There has been much debate about the difference between business people and entrepreneurs, and often, people claim the titles when they don’t actually run a business, while others shy away from the title out of insecurity. The truth is, businesspeople, work to expand existing ideas’ place in the market, while entrepreneurs forge new products and services.
Anyone may occupy both roles in our society, and sometimes, one may lead to the other. Either way, both business people and entrepreneurs play a valuable role in solving people’s problems and providing employment opportunities. They simply go about it in different ways, from their work style to risk tolerance to the overall management approach. Read on to learn about the differences between businessmen and entrepreneurs — and which one you are.
For everyone who calls themselves a businessman or businesswoman, there seem to be at least three others calling themselves entrepreneurs. Indeed, “entrepreneur” is currently a bit of a buzzword, broadly applied to everyone from life coaches and Instagram influencers to Silicon Valley startup founders and billionaires such as Jeff Bezos. Meanwhile, people tend to associate the word “businessman” with Wall Street traders and Fortune 500 CEOs. But what do these words really mean? And does one of them apply to you?
What is a Businessman?
To be a businessman or businesswoman, you simply need to run a business — or be in a leadership role in one. It can be a business that you inherited or built, but generally, you’re running a company based on existing products and services. If you’re a businessperson, you likely supervise employees and make strategic decisions for the company’s growth. Your goal is to refine your brand and expand the business’s market share. You may also be in charge of investment decisions to further increase the business’s value.
What is an Entrepreneur?
The core requirement to be an entrepreneur is that you have an original idea. This can be an entirely new product or service or a unique twist on an existing idea (e.g. the founder of Uber took an innovative approach to typical cab services). An entrepreneur builds a business from scratch, typically by acquiring investor funding or even putting up personal funds to support the company.
Businesspeople vs. Entrepreneurs
Given the difference in how and why their companies are formed, it’s natural for there to be key differences between businesspeople and entrepreneurs. There is some overlap, and entrepreneurs can become businesspeople and vice versa. However, they tend to have distinct philosophies and practices, such as:
Goals and Motivations
Businessmen tend to want to make a lot of money. They’ll tap into a market with great potential for growth or piggyback on existing trends to boost their profits. Whether they’re picking up an established business or building a new one, their goal is to promote growth and make good money doing it.
By contrast, entrepreneurs are more interested in establishing a company or solving an unsolved problem. They tend to prioritize closing gaps in the market or serving underserved markets, and they may not focus on growing the company’s value at all. Instead, they wait until their startup is ready to sell. They’re also more tolerant of risk, even if that means low revenue while the company is being built.
Workflow and Productivity
Businessmen know that time is money, and they’ll reduce their costs whenever possible. They want to see quick results, which makes them more likely to invest money in the best tools, equipment, and tactics to maximize their revenue. They’re willing to invest in big and potentially impersonal teams, all designed to support the business’s growth.
However, an entrepreneur wants to bring on members of a team. They tend to hire only a few employees and cultivate a strong company culture that encourages collaboration. They usually have limited budgets for software and equipment, which means that a lot of the business is handmade and homegrown. Entrepreneurs are willing to take more time to achieve the results they want.
Responsibility and Purpose
Businessmen are focused on getting results and optimizing the return on their investment. They have little patience for anything that could derail their progress, which means they’re likely seeking the easiest path to making money. They’re not afraid to leverage their resources to boost profitability, and they place their own goals above all else.
Entrepreneurs, meanwhile, are more likely to incorporate attitudes of social responsibility and ethical work into their approach. They want to change the world through great ideas, which means they tend to incorporate charitable giving, sustainable approaches, and fair compensation into how they develop their businesses. Of course, there are businesspeople who champion responsible business practices and entrepreneurs who want to get rich quick as well.
Are You a Businessperson or an Entrepreneur?
If you’re running a company that someone else created or doing business based on an established idea, you’re a businessperson. You’re responsible for the decisions that govern the company’s success, and you’re looking for ways to improve your business’s value and expand your market.
Even if you created the idea for the company, you’re not an entrepreneur if the product or service is well-established (e.g. plumbing or graphic design). However, you can start your businessperson journey as an entrepreneur who ends up running a company.
If you’re developing a novel idea and building a business around it, and if you’re investing time and money in the business with substantial risk, you’re an entrepreneur. This means that participants in MLMs or network marketing are not entrepreneurs by this definition. However, you can be an entrepreneur even if you are a sole proprietor offering a unique take on a service, or if you’re putting distinctive designs and products on the market (e.g. art, software, etc.).
Wrapping Up
There’s no right or wrong role: both businesspeople and entrepreneurs are essential to the growth of our shared economy and commerce. Some people straddle the lines between the two types, shifting from personal company projects to money-making enterprises. In short, businesspeople focus on supporting the market with quick results, while entrepreneurs aim to change the world through innovation. Both are essential to society’s success.
