The Economy Suffer Stagnancy When Dominated With The Activities Of Small Business Owners

Most often, the term Entrepreneur and Small business owners are used synonymously. While they have much in common, yet there are significant difference between the entrepreneurial venture and a small business. Such difference has a direct impact on the smooth managing of an economy on the state of progress or stagnancy.

Defining Small business by the number of employees, net profit and the Asset has been the bases for International standards of evaluation ignoring the aspect; I termed it most relevant to support the definition and the evaluation of the premiss; which is the behavioural component of the venture owners. Such has resulted in the difficulty, to scholastically distinguish the definition of a small business owner from the Entrepreneur especially in the context of developing and underdeveloped economy.

This essay makes an attempt to practically distinguish the two variables that is the Entrepreneur and the Small Business Owner (SBO) in African context and the direct impact of their actions to the performance of the Economic mechanism of Developing and the Under developed Economy

Small Business Owners (SBO) is the kind of business executives who established a venture for the purpose of subsistence, while Entrepreneurs establish a venture with the greatest motive on profit, focuses nothing less or more.

This definition becomes unique to differentiate the two variables in the economic market because their purpose defines their strategy in penetrating the business market.

The following factors below could be the best measurement to be used to distinguish the role both variables play in the micro level to affect the macroeconomic functioning of a state.

1. Amount of Wealth Creation
2. Speed of Wealth Creation
3. Risk Level
4. Innovation Power

AMOUNT OF WEALTH CREATION
The Amount of Wealth Creation is defined on the perspective of the quantum of wealth expectation within a specific period of time by the producers. It is an on doubtable fact that an Entrepreneur evaluated on this parameter will score high than a Small Business Owner (SBO). The Profit Margin target of an Entrepreneur is always at the highest peak comparing to Small Business Owners (SBO). For instance taking the case-study of two stated variable of this essay, who chose to enter into Rice Production and Distribution Business for three years the empirical report from the book “THE CHRONICLE OF ENTREPRENEURSHIP IN AFRICA”;(Senzu.2015; 50) depict that the Entrepreneur will expect a Profit return not less that 50% of the resource investment. Remember to attain that call for effective labour management and strategies. The same data justify that a Small Business Owner (SBO), will not expect a profit margin of 10% of it resource investment within the same period of time because both specified variable of this essay has different purpose to exploit the opportunities from the market.

SPEED OF WEALTH CREATION
The Speed of Wealth Creation is the measurement of the pace of economic return on the venture per strategic investment of resource. Entrepreneurial per character are very time conscious in profit making comparing to Small Business Owners (SBO); Therefore Entrepreneur acceleration to wealth creation is very high comparing to Small Business Owners (SBO).

RISK LEVEL
Risk is the Amount of harm that can be expected to occur during a given period due to specific harm event (Wikipedia, 2014). Statistically the level of risk can be calculated as the product of the probability that harm occurs multiplied by the severity of that harm. In the Business Adventure, the acceleration rate of the Entrepreneur for wealth creation has made it easy target for accident oriented cases as compared to Small Business Owners (SBO).

The Character of Government and the laws to support aggrieved Entrepreneurs to re-wake up and resurrect the vision again for the greater benefit of the state determine the category option, upon which most of the citizens of a particular state will pursue either as an SBO or an Entreprenuer in developing and under developed economy.

To my Surprise, Entrepreneur failure in developing and underdeveloped economy is legislated to be a crime; Collapsing of a venture as an entrepreneur is directly proportional to debt accrued which can result in some Entrepreneurs finding themselves in prison for the rest of their life in most of the African Countries especially when he or she is not politically connected. So for business executives to play the business game safe, will always resort to Small Business management whereby it state of accident cases is very minimal to overcome, as an individual or a group.

INNOVATION POWER
Innovation is the process of translating an idea, or invention into goods or services that create value or for which customers will pay. “To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need”, (Business Dictionary, Webfinance. 2015). Innovation as a tool and the rate upon which business executive adopt it at the highest peak give the distinction between the Entrepreneur and the small business owner. This also attests to the fact that, one can only be a successful entrepreneur based on the level of experience in a field of practice because a newly trained driver can never speed on a high way unless a well trained experienced driver, who could fully control the steers and breaks creatively on a high-way in case of bumping into any obstacles.

The danger of most developing and underdeveloped economy is; they have more of Small Business Owners (SBO) due to the structural nature of the Government Policies existing, yet such SBO’s project themselves publicly as Entrepreneurs, therefore define by this paper as economic deceit and intellectual dishonesty in macroeconomic management, such result in irrelevant market shocks and causing stagnancy or retrogression. It further affects the accuracy of future policy enactment.

It could also be intellectually be debated, that a Small Business dominated economy, the Case-study of Germany, which has affected the development of their economy rapidly than ever as a best scenario. My objection to such application is, such ventures that are small and supporting the German economy are managed by owners that have Entrepreneurial drive as established in the context by Hermann Simon “Success strategies of unknown world market leaders”, from “ HIDDEN CHAMPIONS OF THE TWENTY-FIRST CENTURY”, (Simon.2009).

Unlike the Small Business Owners in developing and under developed economy who establishes ventures just to raise small profit to complement income support for family expenditure, while they are involve in main stream government employed institutions.

Therefore, the springing of the kind of Small Business Owners (SBO) in Africa and their significant impact in actions to the macroeconomic level is negligible, even though previous research papers scientifically justify the correlation between empowering small scale enterprise and the economic development and growth of a nation by assuming that every small scale enterprise owner qualify to be in a category as an Entrepreneur in developing and under developed economy is proven wrong by the suggestion of present empirical findings and report from The Chronicle of Entrepreneurship In Africa (Senzu.2015; 78) depict contrarily.

Tweneboah Senzu
Professor in Bastiat School of Technological University of the Americas

[email protected]
Type: Working Paper........ BSE-457/TUA-2015