We refer to ourselves as entrepreneurs but how many of us are sure what that really means? Is it defined by the work that we do? The way we do it? Is it about the role of work in our lives? Are we entrepreneurs because of the reasons that drive us to do what we do? With lifestyle entrepreneurs proliferating on social media in their Lamborghinis and Lear Jets, entrepreneur seems to be the label-of-choice for anyone wanting success, and aspiring to something other than a 9 to 5 job as the route to get it. I think there’s more to it than that though.
“Entrepreneurship is about turning what excites you in life into capital, so that you can do
more of it and move forward with it.”
Richard Branson is often referred to as an entrepreneur. Much of what defines him, and many others like him is the passion he brings to solving meaningful problems for other people, via each of his business ventures. Few would argue that his successes are as much about the businesses he has created and which he owns, but he’s more than just a business owner.
When describing ourselves as entrepreneurs, I believe it all comes down to the ethos that we apply to work, making money and making a difference to the world. The money, success and freedom all follow when you’re turning your passion into your profession rather than working as an employee to assist someone else in fulfilling their dream. Another characteristic that many entrepreneurs seem to share is a spirit of creativity and innovation.
“All artists are entrepreneurs. All entrepreneurs are artists.”
– Seth Godin
Being an artist isn’t restricted to the creation of art such as paintings, sculptures or poetry. In this sense, being an artist means the act of creating things from ideas. It means making something new, a product, a service or a business that helps someone (or preferably a group of people) to solve a problem that they have in life.
That may be achieved by helping to address a shortage of housing or by creating and delivering a training course that will help others to develop. It may happen by writing a book that will teach a skill, or creating a product that will make others’ lives better, happier or more fun. The world is full of problems waiting to be fixed; the entrepreneurs amongst us are there to help solve those problems and fill those needs.
Certainly, some business owners will be entrepreneurs, and many entrepreneurs will own businesses. The two things are not always the same thing though. Here are some of the key differences that I’ve observed between business owners and entrepreneurs to help demonstrate what I mean.
The spirit of exploration – Generally speaking, business owners pursue a proven path through their working life. Their purpose is to lead the business and guide its activities towards the pursuits of profitability, increased revenue and (hopefully) customer satisfaction. As long as the numbers are trending in the right direction, they are assured a stable and rewarding existence. This drives their priorities and their purpose.
Entrepreneurs on the other hand, believe in carving out their own path. They control their own destiny and follow their passions by seeking out opportunities to serve others. When done well, they know they can make a living in the process. At the same time, they decide for themselves how they live and how they operate their business ventures.
The spirit of innovation – Business owners tend to be operationally focussed and are content to provide conventional products and services as long as there’s a demand for them. They operate via conventional channels and do things the way they’ve always been done, provided they are still profitable.
Entrepreneurs are driven to disrupt, to shake things up and to blaze new trails. They are equally comfortable being first in a new market or bringing a fresh new approach to an existing market. The key driver for them is to ensure they can exercise initiative and innovation rather than sticking with what is safe and proven.
Key Differences Between Business owner and Entrepreneur
The following are some of the many differences that I see repeatedly in comparing business owners and entrepreneurs. This isn’t to knock one or the other. It highlights some really interesting traits and characteristics that make some people better suited to entrepreneurship than others.
1. An entrepreneur may innovate through a start-up company, or on their own. The key thing is that they use unique and innovative tactics and strategies to do so. They will embed their own ideas and personality in the start-up, making it a reflection of their goals, values and priorities. Business owners are content to start a business based on a traditional or proven business model or idea as long as it will make them money. If it’s not broke, don’t fix it!
2. A business owner will carve out a niche for his business in the existing marketplace through diligence and hard-work. An entrepreneur may be equally hard-working but will also bring creativity and a fresh viewpoint. They may need to create a market for their business where one didn’t previously exist.
3. The business owner responds and reacts to market conditions and regulations, enjoying the peaks and riding out the troughs. The entrepreneur strives instead to lead in their chosen marketplace or preferably create a new market around their
4. The business owner is driven mainly by numbers, ratios and Key Performance Indicators. They steer their business using these alone. An entrepreneur understands the numbers, but also values their own intuition in making decisions and choosing
what to do next.
5. Business owners are reluctant to blaze the trail. They’ll respect and even imitate the actions of competitors, preferring to stick to the path taken by others like them to maintain stability and avoid potential mistakes. A true entrepreneur embraces the risk of failure as a chance to learn, grow and strengthen their business and themselves for the future. They treat failure and chaos as an inevitable part of life.
6. Business owners prefer to stick with conventional ways of working, and with what they know has worked in the past. Innovation is seen as a necessary evil, part of keeping up with the modern world and protecting market share. Entrepreneurs are more inclined to explore new ways of doing things just in case they offer opportunities for growth, or a better way of serving their customers.
7. The key driver for a business owner is to maximize profit above all else. Money matters to entrepreneurs too, but they are more concerned about meaning, value and meeting the needs of their customers. If these are given due attention, the money follows.
8. Competition is a big factor for the business owner; fighting for a share of a crowded market is a constant battle. The opportunities to differentiate their business are limited to the constraints of the market. Entrepreneurs are focussed on innovating and stretching into new markets, dominating, disrupting and making the market their own. They focus on doing what they do, and being the best at it.
9. The business owner has just one role; to own the business and to maintain its position in the market. Entrepreneurs accept that their role is anything and everything that their business may demand of them each and every day. In performing (or overseeing) all the roles and guiding all the resources, the entrepreneur is synonymous with the business in all that they do and all that they are.
Neither one role is better than the other. To consider an entrepreneur as a manic, creative, undisciplined ideas-machine would neglect that they have to make a living just like everyone else. As I hope you can see, the main difference is in the overall ethos and focus that an entrepreneur has when compared to a conventional business owner.
Some will be more suited to business ownership, as much as they may want to be an entrepreneur. To be an entrepreneur, you must be comfortable with uncertainty, okay with the prospect of failure, and driven and passionate about doing something meaningful. Success will come as a result, rather than through being pursued in its own right.