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The concept of competence, as it is brought into play in current research, is a potentially powerful construct for entrepreneurship education and training research and practice. Although the concept has been the subject of strong debate in educational research in general, critical analysis of how it has been used, applied and experienced in entrepreneurship education practice is scarce. This article contributes specifically to the discussion of entrepreneurial competence by theoretically unfolding and discussing the concept. Subsequently, the implications of applying a competence-based approach in entrepreneurship education are illustrated and discussed based on analysis of two cases that were aimed at identifying, diagnosing and eventually developing entrepreneurial competence in small businesses in the Netherlands and Flanders (Belgium). The cases show that the added value of focussing on competence in entrepreneurship education and training lies in making the (potential) small business owner aware of the importance of certain entrepreneurial competencies and in providing direction for competence development. In this process it is fundamental that competence is treated as an item for discussion and interpretation, rather than as a fixed template of boxes to be ticked. Furthermore the cases highlight that a competence-based approach does not completely determine the type of educational and instructional strategies to be used. Its consequential power in that respect is limited.