Many people consider the terms “entrepreneur” and “business owner” to be interchangeable. Although the two expressions are certainly related, they aren't identical. Learn how entrepreneurs are different and find out which describes you best.
The definition of a business owner is relatively straightforward. According to Heartpreneur.com, a business owner has a product or service that makes a difference for their customers. They clearly understand who their target market is, and they want to serve their customers and make a profit. These professionals own companies, benefit from the profits, and take responsibility for the organization's operations. Individuals who choose to lead businesses are often driven, passionate, and goal-oriented.
While entrepreneurs share similar characteristics, the definition of entrepreneurship is clouded by popular myths, such as the idea that all entrepreneurs come up with revolutionary inventions or the belief that they embrace uncalculated risks. It's true that their business ideas can be much riskier, but entrepreneurs have to accept all of the upsides and downsides of their ventures. In addition, entrepreneurs tend to have much more limited resources and must use creative means to raise capital to support their business ideas.
Although entrepreneurs and business owners are both experts at running organizations, they differ in key ways. Get to know some of the biggest contrasts between these two types of business experts.
Entrepreneurs are known for taking a growth-focused approach to their companies. Few entrepreneurs start a business with the intention of keeping it small and manageable. Instead, most focus on scaling their business to produce as much as possible while generating maximum profits. Entrepreneurs who adopt this focus on growth tend to view their company as an asset that they can cultivate and sell.
While some entrepreneurs aim to sell their businesses to the highest bidder, others prefer to retain ownership over their companies. Those who enjoy the ownership aspect typically organize their companies to run independently.
While most business owners do devise plans for their companies to flourish, they tend to be less growth-oriented than entrepreneurs. In fact, many small business owners tend to take a sentimental approach to their companies. Rather than developing plans to sell off their company and make a profit, they view their business as their own.
Usually small business owners are so involved with their business on a daily basis that they rarely have elaborate plans to sell off their company or market it to an investor. In many cases, the only way they might consider selling involves passing the business down to another family member.
Entrepreneurs are rarely satisfied with their business's status quo. Instead, they want to design better products, reach larger markets, and make a major impact as soon as possible. That's why they tend to take more risks than small business owners do.
Although entrepreneurs are celebrated for their tendency to take risks, the chances they take are much more deliberate than you might think. They rarely embrace risk blindly. Entrepreneurs understand how to assess the potential positives and negatives, and they tend to take risks when doing so can help them get closer to their goals.
As a general rule, business owners don't avoid risk completely. When they do take risks, however, they tend to have an overly cautious approach. They take care to assess the risk to the company and consider all the downsides. When the potential problems appear small and the payoff seems virtually certain, they are more likely to move forward.
That's because small business owners tend to prefer slow, steady progress over explosive growth. They typically opt for incremental evolution that offers clear benefits over sudden changes with uncertain outcomes.
No matter what type of company they have, small business owners tend to be less technical than entrepreneurs. Business owners often focus on more practical sides of running a company, such as projecting revenues and calculating profit margins.
In contrast, succeeding as an entrepreneur generally requires technical skill and a drive to use their knowledge to generate value. As a result, many entrepreneurs become passionate leaders who strive to share their skills and knowledge with others.
Most small business owners operate at a comparatively slower pace. Many business owners develop to-do checklists that focus on weekly or daily tasks, and they accomplish them one by one. That's because the majority of business owners are closely involved in the everyday operations and management of their companies, including overseeing employees and interacting with customers.
When they make big plans for their company, business owners typically think in terms of the upcoming month or quarter. Then they translate their quarterly goals to daily and weekly tasks.
Unlike business owners, entrepreneurs tend to think big when it comes to plans. Rather than planning one week at a time, they typically plan for the next six months or year. They often leave the day-to-day planning to their teams while they focus on long-term growth instead.
In some cases, this planning strategy is essential for entrepreneurs, especially if they plan to seek funding from investors. In other cases, this method is a result of an entrepreneur's drive to accomplish more and meet goals more quickly.
Many of the ideas of an entrepreneur are new; however, they also tend to build upon an already existing idea to improve it. They are looking to create products and services that are more helpful to people as well as very profitable.