Small Business Owner vs. Entrepreneur: What’s the Difference?
Small business owner vs. entrepreneur: What’s the difference or are they the same? This question is something I have been struggling with for a while, not because I don’t know the difference, but because I think it is very hard to define. The main reason for that is the challenge in defining an entrepreneur. The term is becoming overused and almost generic. Almost everyone that I know who starts a business calls himself or herself an entrepreneur. From friends who started making baby/kids clothing, to lawyers who started their own practice to people who started websites and blog to those starting their own companies; everyone calls themselves an entrepreneur.
I recently posted this question on the KAYWEB Angels group page and received some interesting responses. However there seems to be some common thoughts between all of the answers, which are that an entrepreneur is about creating change and having a vision often bigger than their company. These are two unique traits to entrepreneurs that can differentiate them from a small business owner.
Both small business owners and entrepreneurs are risk takers. In many cases, these two groups put their financial future at the mercy of their business. Taking out mortgages or lines of credit, running up credit card debt and borrowing from friends and family are pretty common for people starting a business. But what differentiates the small business owner from the entrepreneur is the vision and the mindset. Small business owners want to build a business where they can work for themselves, make money for themselves instead of someone else and support their lifestyle. Entrepreneurs dream of creating the next great platform that will change how people do things. For entrepreneurs, the thought of a small business never enters their mind, as they are always dreaming of creating the next Facebook or changing an industry. While their business may grow and level off as a small business, the mindset of an entrepreneur is to pivot or create the next great idea beyond their original one.
A great example of this is someone who wants to create a kids clothing store. The small business owner will buy other people’s fabric and designs and use them to create the standard shirts, hair clips, smocks, towels etc. The entrepreneur will dream of creating a new product that can change the way kids clothing functions, such as a new type of clip that is childproof or shirt that is stain proof, or a new way of producing or marketing the clothing. While small business owners may consider themselves entrepreneurs, they lack the vision and passion to be unique and create a new way of doing things.
While these two things may set small business owners and entrepreneurs apart, there are probably numerous ways to differentiate the two, including comparing the strict definitions of the terms. But to me, the difference is greater than the definitions; it is about a mindset and a little bug inside of you that says, “I am an entrepreneur.” It is something that other entrepreneurs can sense and it makes you part of the entrepreneurial community. That feeling and sense of community is something that serves as a true differentiator.
