Are Small Business Owners Entrepreneurs?

When you go to start your small business, you might not think of yourself as an entrepreneur. However, small business owners and entrepreneurs share many similarities. Analysing the risk tolerance, career goals, growth strategy, and daily activities of entrepreneurs and small business owners will help you uncover similarities and differences.

Small Business Owners Vs Entrepreneurs

Risk Tolerance

An entrepreneur takes on a high financial risk level through investments or business opportunities. Opening up your own small business comes with various risks. From the risk you won’t be profitable to the risk of defaulting on loans, small business owners take risks just like entrepreneurs do. An entrepreneur’s risk tolerance is generally higher compared to a small business owner; however, both take on risk.

Career Goals

Small business owners are trying to pay the bills with money earned from the business while entrepreneurs maintain a career goal to maximise return on investment through risky decisions. Additionally, entrepreneurs strive for financial freedom while small business owners are often content making a living off their business.

When small businesses are passed down between generations, there is a sentimental piece attached to the owners and community. In these cases, owners will be hesitant to make any drastic changes in the business. On the other hand, entrepreneurs frequently bounce around between different investments and ideas, looking for social change and innovation.

Business Strategy

Both entrepreneurs and small business owners retain a business strategy. Entrepreneurs maintain a strategy to find the next big thing, whether that be a product or service. Their business strategy is purchasing the product or business when it is not popular. Then, making a profit once the product takes off. This type of strategy calls on the need to be highly flexible and to consider customer feedback to make more informed decisions.

A business owner generally retains a strategy focusing on growth. From attracting new customers to maintaining effective cash flow management, the primary focus of financial and operational goals is to build profit. The business strategy of a small business owner is often less complex compared to an entrepreneur, but both have some type of strategy.

Daily Activities

Both a small business owner and an entrepreneur are classified as self-employed, meaning they have the ability to set their own schedules. Entrepreneurs often hold investments that are taken care of by other people. On the contrary, a business owner has a mounting to-do list each day between managing employees and running jobs. Although both have daily tasks, those of a small business owner are more time intensive.

Summary

At the end of the day, small business owners can be classified as entrepreneurs because of the similarities. However, there are some differences between the two categories of individuals as well. Despite the similarities and differences, entrepreneurs and business owners need the proper insurance coverage. One way to do this is to use our instant quote generator, where you can get an estimate on market-leading insurance in seconds! Simply enter your occupation and expected revenue to get started!