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What is the difference between an Entrepreneur and a Businessman?


Generally, there is no big difference between entrepreneur and businessman. In an everyday life, these terms are perfectly interchangeable.

That, however, happens not without a reason.

On the surface, there is indeed seemingly little difference between an entrepreneur and a businessman. After all, both are about running a business and leading the teams.

It is also true that an entrepreneur can become a businessman. At the same time, a businessman may step into the shoes of an entrepreneur.

But… that is where the similarities end.


Entrepreneur vs Businessman

Entrepreneurs and Businessmen are indeed similar, but only to a certain extent.


Although borders between these two concepts still remain blurred, entrepreneurs and businessmen are different.

Sometimes they are drastically different.

What makes them different is not so much the knowledge or innate talents, but how they apply their skills to the job of creating and running a business.

Understanding these differences will help to get better insight into how business works in the real world.

So, let’s dig deeper and find out what is the difference between entrepreneur and businessman?



What is a Businessman?


According to Cambridge Dictionary: a man who works in business, especially one with an important position in a company or who owns his own company is called a businessman. 


Thus a businessman is usually a person who sets up a business by pursuing an existing idea, which provides goods or services to customers. This means that a businessman is a market player. Someone who has looked over the current market and sees that an existing idea is doing well.

Not everyone can see this kind of things. And this makes the difference.

When others do not see the opportunity it is easier to create a business around it.

Accordingly, what a businessman usually does is that he or she creates a new business designed to capitalize on the current trend.

The business idea does not need to be a revolutionary thing here.

For example, a businessman may set up a delivery service, providing fast delivery of items in a community, state, or even nationwide. The idea already exists, so the potential can be calculated using conventional means.

A businessman, in this case, can calculate the potential for their effort, including potential profits and expenses. Once this has been done the businessman might then launch his/her business with the primary goal being to take advantage of an existing market.


Characteristics of a Businessman


There is no specific set of businessman characteristics. Throughout the business life cycle an average businessman applies a wide range of different abilities and skills to keep the business going.

Therefore, any businessman characteristics we might think of would be just too wide. But, as always there are some cornerstone qualities that all businessmen have in common.

Thus, businessmen usually have a strong drive to succeed with the focus on the long term. Instead of quick, extreme success, it is more like taking one step at a time.

While risk is always present, it is minimized as much as possible. This is usually done through careful planning, attention to details, and focus on daily or weekly goals.

A businessman may not dream as big as an entrepreneur in terms of taking their company to the top, but they are interested in long-term success, in building a business that is around for the next generations to run.

Among all others, here are the most important characteristics of a businessman:

• Business intelligence
• Financial intelligence
• Pragmatism
• Analytical skills
• Strong communication and negotiation skills
• Persistence
• Stress resistance
• Leadership
• Ethics

The listed qualities are those that most of the businessmen share. Even so, as every businessman is different – so is their unique set of characteristics.



What is an Entrepreneur?


According to Cambridge Dictionary: someone who makes money by starting their own business, especially when this involves seeing a new opportunity and taking risks is the entrepreneur.


An entrepreneur is someone who comes up with an idea for a product or service and puts that out to the market. All the risk and uncertainty are weighted on the entrepreneur as the new company is created.

Entrepreneur is the person who leads the company they create. If successful, the entrepreneur will be seen as the creator or originator of the product or service that they are marketing.

An entrepreneur is an impersonation of the business idea and business around it.

People like Jeff Bezos of Amazon or Bill Gates of Microsoft are considered entrepreneurs who are now businessmen running the companies they started.


What makes someone an Entrepreneur?


An entrepreneur is a person who thinks in big terms built around taking their efforts as far as possible. Fast growth is the centerpiece to their strategy because they want to make the most out of their idea.

Entrepreneur are less concerned about the little details. They instead focus on the big picture. The objective is success and growth out of the gates.

Thus, there is also a great deal of drive associated with an entrepreneur.

Perhaps the most telling characteristic is that entrepreneurs embrace risk and take bigger chances to reach their goals. Every entrepreneur is willing to risk failure, even spectacular failure, to succeed.

