Businessman and entrepreneur

A businessman is a market player whereas an entrepreneur is a market leader

Friday, 9 April 2021

Traditional businessmen will tend to adopt a “boss/manager” demeanour around their subordinates, being very corporate and formal in their approach in dealing with business-related matters. They rely heavily on the work force’s continued (and improving) performance, employ other managers, and have Standard Operating Procedures (SOP) to ensure that the company will run like a well-oiled machine. Their goal is to let their business run without much input from the top level management, to construct a self-sustainable ecosystem that generates a form of “passive income”.

It is a common assumption that businessman and entrepreneur are the same, but both words refer to a different individual possessing a distinct approach to business. To put it in other words, a businessman follows a set path engraved by some other person with an unoriginal idea, whereas an entrepreneur thinks and believes in making his own path with new ideas.

In the future, an entrepreneur can become a businessman. However, between businessman and entrepreneur, there is a thin line difference – a businessman is a market player whereas an entrepreneur is a market leader. 

 

Who is a businessman?

A businessman is an individual who operates or starts a business with the same old business idea. The businessman chooses to do business that is high in demand or give him maximum profits in return. The firm faces stiff competition because many companies already exist in the market having the same business ideas. However, the risk factor is very low as the concept has been tried and tested by other existing companies, so the chance of failure is low.

 

Who is an entrepreneur?

An entrepreneur is an individual who has an exclusive idea to initiate and establish a new venture and bring a change in the world. An entrepreneur is highly creative and innovative, takes a risk and endures the unpredictability of business. The business started by entrepreneurs with a new concept for the first time is known as start-up. The entrepreneur is an integral part of the operation, who builds and deploys the other functions of the operations i.e. labour, land, and capital. Later in the future, the entrepreneur becomes a businessman.

Entrepreneur and businessman are two terms widely used daily in the business world and, although they seem to be the same and are often used interchangeably, they are not. In fact, we could say that one is the evolution of the other. And is that the entrepreneur is one who has a business idea in his head and has to fight against the wind and tide to turn it into a successful business and the businessman is a person more experienced and with a high degree of responsibility as a team leader. But would you know how to distinguish between them? In the following points we tell you the five key differences between entrepreneur and a businessman.

 

1: Attitude and objective

One of the differences between an entrepreneur and a businessman is their attitude. An entrepreneur focuses all his efforts on working to make his project successful, and doesn´t care about the hours he has to devote to develop a business idea, because of his enthusiasm. You could say that an entrepreneur gets carried away and his motivation is the conviction for the product or service he wants to create. 

On the other hand, a businessman aims to develop an increasingly stronger successful business. As a result, their attitude is focused on developing growth and expansion strategies, as well as on making decisions that continue to improve the company’s profitability.

 

2: Team and work

Likewise, an entrepreneur tends to be on his own in the face of danger, he carries out tasks alone and assumes the responsibility of both errors and successes. Although you can always find support from other entrepreneurs, the difference between the way an entrepreneur and the businessman work is that the former does not have a large support structure at his side. In any case, he has the help of a small group of likeminded people who have bet on his idea and try to develop it together.

On the contrary, a businessman coordinates and manages teams of professionals – bigger or smaller depending on the size of the company. As a result, the employer must establish functions, mark objectives and delegate responsibilities.

 

3: Location and workstation

Another of the differences between an entrepreneur and a businessman is that the first, in most cases, does not have a fixed location for his the company and is a nomad of business, while the second has facilities where he can go to carry out his daily activities. The shared work models such as co-working or Hot desk are the preferred options by entrepreneurs to start working on his business idea. However, a businessman needs wider spaces that combine areas of private offices with common and open areas to be able to promote relationships and team working between employees. In Lexington we have both types of work models to meet the needs of both profiles. Offices, personalised corporate headquarters, shared workspaces in business centres in Madrid and Barcelona  facilitate both entrepreneurs and businessmen with the most productive workspace.

 

4: Skill and experience

Following the main differences between these two profiles, the entrepreneur is characterised by having the ability to overcome any negative results and find quick solutions. He has the ability to readapt his work because it is based on obtaining an idea in which he firmly believes.

However, unlike entrepreneurs, businessmen have years of experience working in business and, therefore, design their strategies so that they can anticipate problems. Experience is always a good thing!

 

5: Action vs. reaction

Within the differences between entrepreneurs and businessmen, day-to-day mechanics are also important. The entrepreneur does everything in his project: Idea, design, execution and evaluation. On the other hand, a businessman is focused on controlling that all the machines parts run smoothly and has the task of representing the company in the major events. Their view and thoughts are always on market fluctuations and how the external environment is changing to be able to adapt the company to it.

