Happy National Entrepreneur's Day 2022! 💡💰💡

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National Entrepreneur's Day - Tuesday, November 15, 2022

Here's a riddle for you: If all entrepreneurs are business owners, why aren't all business owners entrepreneurs?

In honor of National Entrepreneur’s Day, I’m asking what the difference is between an entrepreneur and a small business owner.

Do you know?

I thought I knew, but it turned out I was wrong. (Okay, maybe half-wrong.)

My definition of an entrepreneur was someone who starts or invests in multiple ventures.

In my mind, an entrepreneur focuses on building something they can sell for a profit and a small business owner invests in long-term goals and stability.

The correct answer is more nuanced, and it seems like there are a lot of crossovers.

Both terms refer to someone who starts and runs a business. The fundamental difference comes down to two things: perspective and risk.

Entrepreneurial people are innovators. They’re creative thinkers who set aside the safety of established products and markets to pursue new ideas. They’re also willing to take on more risk.

Sometimes the risk comes from pursuing an untested idea, other times it’s the person’s lack of financing or experience.

Small business owners take a more moderated approach.

While there is always a certain level of risk involved with starting a business, small business owners mitigate some of the uncertainty by choosing proven products and established paths.

It seems pretty straightforward until you realize someone can start out as an entrepreneur and transition into a small business owner once they establish their idea/product/market and generate sustainable revenue.

They can also transition the other way if a small business owner branches out an established business into new products or markets.

With that in mind, how do you know if you’re an entrepreneur or a small business owner?

Start by asking yourself these questions:

  1. Did you start your business with a strong financial foundation or are you bootstrapping with sweat equity?
  2. How much time do you spend educating people about your product vs. regular marketing?
  3. Does your company provide familiar products/services — like clothes, groceries, accounting, or landscaping — or is your offering new or unique?

Maybe the most important question should be, “what do you call yourself?”

Do you think of yourself as an entrepreneur or a small business owner?

Is it a conscious choice? Something you’ve given careful thought and consideration, or an off-the-cuff response when someone asks what you do?

Perhaps you don’t make a distinction and use the terms interchangeably. (It’s okay, most of us don’t.)

In fact, after spending way too much time researching the subtle differences between entrepreneurs and small business owners, I’ve concluded it’s really more about mindset and goals than anything else.

Maybe that’s why all entrepreneurs are business owners, but only some business owners are entrepreneurs.

Categories: goals, newsletter, succeed, entrepreneur, small business