You may think small business owner and entrepreneur mean the same thing. But, if you’re running a business, you need to know these key differences.
Key takeaways
- Entrepreneurs take big risks, usually have a big-picture vision, and want to make a difference in the world
- Small business owners are often happy filling a need and supporting themselves
- The good news? We need both
Small business owners and entrepreneurs: it’s easy to use these terms interchangeably. People are doing so more frequently as more and more Americans are working for themselves. Pew Research found that 16 million workers identify as self-employed, out of a workforce of over 150 million. And, 16% of Americans have earned money from some kind of online gig.
In the growing gig economy, 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, and people throw the word around to define several different things.
"Just because you run a small business does not mean you’re an entrepreneur."
This post will walk through the difference between an entrepreneur and a small business owner.
What is a small business owner?
A small business owner typically starts a business within their local community to provide a service to a specific target audience. It’s fairly simple:
"Small business owners deliver a specialized product or service to those who need it in a specific community."
Small businesses are independent businesses with fewer than 500 workers, and there are around 32 million small businesses in the U.S.
Sometimes a small business forms based on an individual’s passion or experience, and they decide to go it alone and make a bigger impact. Often, a business owner will inherit a mom-and-pop store from their relatives. Small business owners are concerned with delivering value to their community in one way or another.
What is an entrepreneur?
An entrepreneur, on the other hand, has big ideas. They love thinking about new technologies or ideas that will scale their business. They want to think about their wildly successful future, and they’re always thinking ahead and networking in their industry.
The Global Entrepreneurship Monitor found that there are about 31 million entrepreneurs in the U.S., but over half of adults in the workforce have tried to start a business at some point in their lifetime.
"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 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. Let’s walk through these differences.
Risk
This is probably the most significant difference between entrepreneurs and small business owners. Entrepreneurs take big risks and are focused on high, fast growth. Sometimes these pay off. 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 often tend to go with what they know and avoid things that could turn into a business problem. While small businesses can be risky to start, they usually have a modest trajectory based on the resources they have and grow steadily as they get more customers and get the word out about their services.
Big-picture ideas
Entrepreneurs 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 before. Their goals often 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." They are more concerned with day-to-day operations, maintaining healthy cash flow, and successfully filling their role in the community.
Innovation
Entrepreneurs are always looking for the next new thing and are usually frequent visitors of technology and innovation sites. They can’t get enough of what’s new and hot, and that’s often why they are at the forefront of huge movements.
Small business owners know what works for their business and stick with it. They know how to establish continued success. They’ve filled the niche they’ve set out to fill, and there is no need for them to go further.
Scalability
When it comes to entrepreneurs, most dream that their company will one day make it big. They don’t necessarily want to run the day-to-day and may even dream of selling their business someday.
Small business owners tend to be more sentimental when it comes to their company and wouldn’t dream of handing it over to someone else. They love where they are and aren’t looking to jump to the next big idea once they’ve gotten what they can out of one venture.
Vision
While both entrepreneurs and small business owners can be passionate about what they do, it’s usually for different reasons. Small business owners often do what they do 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 in the world. They want to make their mark. And they want to be heard. It’s not enough for them to simply be successful, and money often is not always what they’re after. What they want is to make a big difference in a big way.
Entrepreneur or small business owner: Which one are you?
"The bottom line: entrepreneurs take more risks and are more focused on the big picture than small business owners."
The good news is that we need them both. Not every company needs to turn into the huge success that entrepreneurs often imagine when they get started. 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.
Whatever you call yourself, it’s important to focus on what you really want and the steps to get you there. It’s not always 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.
Whether you are a small business owner or an entrepreneur, contact ContentBacon to learn how our inbound marketing services can help you reach your goals for the future with better content.
