Are You an Entrepreneur or a Small Business Owner?

What is the difference between an entrepreneur and a small business owner, and how can you jump the lines between them? The linguistics around the terminology can be difficult to grasp so here is a quick guide on the differences between the two terms and how you can change your situation.

Are You an Entrepreneur or a Small Business Owner?

Understand the Differences

The main difference between an entrepreneur and a small-business owner is that the former will take on higher risk engagement products whereas the latter will use pre-existing business formats to create a smaller version with a view to grow. A great way of symbolizing that in your minds’ eye is the way that Uber was created in the last few years. Uber set up a series of drivers with a way to find jobs and log into shifts without a huge central office to organize it all.


Yes, customer service is necessary, and they do have a team of customer care agents who all work remotely. Compare Uber to your local big taxi firm. A major taxi firm has a central office and phone operators that need to be on the other end of the phone at all times. That is the difference between an entrepreneur and a small business. Your local taxi firm is not looking to become the next Uber because that’s not what their model depends on, but they are different in operation.


Founder vs Owner-Operator

There are certain categories that can be found in typical entrepreneurial enterprises as opposed to SMEs as well. One is that enterprises are more likely to be registered legally from the offset whereas someone who operates as a flower shop out of a given space, for example, would probably forgo the formal registration of a business to avoid various taxations. Similarly, this can be seen in the comparable behavior of the two founders. While the founder of an enterprise would be more likely to pour their personal finances into their business, an owner-operator of an SME will be more likely to keep a very separation of powers rule with the business to not go down with the ship.


Also read: Who is an Entrepreneur and Discover What Type of Entrepreneur you are


Embrace the Mindset

So, the way to jump from one to the other is obviously a shift in mindset. If you realize that your model needs more time to gain further customer tracking and that a swift cash injection is needed, something like a home equity loan is plausible. An entrepreneur wouldn’t think twice – they’d review a guide and get a second mortgage as quickly as possible. A small business owner would seek funders or additional resources instead, which can take a lot longer if the model is not as solid as their intention is.


The difference between the two can be reduced to the use of resources. An entrepreneur will pull every string, use every connection, and get their product up and out the door with success to follow. And the approaches towards seed funding will look different as well. A small business owner will run their own Facebook page rather than beg a friend of a friend to help who’s a professional in the field because they want to avoid paying out wages when they don’t have to.

Francis Nwokike

Francis Nwokike is the Founder and Chief Editor of The Total Entrepreneurs. A Social Entrepreneur and experienced Disaster Manager. He loves researching and discussing business trends and providing startups with valuable insights into running a profitable business. He created TTE to share ideas and tips to help entrepreneurs run and grow their businesses.

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