Entrepreneurs and business owners both manage businesses, but there are a few important differences between them. Understanding these differences can help you decide which role might be right for you if you are considering owning a business or starting a company. In this article, we will look at the distinctions between a business owner and an entrepreneur and explore what each does in their career.

What is a business owner? 

A business owner is someone who owns a business that provides a product or service to meet customers’ needs. They usually have a strong understanding of their industry and know who to target with their products from the start. A business owner might take over a business that is already running, or they could start a new business with help from other professionals. 

Another key point is that business owners make a profit from the success of their business, which is often their main source of income. Their primary responsibility is managing the business, and they are able to support themselves financially by overseeing its operations.

What is an entrepreneur? 

An entrepreneur is someone who starts a business based on a new idea for a product or service. Entrepreneurs often build their companies from scratch and seek support, such as funding from investors or help from suppliers. Entrepreneurs may take on more risks because they start with smaller networks and fewer resources. Many rely on other income sources while their business is still growing since it takes time to gain customers and turn a profit.

Entrepreneurs focus heavily on innovation, aiming to create products or services that don’t yet exist in their market. This innovation can require time and effort before the business becomes profitable, as they often need to heavily promote their offerings to attract customers.

Key Differences Between a Business Owner and an Entrepreneur  

1. How They Start? 

Business owners might acquire their position by buying, inheriting, or starting their own company. They could also take over a family business when the previous owner steps down. 

Entrepreneurs, on the other hand, create their companies from original ideas. They are responsible for managing all aspects of the business from the ground up. Their business does not belong to anyone else before they start it.

2. What Their Companies Offer? 

A business owner usually runs a company that sells products or services that meet existing customer needs. These offerings typically fit into the market easily and respond to common demands. Business owners might not always be passionate about the products they sell, focusing more on ensuring customer satisfaction.

Entrepreneurs, however, aim to sell new and original products or services that aren’t currently available. While customer satisfaction is important, their primary focus is on creativity and innovation. Entrepreneurs are often deeply familiar with and passionate about the products they offer.

3. Who Is in Charge?  

While business owners are the top leaders in their companies, they often have to work with other professionals like stakeholders, investors, or board members, who may have input on how the business is run. Business owners frequently collaborate with others to manage their companies.

Entrepreneurs, in contrast, have more control over their businesses because they start them from scratch. They can decide how much to involve other professionals and maintain full control over business decisions and daily operations.

4. How They Handle Risk?  

Business owners who have been in their industries for a long time are usually cautious about taking risks. They may have a team of analysts to help them identify and respond to risks, and they are careful because any risk could affect their established customer base and operations.

Entrepreneurs are often more open to risk since their businesses are new and unique. They may have fewer examples to follow, allowing them to make decisions based on their goals and ideas rather than on avoiding risk. This willingness to take risks can help entrepreneurs succeed by enabling them to make bold decisions that help their business grow, even if those decisions carry some risk.

5. What Their Goals Are? 

Business owners focus on maintaining their profits and running their business smoothly. They often look for ways to make their operations more efficient to sustain their success. This helps them meet their profit goals and adapt to changes in the market.

Entrepreneurs, on the other hand, are typically focused on growing their business. Since their companies are new, they must work on building networks, attracting customers, and increasing their market presence. Their goal is continuous growth and identifying new ways to expand their business and increase profitability.