Are you an entrepreneur or a business owner?

by Kelly Deis of SoundPoint Consulting

Have you ever wondered what distinguishes an entrepreneur from a business owner? Maybe not.

But if you are a business owner, it behooves you to know the difference and to be comfortable with who you are.

Obviously, all entrepreneurs are business owners. But not all business owners are entrepreneurs. What is the difference? 

The dictionary defines an entrepreneur as one who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.

Most business owners I know have initiative and take risks.

Investopedia expands the definition to include, “The business idea is usually a new innovation, product or service, rather than an existing business model.”

There can be a fine line between an entrepreneur and a small business owner. This is how I think about the difference:

Entrepreneurs take risks with the hope of high returns amid great uncertainty. In most cases the product or business model is unproven. There is no guarantee of market acceptance, or that a moneyed competitor won’t usurp the entrepreneur’s good idea.

In general, entrepreneurs have passion and a vision to identify a unique business opportunity. And, they are willing to put their financial security at stake, investing time, effort and money into a project with uncertain potential. Lastly, they look for rapid growth and often transform their market in a significant way.

Business Owners usually work with established products & services with known risks. Their growth is measured and often self-funded; profitability plateaus. While business owners may not be passionate about their business, they work hard and are generally happy not working for someone else. Unlike entrepreneurs, business owners do not transform their market.

Although entrepreneurship generally finds the person, it is important to understand if you have the makings of a good entrepreneur.

Do you have the passion and vision coupled with the personality (tenacious, self-confident, risk and ambiguity tolerant, flexible and irreverent) to see your business idea from concept to fruition?

Or, are you satisfied with the independence, stability and lifestyle of being your own boss?

Both entrepreneurship and business ownership have their rewards and challenges. It is not intrinsically better to be one or the other.

A bad entrepreneur can lose a lot of money while a frustrated small business person is unfulfilled.

Best to know the role that will give you the greatest satisfaction before you spend too much time and effort pursuing someone else’s dream.


Kelly Deis is president of Soundpoint Consulting, based right here in Kitsap County. She earned an MBA at the Wharton School, and offers services as a Certified Valuation Analyst and Certified Exit Planning Analyst. She also helps clients develop a differentiating strategy. 

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