Key Differences Between Entrepreneurs and Small Business Owners

What are the main differences between an entrepreneur and a business owner? The answer is simple: entrepreneurs are future-oriented, while business owners typically focus on the present. Which are you – entrepreneur or business owner? Take the fast quiz at the end of this post and find out!

Entrepreneurs are the founders and creators of new products or services, while small business owners start a type of business that already exists within the marketplace. For example, an entrepreneur starts a revolutionary new type of equipment to cut hair, whereas a business owner opens a haircutting salon.

For example, when success happens for a business owner, he will think, “how can I make this continue?” But if success happens to an entrepreneur, she will be thinking about how it can lead her to even bigger successes in the future! So what might seem like a small difference actually has massive implications for your business.

Read on to learn more about the major differences between small business owners and entrepreneurs as defined by their work personalities.

Differences Between an Entrepreneur and a Business Owner

1- Entrepreneurs Make Money-Business Owners Maintain Income

Entrepreneurs are always looking for ways to make money while company proprietors have the same goal but company owners also focus on maintaining their business income to pay for operating expenses.

In order to be successful, a business owner needs the income from their firm whereas an entrepreneur’s goal is often to make money and then invest back to reinvest in the company.

The entrepreneur’s dream is not only to make sales but also to grow their enterprise. So they will reinvest profits back into their company to increase the size of the company.

Business owners tend to not have a big vision for what they want to achieve or build so it is more about maintaining the status quo as opposed to growing in terms of expanding their brand’s market share.

2- Entrepreneurs Have a Higher Risk Tolerance

Entrepreneurs are more likely to take on debt than small business owners and typically have much higher risk tolerance. They are comfortable assuming larger uncertainties to pursue new ideas and opportunities.

Entrepreneurs are risk-takers while store owners are more conservative. Many shop owners are happy with their current status and so they are less willing to take risky chances that could fail.

Business owners only make money while working, whereas entrepreneurs have more avenues for making income such as franchising or consulting. Manufacturers usually generate a steady stream of revenue and profits after being sold to new owners or taken over by a larger firm or competitor.

3- Entrepreneurs Start Businesses for Pleasure and Profit

Entrepreneurs start their own company because they love the idea of running their own business and don’t want or cannot work for someone else. Most people who become business owners do so because they need to provide financially for themselves and their family.

Businesses come out of necessity whereas new ventures are about excitement for new ideas and innovation.

Entrepreneurial types often have a more high-powered personality and exude confidence. Some company owners are less charismatic but they work hard to keep their company running smoothly rather than taking on new projects.

Entrepreneurs often have higher expectations of themselves and others around them – in the sense that they want to achieve success quickly while also being happy.

4- Business Owners Focus on Long Term vs Short Term Success

Business owners generally want to run a successful company that will be profitable in the long term, while founders are more focused on short-term success with the hope that it will lead to long-term success and a larger company.

Entrepreneurs focus on the big picture while small business owners tend to have a narrower view.

Businesses come out of necessity whereas entrepreneurship is about passion.

The difference between being an entrepreneur and owning your own company is that company founders are risk-takers who find opportunities in situations, where proprietors usually operate within their comfort zone, which limits their company growth.

Entrepreneurs tend to be more creative. This is because of the fact that they follow market trends and new technology. They get excited when they see a new market, whereas other executives are more focused on maintaining what they already have.

5- Small Business Owners Build Communities

An entrepreneur is usually less concerned about what other people think of them than a traditional businessperson would be. Their goal is to make money with their idea, but the goal of a business owner might be something else entirely such as creating a positive personal reputation in their town, running a nonprofit organization, or building their community by offering jobs.

Business owners tend to be more focused on the day-to-day operations whereas entrepreneurs tend to focus on what will make their money in the long run.

Since business owners are usually less concerned with how they can grow as an entrepreneur, and therefore do not spend time learning about marketing or sales. Those functions are outsourced to professionals – consultants or employees.

Entrepreneurs want to provide excellent customer service. Business owners, however, however, are primarily focused on investor relations and other strategies for growth that will please investors rather than customers. Entrepreneurs strive to make their company likable and trustworthy while small business owners focus more on profits and covering expenses.

6 – Business Owner Have Access to Bank Financing

A traditional businessperson has an easier time getting loans from banks than an entrepreneur does, due to their more cautious financial planning skills and realistic projections. Entrepreneurs’ startup funding is typically from their own capital, investors, partners, or venture capitalists. (Looking for proven sources of startup funding check out my list here)

A major difference between entrepreneurs and business owners is that brand founders need funding to start their new businesses, whereas most businesses already have some cash saved up, equipment or inventory that can be used as loan collateral.