Therefore, the entrepreneur is characterised by constantly executing actions in order to grow his business idea, while a businessman always goes further to see what actions will affect the company to be able to always react in time.

However, despite the differences between entrepreneurs and businessmen, both are needed. Because the entrepreneur is a key player in launching an idea and make it viable, while a businessman is fundamental to the growth a business once you have made it into the market.

More and more people have been using the terms “businessmen” and “entrepreneurs” interchangeably. Do they really mean the same thing? Are they really any different? Today, we will explore the differences between these two terms and try to gain a deeper understanding of what it means to be an entrepreneur.

Before diving into the topic, it is important to note that words do not define a person. Two people can be both called an entrepreneur, yet have wildly different viewpoints on how to conduct their respective businesses. Words are just labels that we attach ourselves to, an identity that we show to others.

However, knowing the differences between an entrepreneur and a businessman is a great opportunity to self-reflect on your own goals and evaluate your current position in the market. It serves as a reminder of what you are trying to achieve out of your business and where you plan to head towards.

However, according to Investopedia, an entrepreneur is an individual who founds and runs a small business, assuming all the risks and rewards of the venture. An entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services and business/or procedures.

Another great maxim about entrepreneurship is – all entrepreneurs are businessmen, but not all businessmen are entrepreneurs. An important point to note is that an entrepreneur brings new ideas to the table that can solve existing problems, both old and new, adding real value to the marketplace.

There is more to being an entrepreneur than a simple dictionary definition, however. The school of thought, business goals, management style, risk tolerance – all these qualities contribute to the identity of an entrepreneur. So today, we will explore the key differences between a businessman and an entrepreneur, and what these two subtly different mindsets can learn from each other’s philosophy.

 

Business goals

Most entrepreneurs are never content with the status quo. Their visions extend to more than just profits and losses or numbers on a financial statement. They aspire to make a difference in people’s lives and leave their mark on society. Building communities and relationships, creating innovative solutions, and empowering others are few of the many driving factors that push entrepreneurs beyond their comfort zone, aspiring to achieve greater success.

While entrepreneurs see the limitless possibilities and opportunities the marketplace has to offer, businessmen would rather focus their efforts on capitalising on existing markets. They adopt businesses that are tried and proven to be profitable and sustainable in the long term. Stability, consistent growth and reliability are their core driving factors when starting and running a company. There is no room for emotions when it comes to making major corporate decisions, and they will let the numbers and financial statements do the talking.

 

Risk tolerance

One signature trait of being an entrepreneur is their willingness to take on calculated risks. They are much more open to accepting larger and riskier investment opportunities, unconventional solutions to existing problems and experimentation with their products and services.

A traditional business owner, however, will generally take a much more conservative approach when tackling risks, adopting an “if it works, don’t fix it” approach. They are much more focused on keeping the business in the green or getting it there through conventional means rather than exposing themselves to unnecessary risks that may jeopardise their current standing.

 

Ideas

Why compete with existing industries, when you can create a whole new industry free of competition with high existing demand? From a whole new invention to improving existing products, entrepreneurs will think of new innovative ways to solve existing problems. They aim to integrate their products and services into the marketplace while co-existing with their close competitors instead of resisting and competing against them.

A traditional businessman, however, will generally adopt an existing idea or business model. Not because they are less creative, but because they are much more careful with their ideas, requiring heavy testing and prototyping before releasing their products into the marketplace. Some may prefer not to innovate at all, and that isn’t the handicap that it sounds like, depending on how you handle your business. The way they stand out amongst the competition is by meeting high standards in terms of pricing, execution and quality, and overall customer experiences and services.

 

Company role

Entrepreneurs take up the active leadership role in their company, taking hold of the business by the reins. Being the leader, they are active in the daily operations of their business, being hands-on in their approach and execution.

Entrepreneurs will lead the charge, inspiring employees to follow in their footsteps, manning the front while employees will provide support from the back. Entrepreneurs also tend to focus heavily on the social aspects of running a business, forging meaningful relationships between clients and amongst employees, building sustainable communities, and inspiring others to do the same.

 

Conclusion

In the end, the comparison between entrepreneurs and businessmen is nothing more than a point of reference. There are very few people who fully fit the descriptions above, and most people are more likely placed in a spectrum in between these two extremities. What is important is that you, as a business owner, are able to self-reflect and determine which work style is best for your own business.