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Seven Top Differences Between Entrepreneurs and Businessmen
Entrepreneurs and businessmen are more often than not interchangeably used. I too happen to be responsible for using one or the another at times. However, Personally i think that there is a factor between your way entrepreneurs run their venture and businesses run their operation. Entrepreneurship is about assuming risk and accepting whatever rewards or failures that occur subsequently. A businessman on the contrary follows a common path and takes lesser risk than an entrepreneur.Let us look at a few of the points where entrepreneurship is different from running the company.
Entrepreneur are in the company of making new things The purpose of clients are to recycle these products. Hence business is a lot more like trading. By trading I am talking about purchasing goods from one place and selling at the other. This may also involve manufacturing at some step however the fundamental principal remains the same. Entrepreneurs create something new. They identify an issue and try to create innovative solutions that help reduce or eliminate problems. Even if they do trading, they will apply innovative techniques to it. Let me give you an example. If an owner of retail chain is adding internet sales as one of his channel, he's just being a businessman looking for new methods for getting more business. If however he goes an creates a cutting-edge product which never existed before, he's becoming an entrepreneur. Here, he's taken the risk upon himself. Entrepreneur's "Business" is unique An entrepreneur will not operate in areas where there's already a crowd. He will use his scarce money to understand more about new. He will for instance, go for new channels of sales( internet, m-commerce etc), innovative products ( a brand new software), innovative marketing strategies( viral marketing) etc. He side steps the market that is too competitive and works inside a niche area. Entrepreneur puts his own money first Since individuals are not convinced of his ideas, entrepreneur needs to put his cash on the road first. He needs to reveal that an industry exists for the products he's creating. Then only he can get external finance. This really is in contrast to a normal business, where it's known that market exists and therefore investors tend to be more prepared to invest in such businesses Entrepreneurs working with new innovative products have more breakout chances If the potential risks are high, so are the rewards. An effective entrepreneur reaps more monetary benefits than his business counterpart. A normal business with lower risk will get lower returns on the capital it invests. The surety of making money in regular clients are more than that of entrepreneurship though. Entrepreneurs experience more uncertainty than regular businesses Entrepreneurship is certainly more riskier and uncertain than conducting a regular business. A business owner faces the question just about every day about success of his product, cost of developing the product, customer's adoption, team motivation and anything else. There's uncertainty and un-evenness of sales. A regular business however has pretty much regular sales and is less uncertain than an entrepreneurial venture Entrepreneurs share businesses with team Entrepreneurs develop vision plus they canrrrt do it alone. So an entrepreneur constantly must remind his team and himself by what they are creating and why it will work. An Entrepreneur has to look for new ways to motivate the employees. The roles of employees change frequently in line with the perceived business conditions In a business however, the roles of employees are same throughout the lifetime of the business Entrepreneurs share the success with the team Entrepreneurs don't have much cash to provide. Hence they offer equity to their employees. When the venture is successful everyone who has a shares becomes rich. One of the prime example is Infosys technologies in Bangalore. It's created a lot of millionaires just by distributing equities to the founders and employees from the company. A company on the other hand is less available to sharing equity with employees and would pay higher salaries to compensate for this.
I nowhere say that businesses can't be entrepreneurial or the other way around but that there's a significant differences between the way a entrepreneurial venture along with a business works. A company however can become entrepreneur by doing something innovative while entrepreneur can help to eliminate the uncertainty when you are more like a company.
