Business Owners v/s Entrepreneurs: How are They Different?

For an organization to function effectively, various roles are allocated to employees based on their skill sets and experience levels. While the essential tasks of some of the positions may be very similar, the expertise, experience, and seniority of the people performing the job roles distinguish them. Business owners and entrepreneurs are two of the most prevalent jobs that may appear similar yet have distinct characteristics. While a business owner is a person in charge of a company’s operational and financial elements, an entrepreneur starts a new company, incurring the majority of the risks and reaping the majority of the gains.

Business owners v/s entrepreneurs

Who is a business owner?

A business owner is the legal owner of a company; someone who owns a company’s assets and earns from them. A business owner oversees and supervises the everyday operations of a firm. They can also engage management or a board of directors for the purpose and gain entirely from the asset they possess. Since the owner has ultimate authority over the firm, he or she determines whether or not to outsource some critical executive duties to qualified experts. It is the choice of the business owner to receive a monthly salary; however, he or she is not an employee of the company.

Visit: UCLA Owners/Presidents Management Program (UCLA OMP)

Who is an entrepreneur?

An entrepreneur is defined as someone who establishes and maintains a firm while taking on more than usual financial risks. Entrepreneurs work on the cause of fixing any of the population’s most prevalent issues with the assistance of their product or service and establish a company. Entrepreneurship comprises building and launching a new firm, as well as adopting a business marketing strategy, with the ultimate objective of selling the company for a profit.

Key differences between business owners v/s entrepreneurs

• How they begin their career paths: Business owners acquire their position by purchasing or inheriting an existing firm, whereas entrepreneurs develop their own company from an original idea, which means entrepreneurs are generally in charge of managing all parts of a business from inception.
• What they intend to offer: Products and services offered by business owners often fit readily into their market and cater to a common need. Entrepreneurs, on the other hand, usually develop new products that have never been released in the market before.
• How they make key decisions: To operate their businesses, company owners frequently work closely with a number of different business experts, while entrepreneurs tend to have total control over business choices and day-to-day operations.
• How they address risk management: Business owners must avoid taking risks with uncertain outcomes because their company is already established and they cannot risk anything that might jeopardize its success. And entrepreneurs accept risks with open arms since they must test several approaches to find the one that best fits their ideas. And without risk there can be no innovation.
• What their intention of their job roles are: A business owner’s aims are often aligned with preserving profits and a stable business. Entrepreneurs often have a continuing objective of expanding their company.
• How they visualize their goals: Business owners desire to operate a successful firm that will be lucrative in the long run, whereas entrepreneurs are initially more focused on short-term success with the hope of leading to long-term success and an ever-growing company that they might continue to run, or sell.
• Who can take up the roles: A business owner can be anyone who owns a certain number of shares in the company, but an entrepreneur is entirely responsible for inventing a novel concept and transforming it into a product or service that they plan to market.

Read: CEO vs Founder – Is a CEO Higher Than a Founder?

Business owners v/s entrepreneurs: key challenges

Key challenges for family-owned business

• There is usually a perception among the company’s employees that they have been treated unfairly if a family member receives higher recognition for the same task they do. Even if no discrimination has occurred, employees may perceive that it is.
• The values of the owner’s family are frequently imposed on the firm, causing disruption of the company culture. Employee engagement, satisfaction, and retention suffer as a result.
• Making business judgments by trying not to bring personal impulses into the mix can be difficult. This can also lead to the business owner becoming prejudiced, which can have a psychological impact on the staff.
• It may appear to be effective to pass on the business to successive generations of the same family. However, when the younger generation in the family wants to pursue a different career, it becomes a challenge.

Key challenges faced by entrepreneurs

• Handling every aspect of setting up a business and running it single-handedly is a huge challenge, but it is the nature of being an entrepreneur.
• It is challenging to come up with a concept that not only answers a widespread problem but has also never been thought of before and most entrepreneurs make multiple tries before finding the right one.
• Convincing investors to invest in a new project and believing in it is extremely difficult.
• Finding highly qualified people to work for startups is incredibly difficult because they demand high salaries and perks which are hard to come by as a startup.
• Once a company is established, expanding it is also challenging.

FAQs 

• Are all business owners entrepreneurs?

Every entrepreneur is also a business owner, but not all business owners are entrepreneurs.

• Self-employed v/s business owners v/s entrepreneurs.

A self-employed individual is someone who earns money directly from customers rather than working for a company. A business owner is the legal owner of a company; someone who owns a company’s assets and earns from them. An entrepreneur is defined as someone who establishes and maintains a firm while taking on more than usual financial risks.