In the business language, the terms entrepreneur and businessman are often used interchangeably. Many people use one to mean the other. But did you know that an entrepreneur is different from a businessman? In this article, we will explore the differences between the two.
What does Entrepreneur mean?
An entrepreneur is a person who has a new idea to start a new venture and bring change to the world. He identifies a problem in the market and creates a solution for it. They are highly creative, takes a risk, and endures the unpredictability of business. The business they start is known as a start-up. The entrepreneur is actively involved in the operation of the business namely labor, land, and capital. They also provide leadership in the venture.
Entrepreneurs play an integral part in the economy as they use the skills and initiative necessary to look out for needs and bring new ideas to the market. The rewards include fame, profit, and continued growth opportunities. Failure in the venture results in losses and less prevalence in the market for those involved.
The funding of entrepreneurs includes SBA (Small Business Administration) loans and crowd-funding or even personal savings.
Characteristics of an entrepreneur
- Versatile- They are open to changes and ready to take on new tasks such as direct contact with the customers.
- Flexible- They are flexible to change or modify their ideas if the first does not work as expected.
- Money savvy– They are well versed in dealing with expenditures and are rigorous in book-keeping of income vs. expenses. This prevents digging into the company’s funds which are necessary to cater to the company’s needs such as rent, stocking, maintaining equipment, and promoting the business.
- Resilient– They don’t give up easily even when they encounter difficulties which are common in a business start-up.
- Focused– They are focused on their business to eliminate noise and doubts which come with running a business.
- Business smart-They must possess knowledge on how to manage money and understand financial statements.
- Communicators-Successful communication is important in almost every facet of life. It is important in the running of a business too.
So who is a Businessman?
A businessman is a person who operates or starts a business with the same old business idea. They choose to do business that is high in demand and that give them maximum profit.
The business, however, faces stiff competition because many companies exist in the market with the same idea. The chance of failure is low though because the concept has been tried and tested by other companies.
Characteristics of a businessman
- Knowledge of business- He should have a thorough understanding of the business, being clear of the aims and objectives of the business.
- Accuracy- Precision is a key aspect for a successful businessman. He realizes what he is talking about and what he means in regards to orders and their execution
- Alertness- He must be alert to know the developments taking place in his country and in the world to know the public needs.
- Time sense and foresight- Businessmen need to appreciate time in the running of their businesses. This helps him to meet the rapidly changing needs of the consumer and to forecast the future.
- Initiative and capacity to make decisions- The proper functioning of the business depends on the capacity of the businessman to make bold and prompt decisions.
- Energy- He must possess physical and nervous energy to lead and must be capable to put up forcefully his points that he believes are in the right direction
- Personal qualities- He must possess personal qualities key to the success of a business such as being intelligent, mentally- alert, kind-hearted, and possessing a humane approach to problems as a leader.
Similarities between Entrepreneur and Businessman
- They are both leaders in business set-ups
- Their decisions are key to the success of a business venture
Differences between Entrepreneur and Businessman
An entrepreneur is a person who has an exclusive idea to establish a new venture and bring change to the world. They identify a problem in the market and creates a solution for it. On the other hand, a businessman is a person who operates or starts a business with the same old business idea. He chooses to do business that is high in demand and that gives him maximum profit.
An entrepreneur creates a market while a businessman makes his place in the market.
An entrepreneur is intuitive while a businessman is calculative
The associated risk for an entrepreneur is approximately high while that of a business is less.
An entrepreneur uses unconventional methods as his market strategy while a businessman uses traditional or ordinary methods.
An entrepreneur focuses on employees, customers, and the public to solve a problem while a businessman focuses on profit.
For an entrepreneur, competition is low while for a businessman competition is extremely high.
Entrepreneur vs. Businessman: Comparison Table
Summary of Entrepreneur vs. Businessman
An entrepreneur has an exclusive idea that he turns into a venture bringing change to the world while a businessman is an individual who starts and operates a business using the same old business idea. Knowledge is power.
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Written by : Tabitha Njogu.
and updated on 2022, February 21
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