Entrepreneur Definition

When it comes to starting a new business, one word comes up frequently: entrepreneur. But what is the exact definition of that term? Is there a difference between an entrepreneur and a business owner? 

Keep reading to find the answers to those questions and more. Plus, discover what steps someone should take to ensure the success of their own entrepreneurial journey. Finally, learn how ZenBusiness can help throughout the entire process. 

What is an entrepreneur?

The Oxford dictionary defines an entrepreneur as someone “who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.” 

Interestingly, Merriam-Webster reports that entrepreneur has been used throughout generations to refer to various types of individuals. For example, it was used in the 1800s to describe certain types of business people. And in the 1900s, entrepreneur could be used to describe someone who undertook any kind of activity, not just business. Finally, by the 20th century, entrepreneur had taken on the connotation of any sort of “go-getter,” I.E.: the “entrepreneurial spirit.”

For simplicity’s sake, however, for the sake of guides like this, “entrepreneur” typically refers to a person who starts a business and takes on risk to do so.

Entrepreneur vs. Business Owner

If “entrepreneur” describes someone who starts a business, then what is the difference between an entrepreneur and a business owner? Is there a difference between the two? 

The answer to this question is both yes and no. Any entrepreneur who owns a business is also a business owner. But not every business owner is necessarily an entrepreneur. 

Here are a few differences between the two terms: 

How their businesses are started and managed

Business Owners

Individuals can become business owners by purchasing, inheriting, or starting their own business. They may also be promoted to an ownership position from within a company for which they work. They often answer to boards of directors or other stakeholders regarding how to operate and manage their business. 

Entrepreneurs

On the other hand, entrepreneurs typically start their businesses based on an idea for an original product or service that may not yet be available on the current market. They are usually in complete control of when their business is started and how it is managed. 

What They Offer + Goals

Business Owners

Business owners generally run companies that offer products or services that customers already want and need. These offerings typically fit into current market demand. A business owner’s primary goals are profit and customer satisfaction. 

Entrepreneurs

Entrepreneurs often start their businesses to offer an original product or service that doesn’t yet exist on the market (or at least, one that is better or different in some significant way from current offerings). An entrepreneur still values customer satisfaction, but their primary goals are usually related to innovation, creativity, or marketplace disruption. 

Tips for Becoming an Entrepreneur

If someone is interested in becoming an entrepreneur, there are some tips for success to keep in mind, including:

• Research and develop the business idea.
• Study the competition.
• Create a great product or service. 
• Test the product or service (then test again). 
• Write a comprehensive business plan. 
• Secure the necessary funding. 
• Launch the business.
  • This includes everything from social media marketing to filing the proper paperwork with the Secretary of State. 
• Learn everything possible about entrepreneurship, and never stop learning. 
• Set goals, limitations, and boundaries within the business (otherwise, an entrepreneur may wind up feeling like they never get to “clock out”). 

Entrepreneur Benefits

Entrepreneurship has several advantages. There are also some potential pitfalls and considerations entrepreneurs need to know about. 

Advantages of Entrepreneurship

The advantages of entrepreneurship can include: 

• Freedom
• Creativity
• Escaping the corporate structure
• Opportunity for someone to be their own boss
• Developing products or services that are truly unique and one-of-a-kind
• Pride for creating an independent business
• Financial profit if customers love and buy the company’s products or services

Disadvantages and Considerations About Entrepreneurship

Some of the disadvantages or potential pitfalls of entrepreneurship include: 

• Being an entrepreneur requires hard work 
• There is significant financial risk involved with entrepreneurial endeavors
  • This is why it’s important to research and test products to help ensure there will be a demand for them.
• Everything is on the entrepreneur’s shoulders (lots of responsibility)
• Entrepreneurs often feel like they never get to “clock out”
  • It is crucial to set goals, limitations, and boundaries.

Recommended articles

• Which Is Better: Employee Or Entrepreneur?
• QUIZ: Are You Meant To Be An Entrepreneur?
• What Is a Social Entrepreneur?
• Would You Make a Great Entrepreneur?
• Employee Or Entrepreneur – Which Are You? A Checklist

ZenBusiness Can Help

Being an entrepreneur is exciting; it’s a chance to create and offer products and services that the public may have never seen before. It’s not easy, though; an entrepreneur needs a go-getter mentality and a lot of grit. Thankfully, no one has to navigate the journey of entrepreneurship alone. ZenBusiness is here to help. They’ve got a variety of business formation plans to help entrepreneurs back up their idea with a registered business entity. And once the company is up and running, their Worry-Free Compliance Service can make it simple to keep the company compliant with state requirements all year long.