This means that when they believe in an idea, they are willing to roll the dice and take chances.

Unlike a businessman an entrepreneur does not take the business they run as a lifetime project (if they do they turn to be businessmen).

Usually, they are striving to make the most out of the opportunity before moving on to the next challenge. This creates so-called serial entrepreneurs.

Generally, the combination of three factors is what makes someone an entrepreneur.

These three factors are:

1. unique business idea;
2. high risk;
3. and rapid growth.


Businessman vs Entrepreneur: Difference Between Entrepreneur and Businessman


From the definitions provided above, it may seem that differences between entrepreneurs and businessmen are minor. Or they are at least pretty straightforward. After all, many entrepreneurs eventually become businessmen (in the best scenario) and vice versa.

But that’s not always the case.

If we look deeper, the contrast is stark and it helps to explain why exactly these two occupations are different.


Reasons for Starting a Business


Arguably, the most important difference is the reason entrepreneurs and businessmen start a company.

A businessman will see an existing idea that is flourishing and open up a new business to take advantage of the existing market.

An entrepreneur will have an original idea on a product or service that does not exist and create a business around it.

To put this in simple words a businessman builds a company around an opportunity while an entrepreneur builds a company based on an idea.

Businessman builds a company around an opportunity while an entrepreneur builds a company based on an idea. Click To Tweet

This simple difference is perhaps the biggest distinguishing factor between the two concepts.

However, being an entrepreneur or a businessman is not a permanent condition. This might change depending on person and circumstances.

Here are some of the possible scenarios:

  • Entrepreneur turns to businessman when his business idea does not work and he switches to the proven business opportunity instead. In this case, he stops being an entrepreneur and becomes a businessman;
  • Entrepreneur turns to a businessman when his business idea is successful and along the way he learns to operate the company as a businessman – finding and utilizing business opportunities.
  • Businessman becomes an entrepreneur when during the normal course of business he comes up with an idea that turns on a bulb in his head.
  • Entrepreneur might be working on standard business opportunities as a businessman before, after and between working on a unique business idea(s).


Competition Level


Another difference between both professions is the competition level. A businessman would usually expect to face high competition in selling a product or service that has big potential.

This happens because other business people can see it as well.

High demand leads to higher competition.

This makes separating a business from the rest difficult. However, high demand at the same time means that there is real potential for some success if the businessman can market effectively.

Conversely, because the product or service does not yet exist, an entrepreneur usually has no competition.

The immediate benefit is that the business started by an entrepreneur does not have to separate itself from anyone or worry about competition at least at the beginning.

Even if the idea leads to a successful business afterwards and other business people create companies to compete, the entrepreneur is still ahead of the game.

However, the main issue faced by the entrepreneur is the lack of an established product or service, which means that the demand level will simply not be known for a while.

It’s possible that the effort may be wildly successful or become a monumental failure. There is no guaranteed way to know until it is marketed to the public.


Application of Methods


Another substantial difference is how each professional markets their goods or services.

A businessman becomes a market player, winding their company through the established industry, taking advantage of trends and trying to avoid pitfalls.

An entrepreneur becomes a market leader since they are introducing a new product or service.

This means that instead of reacting to the changes around them, they are proactive in how they market what they are offering to the public.


Risk Levels


You may think because an entrepreneur has no competition that the risk factor should be smaller than what the businessman faces. The truth is that because the entrepreneur is promoting a product or service with no history, they are shouldering a much greater risk in terms of success for their efforts.

Even the Cambridge Dictionary (above) highlights the existence of high risk for entrepreneur and omits this for a businessman.

All the research and all the gut feeling are no substitute for having a proven track record.

This is why the businessman faces less of a risk. The most of the factors that might prevent their success are usually obvious. The product or service itself is proven and known. So the risk can be better calculated even if the competition is fierce.

While a businessman enjoys a steadier, less risky adventure the entrepreneur may face greater challenges, but also greater rewards.

In conclusion, a businessman is simply any person engaged in operating the business. While to be called an entrepreneur you usually need at least two more components involved – high risk and unique business idea/approach.

