A lot of people do not realize that there is a difference between being an entrepreneur and a small business owner. Starting a business on your own or aspiring to do that does not make you an entrepreneur. Business consultant get confused when deciding whether to use an entrepreneur or small business owner and even use the two terms interchangeably sometimes—however, there are definitely some differences present in what it means to be either a small business owner or an entrepreneur which are important and need to be understood before you call yourself either of these terms.
Starting with the most basic difference academics has to offer, take a look at the Merriam Webster dictionary’s definitions of the two terms:
Owner: “A person who owns something, one who has the legal or rightful title to something, and one to whom the property belongs to.”
Entrepreneur: “One who organizes, manages, and assumes the risks of a business or enterprise.”
The obvious difference between an owner and an entrepreneur is that being the owner is related to possession of the business or start-up while being an entrepreneur is said to be related to the management and ensuring functionality of the business or start-up.
Both- small business owners and entrepreneurs – have small businesses of their own, but there are stark differences in terms of the motivation behind the startup, leadership style, long-term plans regarding the maintenance and growth of their business, etc. There are a lot of differences but these differences do not necessarily have to mean that anyone is better or more important than the other; they are just different, but also equally as important to the economy of the world.
A most commonly noticed difference between small business owners and entrepreneurs is that the small business owner’s presence and contribution are crucial to the survival of the business. Without the owner, the business will either cease to exist or suffer great losses in terms of money and/or consumer base. Whereas an entrepreneur is more likely to aim to build something where generating revenue and consumer benefit does not depend on the regular presence of the owner. And even though the owner is likely to be the main part of the business at the very start, with time progression the ultimate entrepreneurial goal will most likely be to make it so that business and the connected supporting systems are well enough to function on their own, independent from the founder or owner.
Another difference is noticed in the form of the vastly different approach small business owners have towards their business as compared to the approach and mindset entrepreneurs have. Small business owners hold and stand steady, and when they have to walk, they walk by taking small and calculated steps. They avoid risks and aim small with the hope of moving forward, even if not taking that risk may mean the result will not be as big and as magnificent. They are fine as long as the business is running steadily and smoothly.
However, entrepreneurs step out on the ledge and jump with both feet, they are also more likely to dive in head-first. Entrepreneurs love taking risks and are not afraid of risking whatever, whenever they think taking a risk is what they need and what could get them closer to their next milestone.
Where small business owners are satisfied with running day-to-day and will most likely be found planning their week in advance, managing employees, making to-do-lists, networking, basically making sure everything is rolling smoothly in the present—entrepreneurs are most likely to be thinking six months into the future; long-term management plans, the future of the company, the next “Big Thing” or the next milestone, focusing on scaling as they know they want to grow and they will do their best to find a way to do just that.
Before starting a business, small business owners have a great idea and they plan accordingly. They know what their end-goal is and what their target audience wants and they figure out ways to serve their target audience and keep the customers happy. Their ideal vision is of a predictable, risk-less system; employees working properly in the way they are supposed to, customers paying on time, everything working out in the smooth and predictable way it was designed to.
On the other hand, entrepreneurs base their business on their big, wild, unpredictable ideas. One thing you will always hear about entrepreneurs is that they are never happy with the status quo and are always striving to eliminate weak links in the industry and solving customer problems by continuously working on the next thing, the next plan, and the next idea. They are not afraid to work on undiagnosed, untested, more likely to fail idea as most commonly their businesses and ideas are born out of noticing a need for that specific business or idea, not for a way to make money or to generate some type of profit.
Basically, small business owners have an idea they want to market and hopefully profit on, while entrepreneurs have a problem they need to solve or a need they want to dissolve.
In conclusion, small business owners are needed to hold and maintain the economy while entrepreneurs are needed to propel it forward. One is not better or worse than the other and both are important for economic and industrial growth. Whether or not you are a business owner or an entrepreneur depends on some questions you need to quiz yourself on, such as:
- Do you avoid failure or would you risk failing a dozen times for what you are most driven to do?
- Are you fine with one or two stable franchises which bring in enough revenue to put food on the table, or do you want to expand as much as you can and reach and help out as many people as you can?
- Do you have one great idea and a goal based on that, or do you have several big ideas and an ever-expanding array of goals?
- Do you risk your money only if there is some probable profit in the equation or are you prepared to work towards your big idea for long periods of times without any revenue coming in through the door?
- Most importantly; do you have a plan, or do you have a dream?