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Seven Top Differences Between Entrepreneurs and Businessmen
Entrepreneurs and businessmen are more often than not interchangeably used. I too have been guilty of using one or even the another at times. However, Personally i think that there is a factor between the 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 well known path and takes lesser risk than an entrepreneur.Let us look at some of the points where entrepreneurship is different from running the business.
Entrepreneur are 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 mean purchasing goods in one place and selling in the other. It 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 that help reduce or eliminate problems. Even when they do trading, they will apply innovative techniques to it. Let me provide you with a good example. If an who owns retail chain is adding internet sales among his channel, he is just as being a businessman trying to find new methods for getting more business. If however he goes an creates a cutting-edge product which never existed before, he's being an entrepreneur. Here, he has taken the risk upon himself. Entrepreneur's "Business" is exclusive An entrepreneur will not work in areas where there is already an audience. He'll use his scarce money to explore new. He will for example, go for new channels of sales( internet, m-commerce etc), innovative products ( a new software), innovative marketing techniques( viral marketing) etc. He side steps the market that is too competitive and works in a niche area. Entrepreneur puts their own money first Since individuals are not convinced of his ideas, entrepreneur has to put his cash on the line first. He needs to reveal that a market are available for the products he's creating. Then only he can get external finance. This is in contrast to a regular business, where it's known that market exists and hence investors tend to be more prepared to purchase such businesses Entrepreneurs working with new innovative products convey more breakout chances If the risks are high, so are the rewards. An effective entrepreneur reaps more monetary benefits than his business counterpart. A regular business with lower risk will get lower returns on 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. An entrepreneur faces the question almost daily about success of his product, price of developing the product, customer's adoption, team motivation and everything else. There's uncertainty and un-evenness of sales. A regular business however has more or less regular sales and it is less uncertain than an entrepreneurial venture Entrepreneurs share business ideas with team Entrepreneurs develop vision and they cannot do it alone. So an entrepreneur constantly must remind his team and himself about what they're creating and why it'll work. An Entrepreneur has to always look for brand new ways 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 through the lifetime of the business Entrepreneurs share the success using the team Entrepreneurs do not have much cash to provide. So they offer equity for their employees. Once the venture is successful everyone that has a shares becomes rich. One of the prime example is Infosys technologies in Bangalore. It's created so many millionaires simply by distributing equities to the founders and employees of the company. A business however is less open to sharing equity with employees and would pay higher salaries to compensate for it.
I nowhere state that businesses cannot be entrepreneurial or the other way around but that there's a significant differences between the way a entrepreneurial venture and a business works. A company however may become entrepreneur by doing something innovative while entrepreneur can help to eliminate the uncertainty by being more like a business.
