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 you should take to ensure the success of your own entrepreneurial journey. Finally, learn how we can help throughout the entire process.
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, when we use the term entrepreneur in business, we are typically referring to a person who starts a business and takes on risk to do so.
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:
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.
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.
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 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 / different in some significant way from current offerings). An entrepreneur still values customer satisfaction, but their primary goals are usually related to innovation, creativity, and / or marketplace disruption.
Interested in becoming an entrepreneur? Here are some quick tips for ensuring your entrepreneurial journey is successful:
Entrepreneurship has several advantages. There are also some potential pitfalls and considerations you need to know about.
The advantages of entrepreneurship can include:
Some of the disadvantages or potential pitfalls of entrepreneurship include:
Being an entrepreneur is exciting. It involves creating or offering products and services that the public may have never seen before. However, you’ll need a go-getter mentality and lots of grit to be successful (not to mention product research, funding, etc.). But we know you’ve got this!
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Ready to Start Your Business?