself he also earns money for the nation.
They help the nation generate wealth by launching a new product and service or boosting tax contributions.
Entrepreneurship heads the nation towards better opportunity, which is a significant input to an economy.
Extra point: Entrepreneurship is important for any country because If there is no entrepreneurship then the nation will have no new technologies which means it will use the same outdated technologies.
Due to this the standard of living of the people will fall and this will lead to no social change and development which will cause no transformation in the future.
Now let’s talk about
Why small business management is important and how it helps the nation.
Entrepreneurship is a bigger field than small business management but it doesn’t mean it’s a small job.
Like entrepreneurship, small business management also plays an important role in the community, society, and economy.
Let’s discuss them-
1. Help to achieve goals for owners
It helps to achieve goals for the small business owner because it helps the owner by coordinating different aspects of a business.
Because of this, there is no duplication of work and the owner doesn’t feel overburdened.
Small business management serves as the backbone of the business.
2. Structured framework
This is one of the most important points. Small business management helps to provide a structured framework which is everything in a business.
A structured framework will help the owner to make better decisions and analyze data more clearly.
3. Resource allocation
It also helps to allocate resources properly at the right place because it helps to manage finances, suppliers, creditors, and budgeting.
proper resource allocation is necessary otherwise it will lead to budget overruns and wastage of resources.
4. Employment generation
Small business management helps to generate job opportunities. It is also responsible for hiring and training the employees.
It also generates job opportunities in rural areas.
According to Forbes small and medium-scale businesses generate over 120 million jobs all over India.
5. Overall development of the nation
Small business management helps small businesses work effectively. It helps to grow the backward region of a country (rural areas) and generate employment.
Small-scale industries contribute around 40% of total exports in India which is an important part of revenue earned from export.
A good small business management will create a profitable venture that will act as a backbone of the economy.
Skills required for entrepreneurship and small business management.
We have discussed the definition and the importance now let’s discuss the skills required for entrepreneurship and small business management.
Skills needed for entrepreneurship:-
1. Learning, learning and learning
As mentioned above entrepreneurship is not a fixed destination it’s a journey of constant learning. An entrepreneur has to adapt himself according to the changing environment.
An entrepreneur has to learn constantly about new things coming into the market.
New things like new technology used in the field or new policies made by the government.
2. Expertise
An entrepreneur must have expert-level knowledge about his domain or work field.
For example, if he is from a financial background then he must have a deep knowledge about finance.
This will help an entrepreneur to plan or think from a different point of view.
3. Critical thinking and problem-solving skills
Every entrepreneur must have critical thinking skills this is the most important skill to have because businesses have uncertain environments.
Anything can happen at any time so an entrepreneur must be ready to solve it quickly and make logical decisions.
Critical thinking and problem-solving skills also help to give a unique and best way to solve any problem. It also helps to find out the best way to beat the competition and overcome challenges.
4. Public speaking skills
As an entrepreneur, one has to talk to several people to maintain a good network.
If an entrepreneur doesn’t know how to speak confidently in public then he won’t be able to express his ideas to the world.
Public speaking skills are necessary to pitch ideas and to tell the vision and values of the ideas to others.
5. Networking
Networking is one of the main causes of any business success. All successful entrepreneurs have a lot of good networks.
A good network with outsiders like suppliers, creditors, and other business professionals helps entrepreneurs stay informed about industry trends, and find new business contracts and like-minded business partners.
It can also help businesses to generate leads. A strong network is the way to new opportunities.
6. Leadership
Entrepreneurship is incomplete without leadership. Leadership is the ability to influence others and make them work to achieve a common goal.
This skill is important because an entrepreneur has to manage and look over large numbers of managers and departments.
If an entrepreneur has leadership skills then he will make them work towards a common goal otherwise it will lead to unbalanced work with poor coordination.
7. Patience
Entrepreneurship is a game of patience. It takes several years to become successful in entrepreneurship.
Most people turn their back whenever they make a mistake and face temporary losses but they don’t understand without mistakes no one can grow in this field.
If anyone is getting into this field so that he can get rich quickly then sorry to say this field is not for you. This field requires curiosity and motivation that never ends.
Always remember “To lose patience is to lose a battle”
Skills needed for small business management:-
1. Negotiation
In small businesses, negotiation plays a vital role because it can help the owner to get his desired agreement.
Negotiation skills must be strong to deal with outsiders.
It also helps to avoid any heated conversation because a good negotiator will always create a win-win situation.
This skill will never make the owner and his suppliers or customers unsatisfied due to this skill he can close business deals without suffering any loss.
2. Sales and marketing
When we open a small-scale business we have to tell people about our business.
In small business management sales and marketing are very necessary because they help to promote the product and services, increase revenue, and grab potential customers.
Due to sales and marketing, we can educate the customers about the products and their benefits.
It gives a push or boost to the business.
3. Employment generation
Just like entrepreneurship, small business management also helps to generate employment.
It mostly generates employment from rural areas which helps those backward areas to develop and also improves the standard of living of people who live in those areas.
Small business management not only hires but also provides training to the workers so that they can reach their maximum potential.
4. Time management
This skill is one of the most important skills because in small businesses owners have to work on different areas of business(especially in the starting days)
The owner has to do planning, controlling, marketing, budgeting, hiring, and managing employees and suppliers on his own.
Good time managing skills will lead to higher productivity and deliver quality work.
5. Financial management
A piece of good financial knowledge will help the owner understand inflows-outflows of cash. It will also help the owner to allocate the resources properly.
Financial knowledge will help the owner to track expenses which will help him to avoid the wastage of resources.
A little bit of accounting knowledge is like the cherry on the cake because the owner can understand financial statements and know about the overall data or financial health of the business.
How are entrepreneurship and small business management related to each other?
Entrepreneurship and small business management are related to each other but we cannot treat them the same.
Entrepreneurship is a vast field and small business management is a small field but it doesn’t mean one is more important than others.
Both are business practices that aim to create and run a profitable venture.
Entrepreneurship is something that adds something new and better to society it can be a new product or a new service and small business management is a practice that manages the small business from different areas.
Entrepreneurship is more focused on creativity and innovation and small business management is more focused on business stability and deals with existing products and services.
Both fields are challenging and full of risk. Entrepreneurship involves the startup process which means small business management is a part of entrepreneurship.
Both play a vital role in the economic growth of the country. small business management boosts the local economies of that area and entrepreneurship boosts the overall economy of the country.
We can also say small businesses are the backbone of the economy and entrepreneurship is the heart of the economy.
Conclusion
We hope you gained a good amount of knowledge from this article.
After reading this, we can say that both entrepreneurship and small business management are challenging fields and they can only driven by a person with curiosity and passion to do something big.
In these fields, one gains experience from failures and reaches the top through solid consistency and one turns back and moves away from the risk of failure.
Both have a powerful impact on economic development and work on shaping the global future.
