Slowing Economy. Workforces being cut back. “Been there, done that, got the T-Shirt.”

And as always, some people will step off the corporate treadmill to “be their own boss.”

They’re moving from side gig to main gig, buying a business or a franchise, or finally creating that product or service that they’ve dreamed about for years.

The words entrepreneur and business owner have come to be used almost interchangeably. After 20 years of providing business and leadership coaching services to the SMB sector, I’ve seen that they pretty clearly should not be used that way!

This subject has a lot of angles to examine, so I will be tackling them one by one in my next few posts. The first topic speaks to just one of the reasons why an entrepreneur and a business owner are not one and the same.

Innovation and Risk-taking

We all need to do it...but it’s a matter of degree and emphasis.

Think about entrepreneurs, innovation and risk-taking. Do you think of entrepreneurs as having their pictures in the dictionary next to those words? We’re all familiar with the stories of successful entrepreneurs. It can be Henry Ford with automobiles, ranging to Steve Jobs with personal computing, communication, and entertainment. Their stories are ones of being drawn to new, untested ideas and pursuing them in the face of higher risk of failure. They are often visionaries who disrupt existing markets (as in Uber and VRBO) or who create entirely new and innovative products and services. Some are really famous. There are also many who never get to be as famous, but do create new products and services, and ways of delivering them, and build great local organizations.

There are also many more who end up not succeeding, and ultimately returning to employment with some other organization.

Business owners typically don’t have quite the risk tolerance and innovativeness that pure entrepreneurs possess. They typically either buy, or start, businesses that have an established market, with established products/services, and resolve to “do a better job” than the people and businesses with whom they compete. While risk and innovation play a part in their success, it’s not the “blank canvas” that entrepreneurs create on. The reward for developing and growing on an established path is that there are known goals pointing out a route to success, and fewer surprises.

And yes, there are MANY failures.

Why do these distinctions matter? Because going down the “wrong path” can not only be challenging...it can cost time and money that isn’t there to be lost. If you doubt that, do some search activity around the average lifespan of a new business venture.

I’ll talk about the role of psychology and personality in success in later posts. Just know that setting the right context for yourself, knowing whether you are an entrepreneur or a business owner, and have the mindset of one or the other, can have a huge impact on your success. And knowing your traits around Risk-taking and Innovativeness are an essential first step.

That’s it for now. More comparison and contrast are to come on the differences between Entrepreneurs and Business Owners. Let me know what your thoughts are on the topic!