Entrepreneur or Small Business Owner? Is There Really a Difference?


The line between being an entrepreneur and a small business owner (SBO) is a hazy one. Entrepreneurs are defined by their ability to conceive, develop, and manage a business venture. It is generally an innovate idea that they bring to the market with aspirations of turning a profit that sets entrepreneurs apart from the rest of the pack.

However, when starting out, an entrepreneurial business is technically a small business.

Until they reach a point in which their innovation becomes a proven commercial success, an individual may consider herself an entrepreneur or even a “serial entrepreneur” if they are involved in the conception and launch of multiple ventures, like Joanna Gaines of Magnolia Market.

So, what is a small business?

According to the Small Business Administration, a small business is defined by its average yearly revenue and number of employees – “A small business must make between or below $750,000 to $35.5 million and have between or below 100 to 1,500 employees depending on the industry.” A common contention is that a small business must have below 500 employees but as we can see that is not the case. And while 1,500 employees may seem like a lot, think of a manufacturing plant, that’s minuscule compared to a business titan like Amazon which employees 566,000 employees around the world.

What SBOs and Entrepreneurs Share

Some make a distinction between SBOs and entrepreneurs stating that the latter is primarily concerned with “big picture ideas” while the former is committed to the regular tasks of running a business.

Yet this is not entirely true because SBOs, in order to remain viable and competitive, must be big-picture thinkers as well. They must be able to make predictions about the business, one, five, or ten years or more out. They must be able to foresee and respond accordingly to changes in trends, client needs, suppliers, and the economy.

If they were sitting at their desks focused on the tasks before them they’d miss out on growth opportunities or impending threats to their businesses.

Both entrepreneurs and SBOs work diligently on the day-to-day operations of their businesses. The smaller the staff a business has the more responsibilities that they must see to themselves. This could be anything from updating their website to creating new products, tracking sales, or adjusting the budget to reflect future growth or decline.

Where SBOs and Entrepreneurs Differ

The greatest distinction between entrepreneurs and SBOs would have to be the level of risk an entrepreneur takes in their new venture. Once a business is established, there is less need for great financial risks.

But when you’re just starting out, you’re stepping into the unknown and you have to convince people to trust you and believe in your product or service. You are putting yourself out there in a way that can be vulnerable. It’s your time, money, and reputation on the line.

That said, the next obvious difference between an SBO and an entrepreneur is that the small business owner has become established and created a steady business model. They most likely conduct business outside of their homes; they have repeat sales, consistent clients, and employees.

Rather than being preoccupied with the grind of getting a concept up and running, the work pace for an SBO can be slower and steadier. Because entrepreneurs are hustling to get their ideas out there before the competition beats them to the punch, they must work at a faster pace than an SBO.

That’s not to say that small business owners aren’t concerned with competitors—they must be. But the day-to-day work environment does not move at the breakneck speeds that entrepreneurs must.

Aside from that, the distinction some have made between the two are soft-edged. If you’re in business for any amount of time you will fluctuate between times of high growth and slower, incremental growth or between high risks and low risks.

Regardless, you can count on working hard, being invested in your success, planning and strategizing, and keeping your business relevant and competitive.

Ultimately, it may not matter much how you define yourself as long as you are filling a need and turning a profit, you will be a success as an entrepreneur or small business owner.



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