Entrepreneur vs manager, what’s the difference and which are you? Here is a detailed comparison between an entrepreneur vs business owner vs business manager.
The terms “entrepreneur”, “business owner” and ” business manager” are sometimes used interchangeably because of the roles they play, but it is a fact that these three terms are totally different though they may look much alike. An entrepreneur plays a different role from a small business manager, but a business owner and entrepreneur differ in the reasons of objective. Not all business owners make great managers or entrepreneurs, and not all managers are cut out to be entrepreneurs or business owners.
Stick with us while we try to differentiate between an entrepreneur, a business owner and a business manager; but first, we would attempt to explain the three terms and isolate their characteristics.
What is an Entrepreneur?
An entrepreneur is an individual who, rather than working as an employee, sets up and runs a business, assuming all the risks and rewards of the venture. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services and business/or procedures. Entrepreneurship on the other hand is the act of creating a business or businesses while building and scaling it to generate a profit.
Entrepreneurs play a key role in any economy. These are the people who have the skills and initiative necessary to anticipate current and future needs and bring good new ideas to the market. Entrepreneurs who prove to be successful in taking on the risks of a startup are rewarded with profits, fame and continued growth opportunities. Those who fail suffer losses and become less prevalent in the markets.
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Attributes of Entrepreneurs
- Innovator: Moving to the skills and capabilities that an entrepreneur needs to have, first and foremost, he or she has to be an innovator who has a game changing idea or a potentially new concept that can succeed in the crowded marketplace.
- Risk Taker: An Entrepreneur bears any risk in starting up and sustaining his/her business. He or she assumes every responsibility that might come up in the course of the business which might be caused by either change in time or quality. He is always ready for emergencies and should competitors emerge, thinks of strategies to outshine them.
- Sales Person: An Entrepreneur must be a good sales man. If one cannot sell as an entrepreneur, one cannot succeed. He or she is responsible of marketing and advertising his products or services.
- Goal Getter: Entrepreneurs do not only set goals but also thrive so much to achieve their goals. Entrepreneurs set big goals, so exhilarating that it is scary to an ordinary man.
- A Leader: One challenge of being an entrepreneur is that you have to be in charge. You must be in the fore front of your business at least during startup. You should note that one cannot make it alone as an entrepreneur. Outstanding leaders go out of their way to boost the self-esteem of their personnel. To be a successful entrepreneur, you must possess the ability to attract smart people and build great business team.
- Decision Maker: Entrepreneurs determine the objectives of their business and they should know what is suitable per time. He decides and maintains the potential investors or financiers of the enterprise and also manages the funds available. He makes sure that his business venture is in good relationship with pubic authorities and the society. He also decides the market for his product or services.
What is a Business Owner?
A business owner is an individual who owns and operates a business whether it be small or large. This individual also profits from the net gain of the company. Generally, he or she has decision making abilities and the first right to profit.
Small business owners often do not have the luxury of hiring people to perform all the tasks required to keep a business going. As the owner, your duties are as diverse as collecting sales tax, creating a computer network, setting up a filing system and marketing. You might be very good at what you do to make a product or provide a service, but running a small business brings a whole range of other responsibilities. A business owner amongst other things can double as a;
- Business Planner: As the owner, you are the one to prepare a business plan for your company. You can use marketing research to identify trends and potential markets for your products. If you have an on-staff salesperson or a manufacturer’s representative, you have to provide guidance and training. Introducing a new product and expanding into other markets are decisions you have to make.
- Human Resources: Owners of a small business often hire employees. As the owner, you have to determine whether the business can support new hires and, if it can, you have to conduct the interview process by asking key questions and avoiding ill-advised and illegal questions. The owner decides on benefits for employees, provides benefit information and forms, fields employee questions and complaints, and fires subordinates for any number of reasons.
- Customer Service: Unless the business can support CSRs (customer service representatives), the responsibility of servicing customers falls to the owner. Besides handling complaints and requests, customer service involves troubleshooting, installation, training and technical support, depending on the product or service provided by the company.
- Marketer: The owner of a small business must plan and implement marketing strategies. Effective marketing methods depend on the type of business you have. Some companies rely heavily on print marketing materials such as catalogs, brochures and booklets. Others advertise in magazines or set up booths at trade shows. As an owner, you could find that networking works wonders, and you might decide to join a business group or attend organizational meetings for your industry.
- Resident Technology Expert: Few businesses can survive without cutting-edge technology. As the small business owner, you have to keep up with innovative products on the market to remain competitive. You have to learn how to operate your computers and business software to keep track of orders and invoices, load new software and install upgrades. You might have to network multiple computers and link them to a single printer. It also helps to be able to make repairs if the copier, fax, printer or computers break down.
What is a Business Manager?
A business manager is the person that is responsible for overseeing and supervising a company’s activities and employees. Businesses rely on the business managers to keep workers aligned with the goals of the company. Business managers report to top executives in a larger organization, but in a small company, the manager might either own the company or report directly to the owner.
Responsibilities of a Business Manager
The general responsibilities of business managers center on making certain that the firm’s day-to-day operations run smoothly. This does not mean that they should do the specific tasks themselves. Rather, they see to it that the departments or units that they are supervising are delivering results.
