We use the terms entrepreneur and small business owner interchangeably. Are they the same or is there a difference? I decided to do some research to get answers to these questions. My findings say that an entrepreneur and a small business owner (SBO) are not the same thing; therefore, we cannot use the titles in their entirety.
Although you start out as a small business owner, somewhere along the way you stay as an SBO or become an entrepreneur. If you’re satisfied with making enough profit to live a comfortable life and keep your business afloat, chances are you’re a small business owner. This type of income replaces your income stream, which you earned from traditional employment. You are not really interested in growing or expanding your business. You will most likely keep the business in your family.
Perhaps you are not satisfied with the status quo, are very ambitious, and have the drive to go beyond just survival. You would fit the definition of an entrepreneur. You will take more risks. Entrepreneurs enjoy learning through growing and expanding their businesses. Some set up businesses for the purpose of reselling after realizing a certain amount of wealth. It can take a lifetime for a small business owner to earn wealth compared to about five years for a successful entrepreneur.
Another difference is how innovative you are. Small business owners are not the “think outside the box” type; while entrepreneurs come up with new ideas, innovations and products, as well as build strategic and creative marketing plans.
If you are the type to work your own business, you would be considered a small business owner. You are more repetitive. On the other hand, if you tend to work strategically on your business, evolve it, change the target market, if necessary, you are an entrepreneur. As an SBO, it tends not to change markets. Also, their markets may be more general compared to entrepreneurs whose target markets are more focused.
Regarding staffing, if you are a small business owner, you may have employees, which would mean having to pay for employee-related expenses; such as benefits and taxes. As an employer, you may choose to work with independent contractors instead of having employees work for you.
There are some of you who tend to have characteristics of both groups. For example, as an entrepreneur, you may choose to keep the business in your family, just like a small business owner, rather than sell it. In addition to having this in common, there are similarities in the operation of their businesses. Both have to do some degree of advertising and marketing, as well as day-to-day administrative functions.
In general, one notable difference is that as a small business owner, you tend to need motivation; whereas, if you can be described as an entrepreneur, you are driven by ambition, drive and inspiration. Although there are similarities between the two groups, based on the results of my research, the two terms are not interchangeable and there are significant differences.
