What’s the difference between an entrepreneur and a business owner, and why is it important? While an entrepreneur and a business owner will need similar skills, they make different decisions, create different business plans and employ different strategies to grow their businesses.
Realising how you identify with either one can help you to understand the type of business or industry you will thrive in. If you are a strong entrepreneur type, then opening up a small brick and mortar, owner operated, or online Etsy type shop may not be enough to satisfy you.
You’ll know you’re an entrepreneur if you’re constantly dreaming of opening up a chain of stores and growing your business into a global company.
If you are a strong business owner type, launching a tech start up, or any business that involves a high level of risk and uncertainty, may be too overwhelming, or too chaotic for you to ever feel comfortable. You’ll know you’re a business owner if you prefer not to hire staff unless you have to, or value security over growth.
So before you starting thinking about your business, if is useful to see which of the two you identify with:
Generally speaking, a business owner is someone that wants to work for themselves and replace their income with their passion.
A business owner may be happy to stay small or online based and concentrate just on meeting basic targets of sales and income levels. They may hire staff as needed, though are likely to stay as a sole operator. They value security, and may start their business while they still have a day job. They aim to build a long-term business. Their views of assets are usually real estate and inventory. They usually prefer things to be planned out and structured.
An entrepreneur is all about growth and big ambitions. They want to scale their business or company by hiring employees, breaking into new markets and setting up in new locations. They are likely to look for investors to help them do this, and believe in spending money to make money. They are open to taking risks and actively seek out new opportunities, often being involved in several projects. Their views of assets are usually employees and customers. They often thrive in chaos.
Both groups are usually passionate, driven and motivated. They strive to create something that the world will enjoy using. They like to make decisions. Both can absolutely build great and successful businesses.
It is important to understand the difference between being an entrepreneur and being a business owner.
Identify your strengths and preferences, and work towards those. Knowing what you will be drawn to will save you from making decisions that conflict with your values or personality.
Generally speaking, a business owner’s primary motivation is to make a living through regular income by working for themselves. They usually self fund, or use bank loans to expand. They usually work in the day-to-day running of the business, and see it as a long-term project.
An entrepreneur is looking to make a change or an impact; to create value. They are willing to forego regular income for the goal of value upon exit. They are usually funded by investors, and are comfortable with taking risks. They are fast paced and focus on growth. Their role in the business is usually focused on strategy and growth, and they hire others to do the day to day running.
Entrepreneurs are often involved in different business and projects, and see projects more short term than long term.
How do you identify? Does that match your current business or future business plans? If not, how can you adjust your plans to align them with your own goals and values?