Small business owners usually only borrow capital to make major investments such as buying a new building or expanding their production capacity.

Entrepreneurs are brave risk takers, but business owners have to be financially responsible and think about long-term strategies in order to succeed.

Do You Want To Be An Employee Or Entrepreneur?

7 – Business Owners Build Teams – Entrepreneurs Go Solo

Smart managers know that they can’t do everything themselves, so they hire others to help them out. Too many entrepreneurs try to do everything themselves. Entrepreneurs often do not hire employees unless it is absolutely necessary, while businesses almost always hire workers.

Entrepreneurs don’t mind taking care of all the details for their company – from accounting and marketing, down to sales – whereas business owners would rather focus on one or two critical management areas.

Management styles differ as well. Company owners are more likely to use a top-down approach, whereas entrepreneurs might be more hands-on.

Business proprietors typically have control over their company’s decision-making process and don’t need approval from others before investing capital into new projects or ventures.

Entrepreneurs tend not to have this luxury if they have funded their startup with investor money, accepted venture capital, or have many partners. (Looking for a business partner? Check out my pro tips on how to find a partner here)

8 – Business Owners Focus on Wise Resource Allocation

Entrepreneurs work hard at anything and everything that will bring in a profit, while store owners may not want to spend time on some things if it’s not likely to bring in any revenue in a reasonable time period.

Business owners and entrepreneurs both make detailed projections of future expenditures and profits, while entrepreneurs may not have the ability to do so accurately because there is no past sales history.

Entrepreneurs are willing to take risks in order to reap a larger reward down the road whereas company owners will play it safe for now with little chance of maximizing their potential.

Business owners build long-term success through consistency and careful plans; Entrepreneurs find success through taking risks and seizing opportunities. Managing owners have to worry about taxes, insurance, employees, marketing; Entrepreneurs only need to focus on their product or service.

Entrepreneurs are more likely than store owners to be financially independent of the company they own. So it’s easy for an entrepreneur to change his mind in order to pursue new projects.

9 – Entrepreneur Want Control – Business Owners Want Stability

Entrepreneurs want to be in control of their company, but most business owners would rather give up some control for stability.

Entrepreneurs work for themselves and can make all the decisions on how to run their firm, while business owners don’t always have control over every decision depending upon their employees, partners, landlords, and bankers.

Entrepreneurs are more adventurous and risk-taking than many business owners. They are often self-reliant, so they don’t rely on others to be successful as a small business owner might do.

Business owners and entrepreneurs certainly both want their company to succeed, but entrepreneurs are more willing to give up on the project if it’s not going well. Business owners can’t easily walk away from what they’ve created and know that giving up is risky because of all the time and money spent.

10- Entrepreneurs Are Creative – Business Owners Are Commodity

Entrepreneurs have to be creative with their ideas, while business owners can rely on what’s already been done before – improving upon a know business model.

New business ideas are the lifeblood of any entrepreneur’s business. The ideas they come up with are what sets their brand apart from others in the industry, and it can be tough to keep coming up with new ones all the time.

Business owners don’t necessarily need creativity because there is less risk involved if they rely on a product or service that someone else has developed and is already well-known.

Starting a new business is hard but could it be worth it for youCheck out my article about the hardest parts of launching and how to make it a bit easier and more successful for your new venture.

Take the Quiz: Are you a Business Owner or Entrepreneur?

Find out by answering these questions below.

Answer Yes to these three questions and YOU are an Entrepreneur:

1 – Are you the one who always thinks up ideas for new business or project?

2 – Do you have a love for what you do and work extra hard to make it happen?

3 – Are you willing to take risks in order to pursue your goals?

Answer Yes to these three questions and YOU are a Business Owner:

1- If someone offered to buy out your business today, would you be interested in selling it?

2- Do you enjoy managing people and are you able to delegate tasks?

1. Do you have a business plan with detailed financial projections in place?


We hope this list has helped you better understand the differences between being an entrepreneur and running a small business so you can understand yourself and how to best work with your natural talents. If you are considering starting your own company, we encourage you to do so!

Although it can be difficult at times, in general entrepreneurship is one of the most rewarding experiences that someone can have – it has been for me!

But if taking on all these challenges sounds too much for now or just not what you’re looking for, there’s nothing wrong with sticking to owning a small business either – which can be both enjoyable and profitable.

You’ll still get plenty of opportunities to grow while providing value to customers who need help solving their problems – as well as making money doing something meaningful.

Good luck to you – entrepreneur or business owner.

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