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Seven Top Differences Between Entrepreneurs and Businessmen
Entrepreneurs and businessmen are most of the time interchangeably used. I too happen to be responsible for using one or even the another sometimes. However, I feel 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 other hand follows a common path and takes lesser risk than a business owner.Let us look at a few of the points where entrepreneurship is different from running the company.
Entrepreneur have been in the business of making new things The purpose of business is to recycle the products. Hence clients are more like trading. By trading I am talking about purchasing goods in one place and selling in the other. This may also involve manufacturing at some step but the fundamental principal remains the same. Entrepreneurs create something new. They identify a problem and work to create innovative solutions which help reduce and sometimes eliminate problems. Even when they do trading, they will apply innovative techniques to it. Let me give you an example. If an who owns retail chain is adding internet sales as one of his channel, he's just as being a businessman trying to find new methods for getting more business. If however he goes an creates an innovative product which never existed before, he's being an entrepreneur. Here, he's taken the risk upon himself. Entrepreneur's "Business" is unique An entrepreneur will not operate in areas where there is already an audience. He'll use his scarce money to understand more about new. He will for example, 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's too competitive and works in a niche area. Entrepreneur puts their own money first Since people are not convinced of his ideas, entrepreneur needs to put his cash on the road first. He has to reveal that a market exists for these products he's creating. Then only he can get external finance. This really is as opposed to a regular business, where it's known that market exists and hence investors tend to be more willing to invest in such businesses Entrepreneurs working with new innovative products convey more breakout chances If the risks are high, so might be the rewards. An effective entrepreneur reaps more monetary benefits than his business counterpart. A regular business with lower risk will get lower returns around the capital it invests. The surety of creating money in regular business is more than that of entrepreneurship though. Entrepreneurs experience more uncertainty than regular businesses Entrepreneurship is certainly more riskier and uncertain than conducting an ordinary business. A business owner faces the question just about every day about success of his product, cost of developing the merchandise, customer's adoption, team motivation and everything else. There is uncertainty and un-evenness of sales. A normal business however has more or less regular sales and it is less uncertain than an entrepreneurial venture Entrepreneurs share business ideas with team Entrepreneurs build on vision and they canrrrt do it alone. So a business owner constantly must remind his team and himself about what they're creating and why it will work. A business owner needs to always look for brand new methods to motivate the employees. The roles of employees change frequently based on the perceived business conditions In business however, the roles of workers are same throughout the lifetime from the business Entrepreneurs share the success using the team Entrepreneurs don't have much cash to provide. So they offer equity for 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 has created so many millionaires simply by distributing equities to the founders and employees from the company. A company on the other hand is less open 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 is a significant differences between your way a entrepreneurial venture and a business works. A business however can become entrepreneur by doing something innovative while entrepreneur can reduce the uncertainty by being more like a business.
