5 Key Areas of difference between entrepreneur and businessman

Difference between entrepreneur and businessman: What are the differences between entrepreneur and businessman? Although these terms are used interchangeably, they have subtle differences. I have captured these differences in the image below. Another point of distinction to consider is the difference between an intrapreneur and entrepreneur. These differences help us to identify and relate to the type of challenges as a business founder. The picture below represents a snapshot of these differences between an entrepreneur and businessman.

Difference between entrepreneur and businessman

This table summarises the difference between entrepreneur and businessman. We will explain these areas in detail further along the article. This section only highlights a summary view of major categories of differences between them.

Entrepreneurship in general is used synonymously with innovation, minimum viable products and funding etc. Business on the other hand refers to a wider area including expansion of existing business, geographical expansion, etc. Although I can argue that this definition of entrepreneurship is more aligned to a startup as opposed to an entrepreneur. Read more about the difference between entrepreneur and startup here.

Area	Businessman	Entrepreneur
Meaning and definition	The existing idea, product and services	New ideas, products and services
Areas of focus	Profit and Growth. Since the direction of travel is known – predictable areas	Idea development, validation of product/services
Competition	High and visible since attacking an already present business model	Low and less visible: With their agility entrepreneurs will be able to change based on demand
Risk	Risks are relatively lower since business models are proven	High risks since the market haven’t been validated yet
Market	Existing market, known areas and route to market	To be explored – identify and test the right product/market fit

Definition of Entrepreneur Vs Businessman

Let’s start with the difference between entrepreneur and businessman with basic definitions. I believe these definitions provide a huge insight into the purpose of these two variants and their focus.

Definition of Entrepreneur

An entrepreneur is derived from the word Entreprende meaning to take a risk. An entrepreneur is a person starting something new. This usually takes the shape of a business. By nature of entrepreneurship, most new ventures take the shape of new ideas, products or services in the market. The biggest dream of entrepreneurs is to disrupt the market, improve the quality of services and become a household name. The ultimate status of an entrepreneur is to be a unicorn business.

Meaning of Businessman

A businessman is someone working in commerce, at an executive level. It is a common misconception to think that a businessman refers to the business owner. Anyone who is employed in a business working at the executive, or managerial level and can impact a business can be referred to as a businessman. In the long run, an entrepreneur turns into a businessman.

A good way to differentiate the two is – an entrepreneur can be considered an individual in the early stages of being a businessman. Business generally refers to mature stages of existence whereas entrepreneurship is at its start.

Similarities between Entrepreneur and Businessman

Although different, there are several common factors between entrepreneurs and businessmen. They’re both key decision-makers in building a company. They display common traits that are required for an entrepreneur. Some similarities between entrepreneurs and businessman are:

• Need of managerial, team building skills to develop a vision
• Ability to express and communicate their needs.
• Adaptability to react to market requirements
• Strategic skills to think beyond limitations
• Good understanding of the market
• Desire to understand the key pain points for a customer
• Risk-taking nature and patience

These skills are commonly present between both entrepreneurs and businessmen. However, they’re not comprehensive to achieve success. Most people romanticise the journey of creating a successful business. But reality is complex and faced with numerous challenges for founders.

Difference between entrepreneur and businessman

The section below talks about the differences between an entrepreneur and a businessman. I have divided this section into a few sections to provide clarity on the focus, delivery and strategy of entrepreneur vs businessman.

Areas of Focus in the business vs startup

The difference between entrepreneur and businessman is more dominant in areas of focus. Entrepreneurs focus on creating ideas, and innovation. A business on the other hand is focused on enhancing the current profits, incremental improvement of the product, etc. These characteristics can be seen prominently in small businesses where the focus on expansion and generating revenue is high. A startup however is more risk prone and experiments with new ideas or products in the market.

Also, an entrepreneur operates in a new market whereas a small business can either be in the existing or new markets. Small business has information and a better idea of the market. i,e the business is in an advantageous position compared to an entrepreneur. You can leverage the market knowledge to develop and reach customers quickly. This doesn’t occur so easily with new entrepreneurship or startups.

The market for Entrepreneur and Businessman

Entrepreneur: The market is unknown for an entrepreneur. Market demands are volatile and can change quickly. Your biggest benefit as an entrepreneur is in your ability to react swiftly. A businessman can’t do that as effectively. Agility can be your most powerful friend to pivot the business plan for success.

Businessman: A businessman already knows the market. They have the advantage of an existing customer base. Although expansion requires effort, your risks are tempered. You can leverage your existing product/contacts to build with lesser risk. An entrepreneur however can’t afford that luxury.