In order to carry this out, they don’t necessarily have to meet the company’s rank-and-file employees all the time. They do make their orders known to the section or department supervisors who will then relay what needs to be done to the workers. The business manager will simply make regular evaluations to ensure that milestones are being met and work proceeds efficiently.
One of the more common roles of business managers is ensuring that the company meets its sales and marketing goals. In this role, they help prepare the company budget and give their approval on the expenses requested by the various departments.
They also spend a lot of time scrutinizing sales statistics and making projections on sales of new or existing products. If they feel that the company needs to offer special discounts to products that aren’t selling well, business managers try to determine what the best price range would be and the strategy by which this can be carried out. They also come up with ways the company can draw more customers to patronize their products or services.
Difference Between an Entrepreneur and a Business Owner
We have noted that business owners and entrepreneurs are indeed different, though this difference can be subtle and the lines can be blurry. Here are the major ways entrepreneurs differ from business owners.
- The Satisfaction they derive from the business
Business owners get their satisfaction from happy customers and happy stakeholders, but entrepreneurs are more focused on thinking big, stepping into the unknown, and changing the world. They embrace risk, while a business owner seeks to reduce and manage risk to ensure that the business remains profitable.
- Stability and predictability
Good business owners like a predictable market where they can make calculated decisions to improve and grow. Entrepreneurs love to envision breakthroughs and disruptive technologies, with tough problems to overcome, which will allow them to create lasting change. In fact, entrepreneurs are always chasing after the adrenaline in business.
- Level of acceptable challenges
Most small business owners enjoy the completion of daily and weekly tasks, and cyclical processes, like inventory and receivables. True entrepreneurs are always thinking many months out, anticipating the next opportunity and the next recognition for innovation.
- Long-term attachment to the business versus the idea
If you see the business as the core of your worth, you will make a great business owner. Entrepreneurs see their value in the change they accomplish, and their impact on the future. True business owners dream of keeping the business in the family, and making it a long-term success.
Key Differences Between Entrepreneurs and Business managers
- Entrepreneurs Start Companies, Managers Run Them: As an entrepreneur, you are the dynamic force behind the planning and launching of new business enterprises. You may be involved in all aspects of your company throughout its life span, beginning with the raw startup stage, when the venture is little more than an idea.
You handle issues ranging from the company’s product design to determining the most efficient production methods and even finding the company’s first customers. In contrast, a small-business manager is someone you hire to handle the day-to-day management of your startup. The manager’s goal is to keep your company growing and operating efficiently.
In some cases, you may bring in a skilled business manager to build your company into a larger entity. This typically happens after you realize that your creative vision only take your company so far, and having an experienced manager on board to direct day-to-day operations will allow the business to continue to grow.
- Duties: An entrepreneur focuses on business startup whereas the main focus of a manager is to manage ongoing operations of a business.
- Motivation: Achievements work as a motivation for entrepreneurs. On the other hand, the primary motivation of business managers is the power and maybe the remuneration.
- Ownership: An entrepreneur is the owner of the enterprise while a manager is just an employee of the company.
- Remuneration: A manager gets salary as remuneration for the work performed by him. Conversely, profit is the reward of the entrepreneur.
- Decision making: An entrepreneur’s decisions are driven by inductive logic, courage, and determination; that is why the decision making is intuitive. On the contrary, the decision making of a manager is calculative, as they are driven by deductive logic, the collection of information and advice.
- Creativity: The major driving force of an entrepreneur is creativity and innovation. As against this, a manager maintains the existing state of affairs.
- Risk: While entrepreneur is a risk taker, the manager is risk averse.
In other words, the entrepreneur is the risk taker and an innovator in addition to being a creator of new enterprises whereas the professional manager is simply the executor.
Business owners on the other hand comfortably run their businesses and do not aspire to do more. Many business owners focus on putting out fires, and in that sense tend to be more reactive. They envision a world where employees would do their jobs, customers would pay on time, and software or equipment would function as it was designed.
True entrepreneurs question the status quo and envision a world where common industry or customer pain points no longer exist.
Many business owners make decisions unintentionally that lead to them buying a full-time job. For example, naming the business after themselves. “Evans Electric Services” holds little to no brand equity or value for a potential buyer with Thomas for a last name. They may also build their business through their own skills.
Highly skilled personal trainers who try to scale their business by hiring someone else to train their clients often face a rude awakening when their clients refuse to train with someone else, or complain about a discrepancy in the quality of service or care. The glass ceiling firmly atop their heads results in trading time for money as a business model
Entrepreneurs, on the other hand, often have an exit strategy built into their business plan before they’ve even made their first sale. They might choose a more neutral or operational name that anyone could call their own, and they might hire more skilled employees for certain aspects of the service delivery so that they can more easily escape the operational aspects of the company and work “on the business” instead of working “in the business”.
True entrepreneurs, through their mindset of iterating solutions to common problems, often build businesses that can one day run without them. That is, the business can be run by a team, through effective systems such as automated recurring billing and timely deliveries or regular upgrades. In effect, entrepreneurs escape the trap of “time for money” and create residual income streams we can term as “entrepreneurial revenue.”