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What’s the Difference Between an Entrepreneur and a Small Business Owner?

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Small business owners and entrepreneurs aren’t always the same thing. Learn why.

Key takeaways

  • Entrepreneurs tend to take big risks, have big-picture visions, and want to make a difference.
  • Small business owners are often happy filling a need locally and supporting themselves.
  • We need both in the world to meet the needs of our communities.

Small business owners and entrepreneurs. It’s common to use these terms interchangeably, and people are doing so more frequently as an increasing number of Americans go to work for themselves. 

According to recent data from Pew Research, 15 million U.S. workers are self-employed, making up around 10% of the entire U.S. workforce. 

As the gig economy grows, millions of people are now working as independent contractors or freelancers to create their own schedules and earn money on their terms. It seems like everyone has become an “entrepreneur” overnight. 

But “small business owner” can mean something drastically different. And, just because you run a small business does not mean you’re an entrepreneur. This guide dives into the differences.

Just because you run a small business does not mean you’re an entrepreneur.


What is a small business owner?

Let’s start with small business owners. When you hear this term, you may think of someone running a bakery or a local furniture artisan. 

A small business owner typically starts a business within their local area to provide a service to a specific target audience. It’s a fairly simple definition: Small business owners deliver specialized products or services to those who need it in a specific community.

Small businesses are independent businesses with fewer than 500 workers. According to the Small Business Administration, there are more than 33 million businesses that meet these requirements in the U.S. in 2023. This means that 99.9% of U.S. businesses are small businesses.

Some small businesses form based on an individual’s passion or experience. Maybe they decide to go it alone and make a bigger impact, or inherit a mom-and-pop store from their relatives. Small business owners are usually concerned with delivering value to their local communities, or some national niche community, in one way or another.


What is an entrepreneur?

Now, entrepreneurs. These people have big ideas. They love thinking about new technologies that will scale their businesses or be the next big thing. They probably think a lot about their wildly successful future, and they’re always planning ahead and networking in their industry. 

The Global Entrepreneurship Monitor found that there are more than 33 million entrepreneurs in the U.S. Entrepreneurs are your startup founders and your Silicon Valley tech experts looking to create the next Facebook or Tesla.

Entrepreneurs are your startup founders and your Silicon Valley tech experts looking to create the next Facebook or Tesla.

They may not have such a narrow view of their target community and hope to extend to several different groups and locations, even on a national or global level.


How entrepreneurs and small business owners are different

Both entrepreneurs and small business owners can own a small business, which is where the confusion usually sets in. But what separates a small business owner from an entrepreneur is the way they think about their company and how they approach business. Here are the key areas where the differences lie.

1. Risk

This is probably the most significant difference between the two. Entrepreneurs take big risks and are focused on high, fast growth. Sometimes these ventures pay off, and sometimes they don’t. But the risk is part of the appeal. Entrepreneurs are thus more like gamblers in a business sense.

Small business owners tend to go with what they know and avoid things that could turn into business problems. Small businesses can be risky to start, but they usually have a modest trajectory based on available resources and grow steadily as they gain customers and get the word out about their services.

2. Big-picture ideas

Entrepreneurs are dreamers. They might have a vision that goes far into the future. They see a need in the market and aim to fill it in a way no one has ever tried. Their goals extend well beyond the end of the year and may reach many years down the road.

“Small business owners focus more on the now, and their dream is often within reach.”

Small business owners focus more on the now, and their dream is often within their reach. They are more concerned with day-to-day operations, maintaining healthy cash flow, and successfully filling their role in the community. 

3. Innovation outlook

Entrepreneurs are always looking for the next new thing and spend a lot of time researching technology and innovation. They can’t get enough of what’s new and hot, which is why they’re at the forefront of huge movements.

Small business owners know what works for their businesses and stick with it. They know how to establish continued success. They’ve filled the niche they set out to fill, and there isn’t often a need for them to push further.

4. Scalability

When it comes to entrepreneurs, most dream that their companies will one day make it big. They don’t necessarily want to run the day-to-day and may even hope to sell their business someday.

Small business owners may be more sentimental when it comes to their companies and wouldn’t dream of handing them over to someone else. They love where they are and don’t want to jump to the next big idea once they’ve gotten what they can out of one venture.

5. Vision

Both entrepreneurs and small business owners can be passionate about what they do, but usually for different reasons. Small business owners often want to support themselves and their families and to have the flexibility to work for themselves. Entrepreneurs are often after change. They want to make big waves. They want to make their mark. And they want to be heard. 


Are you an entrepreneur or a small business owner?

The bottom line: Entrepreneurs take risks and are more focused on the big picture than small business owners. 

The good news is that we need both entrepreneurs and small business owners in this world. Not every company needs to turn into an enormous success. Some are better left small, and that’s where they stay. We need local businesses in our communities just as much as we need innovative startups.

If you’re thinking about starting a company or are already a business owner, consider which route is best for you. You may realize that your vision, goals, and values align more with that of a steady small business owner versus a risk-taking entrepreneur. Or you may quickly come to terms with your big-picture passion.

Wherever you fall on the spectrum, it’s important to focus on what you really want and the steps to get you there. It’s not easy to start a business, but it will all be worth it when you can work for yourself and build something you’re proud of.

Pro tip: Update your content. Whether you are a small business owner or an entrepreneur, contact ContentBacon to learn how our inbound marketing services with better messaging can help you reach your goals.

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