Accordingly, not all businessmen are entrepreneurs. But all entrepreneurs are also businessmen (even if they don’t want to be). In other words, an entrepreneur is the innovative and creative type of businessman.

In practice an entrepreneur is someone who started, founded or otherwise initiated a business. This usually includes startup and company founders.

In either case, the businessmen are the larger grouping that encompasses the smaller group of entrepreneurs.


Read also: Difference Between Firm and Company



Entrepreneur vs Businessman: Key Differences


Here is the comparative table to visually demonstrate the key differences between entrepreneur and businessman:

Runs a businessRuns a business
Profit orientedConsumer oriented
Prefers to play safeTolerates higher risk levels
No new business ideaNew business idea
Hard workingHard working
Focused on profitFocused on profit and novelty



Entrepreneurship vs Business


The above analysis brings us to the adjacent question about the difference between business and entrepreneurship.

if a businessman is something different from an entrepreneur then is business also something different than entrepreneurship?

Well, yes and no.

No, because there is not that much difference between entrepreneurship and business compared to the difference between entrepreneur and businessman.

The words “entrepreneurship” and “business” are being used interchangeably in a more active way compared “entrepreneur” and “businessman” (particularly in everyday life and media).

There is not much difference observed between them except for maybe only the linguistic component.

Nevertheless, in some contexts, the entrepreneurship and business might still differ.

For example, some people make a distinction as follows:

  • Business is about selling goods/service to the general public.
  • Entrepreneurship is also about selling goods/service to the general public. But these goods/services must be associated with bringing a new idea/innovation to the market.

So, basically the most prominent aspect here is the presence of novelty and innovation.

Not all businesses have these qualities.

On top of that, business has a lot to do with knowing how to run a business.

Entrepreneurship instead has more to do with knowing how to start a business.

The roots of the word “entrepreneur” signal about this. It comes from the French word “Entreprendre” which means, “to take on”. (e.g. “taking the steps to make it happen”). Which is different from managing a business that is already up and running.

However, this is more about the linguistic part.

The simple answer, in this case, would probably be yes.

Entrepreneurship and business are indeed different. But not much. The difference between them lays more or less in the same place as it is in case of businessman vs entrepreneur: unique idea or approach, risk, and rapid growth.


Entrepreneur vs Business Owner: Is the Business Owner also an Entrepreneur?


Business owner is everyone who owns a business. However, not every business owner is an entrepreneur.

This depends on the business itself and the mindset of the owner.

There are some factors that need to be taken into account while making a difference between entrepreneur and business owner:


Sentiment vs. Scale


You’ve probably seen the Mom and Pop shops in your community. The businesses that have been around a long time under one owner.

You’ve probably seen generations of the same family running the business that their parents or grandparents started.

This is because small business owners are sentimental about what they have created. They want to see it last.

An entrepreneur is far more interested in making their business as big as possible.

They are usually not looking to stay in the same business for long, so they create their companies to run on their own. While many will make their businesses as large as possible before selling, that is not always the goal.

However, it is true that the sentimental attachment is far less for entrepreneurs compared to small business owners.


Needs vs. Big Ideas


Perhaps the biggest difference between the two is that the small business is generally based on fulfilling a need in the particular community (e.g. local coffee shop).

Accordingly, the small business owner understands their target market, what makes their customers happy, and direct their efforts at solving a problem.

Entrepreneurs on contrary think big.

They dream big, and they build their businesses on ideas that haven’t been tested. But if proven to work these ideas might serve the far bigger community.


Weekly vs. Yearly Planning


While both will plan ahead, a small business owner is more likely to focus on the day-to-day details. This means that they look at projects that need to be finished by the end of the week (or month) to help keep their business rolling.

Entrepreneurs generally think much further ahead, such as six months to a year out.

They may look at what is happening now, but their thoughts are more along the lines of how their business will explode over the next several months.

These factors, however, do not exclude the possibility for a small business owner turn to an entrepreneur one day scaling up their local small business.

In contrast, an entrepreneur is less likely to become a small business owner.




As a summary, the difference between entrepreneur and businessman in the end depends on the perspective, context, and language.

Accordingly, this can widely vary from person to person and from organization to organization.

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