Do you want to become an entrepreneur? Has being a businessman/businesswoman always been your dream? But did you know the two aren’t the same?
To decide which one you want to be, you must first understand the difference between an entrepreneur and a businessman/businesswoman. Here we’ll try to decode what the two terms mean and look at some examples to bring out the entrepreneur and businessman/businesswomen difference.
Let’s first look at the definitions to see the businessman/businesswoman and entrepreneur difference.
Entrepreneur: The word comes from the French verb ‘entreprendre’, which means ‘to undertake or do something’. It can be traced back to the thirteenth century CE.
By the sixteenth century, ‘entrepreneur’ had become a noun, which meant ‘a person who undertakes a business project or a speculation’.
The Oxford languages dictionary now defines entrepreneur as a person who sets up a new business or businesses, taking on financial risks in the hope of making a profit.
Now that we’ve understood what entrepreneur means, let’s look at the word businessman/businesswoman before comparing the difference between entrepreneur and businessman/businesswoman.
Businessman/businesswoman: According to the Merriam-Webster dictionary, a businessman/businesswoman is a person who transacts business or is an executive. Another definition of it, according to the Oxford dictionary, is a man or woman who works in commerce, especially at an executive level.
So, the businessman/businesswoman could have ownership or shares in a privately owned business and partake in activities to create cash flow and revenue.
Difference Between Entrepreneur And Businessman/Businesswoman
To understand the difference between entrepreneur and businessman/businesswoman, let’s review the terms further.
The following should explain the entrepreneur and businessman/businesswoman difference. An entrepreneur sets up a new business. This implies that they have more, if not complete, control over the business and that the business stems from a new or original idea.
A businessperson, on the other hand, is merely employed in a business. This means that they conduct commercial activities but may not necessarily own the business entirely. However, there could be some ownership involved. The business, in this case, may not always be a new one, or one that hasn’t been done before.
Now let’s attempt to understand the difference between entrepreneur and businessman/businesswoman with an example:
Margaret is looking for a way to earn money. She goes to a flower wholesale market and buys an assortment of flowers. She arranges them into little bouquets and sells them for a profit of 5%. Margaret continues to make profits from these transactions and can be called a businesswoman.
Lloyd also wants to make money. He goes to the flower wholesale market and buys a hundred roses. He removes the petals from the stems and freezes them. He then goes to a hardware shop and purchases resin, hardening agents, sandpaper and cutting implements.
He pours the resin into a mold and places the freeze-dried petals into it. Once the resin dries, Lloyd sand papers it and cuts it down to size.
He then makes four wooden legs and places the resin on top of the legs. He has created a beautiful image of a phoenix with rose petals inside a resin table top.
He sells his creation for a profit of 80%. This is an example of an entrepreneur.
So, what is the difference between entrepreneur and businessman/businesswoman within this example?
Both were commercial activities. The first one used an existing market framework to make revenue, the second created a product that didn’t exist before and hoped there would be a market for it.
Let’s take a look at a few pointers that clarify the difference between entrepreneur and businessman/businesswoman.
Entrepreneur Vs. Businessman/Businesswoman
- You become an entrepreneur by starting a business based on an innovative, new and unique approach or idea
- A businessman enters an existing market and creates a space for themselves to conduct commercial activity
- A businessman/woman participates in that market
- It could be said that entrepreneurs are visionaries and tend to rely more on an intuition that people may be interested in paying for their product or service
Here are some more businessman/businesswoman and entrepreneur differences based on specific criteria:
Entrepreneur vs. businessman/businesswoman: Thought Process
- A businessman is more likely to be calculative. They assess the market they’re about to enter, evaluate whether it makes financial sense for them to do so and then begin to trade.
- Entrepreneurs are generally more likely to take bigger risks, because their business models, ideas and products and services often have no proven record of success. There is a higher chance of failure without a model to go by.
Entrepreneur vs. businessman/businesswoman: Trajectory
- A businessman/woman has the advantage of following the paths of those who came before them. Their trade or service is similar to others in the existing marketplace, giving them plenty of examples to emulate. They are less prone to risk. A businessperson doesn’t usually depart from the norms of how the business has been done traditionally.
- An entrepreneur generally has no precedent, and are likely to conduct their business with unique and fresh approaches.
Entrepreneur vs. businessman/businesswoman: Purpose
- A businessperson is generally more focused on ensuring that they make a profitable return from their commercial activities.
- While an entrepreneur does want to make profit, their focus leans toward people using their products, being happy with them and benefiting from them.
Entrepreneur vs. businessman/businesswoman: Risk
- A businessperson does face the risk of being unable to compete with legacy players in the marketplace. Competition can be severe and that is a definite downside.
- Entrepreneurs on the other hand generally have no competition, they are the first to provide the service or goods that they offer.
Now, let’s understand entrepreneur and businessman/businesswomen differences through some real-life examples of both.
Examples Of Entrepreneurs
Here are a few examples of entrepreneurs that you could draw inspiration from:
Jeffrey Preston Bezos, a name that’s always toggled when it comes to the richest man in the world. Jeff Bezos started Amazon, named after the well-known river in South America, selling books online. The company is a leading e-commerce and retail platform now.
Willian Henry Gates, more commonly known as Bill Gates, founded Microsoft in 1975. Gates invested his time and energy into his passion from the age of 13 and has now accumulated wealth close to US $ 120 billion.
Mark Zuckerberg is another stellar example. One of the most forward-thinking business minds of our generation, he created a business that thrives on information and patterns. Having started with Facebook, his company now owns numerous social media platforms and his net worth is about US $ 101 billion. He is among the youngest self-made billionaires.
Lawrence Edward Page, or Larry Page, is one of the founders of Google and is worth about US $ 78 billion. A famous quote by Larry Page should be a lesson to all aspiring entrepreneurs: “Always deliver more than expected.”
Sir Richard Charles Nicholas Branson, founder of the Virgin Group, which is made of more than 400 companies spread across the world. Famous words by Richard Branson to live by: “It’s about turning what excites you in life into capital, so that you can do more of it and move forward.”
Branson is known for breaking records and being the first to attempt many things, such as crossing the Atlantic in the world’s largest hot air balloon.
Examples of Businessmen/Businesswomen
These examples will further clarify the businessman/businesswomen and entrepreneur difference:
Jean Brownhill Lauer, founder of Sweeten, a home renovation company is one of the most successful businesswomen. Having come from a fairly challenged background financially , her education was the key to her success.
Sharon Mickel’s bakery, The Perfect Pear Catering Co., is known for its bread puddings and cinnamon rolls in the US. While these are made all around the world, she has achieved immense success in her business.
Sharon started her business relatively late in life. A few weeks of culinary school gave the mother of four the opening she needed to find something she was passionate about. Her success came from smart marketing and listening to customer feedback.
These points should give you a clear idea of the differences between entrepreneur and businessman/businesswoman. You may not be sure if you’re a businessman/businesswoman or an entrepreneur when you set out on your journey. However, as your idea takes form and you begin to understand the commercial activity you are about to undertake, it will become more apparent. Knowing the difference between entrepreneur and businessman/businesswoman will help you find your feet and assert your commercial entity.
It’s important to understand these concepts clearly and make the right choices to ensure a higher rate of success. Harappa’s Leading Self course delves deep into the entrepreneur and businessman/businesswoman differences when shaping thought processes. Adopt the right approach and skills to make your new venture soars to great heights with the Harappa edge.
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