Are you an Entrepreneur or Small Business Owner? What is the difference?
It is possible to misunderstand the difference or use both terms interchangeably. The Small Business Owner not only owns the business but is also involved in the business’s success. The business is not possible without them (i.e. The owner is absent for any reason, whether it be medical, legal accounting, consulting, or freelancing.
The term “Solopreneur” is often used to describe a practitioner who is their boss, but must also create a product or service for their business to generate income. Although this is a better option than working for someone else it still means that you trade time for money. Time is our most precious resource.
You are likely to own a small business, whether you’re a solopreneur or a small business owner. Maybe the business is managed by you and a few other founders. Only a handful of people have the ability to execute the secret recipe that will build your business. The business cannot function without these key people.
An Entrepreneur builds a business and supports systems independently of the founder. However, the goal is to grow the business until the owner no longer has to be involved in the day-to-day operations. If your business continues to generate revenue in your absence, you can be called an Entrepreneur.
Many people start out as small business owners, have success and then grow their businesses. Then, we may move on to create a larger business that doesn’t require us to be there and then graduate to Entrepreneurship. We may be called Serial Entrepreneurs if we do this repeatedly.
“Entrepreneurship means to pursue opportunity regardless of current resources. ”
Howard Stevenson, Harvard Business School Professor.
It is possible that you aren’t clear from the beginning which type of entrepreneur or small business owner you want to become. You will be more likely to open a business that is right for you if you ask a lot of questions and really assess your needs. It’s fine to consider yourself a Small Business Owner. We are not saying it’s wrong. It is important to understand the differences between them as they can impact how you develop your business and the type of business that you create.
Also, it’s important not to create another hard-working, low-paying “job”, similar to the one you already have. Michael Gerber’s seminal book, “The E-Myth”, best explains the situation. This book is essential reading for small business owners. It explains the distinction between working “in” your company (you make the pie) and working “on” it (others make your pies according to your recipes and systems).
If you are preparing to be your own boss or have started a small business already, it is important to think about your long-term goals. This will allow you to decide the type of business that you want to start or build. It will also help you define your success.
Are you an entrepreneur or small business owner? These are the questions you should ask to determine what you want.
Are you looking to buy one or two locations? Do you want to own one or two franchises, or your own practice? Or do you want to build something larger with multiple locations and maybe expand internationally (i.e. Franchises to others and hiring them to manage the business.
Are you interested in working for the business (e.g. Do you want to make the donuts or have someone else handle the day-today operations (i.e. Someone else will make the donuts according to your instructions.
Are you looking for work or a self-managing business (one that doesn’t rely on you being there every day)?
Are you more comfortable creating or executing?
Are you imagining multiple businesses in multiple industries?
Do you have the ability to let go of all details or are you a micromanager?
Is it possible to be the only one who can deliver your product or service, or to teach others how?
Are you looking to work until you reach a certain age, then retire or continue running your business until your mind is no longer capable?
Is it possible to sell your business as it is now, without you being part of it?