Small business owner and entrepreneur: what’s the difference? Although sometimes it’s nuanced and there is some overlap, the difference is distinctive. Here is what distinguishes these two related business terms.

 

Small business owners are found in every town and city. For example, a barbershop and a bakery could both be considered small businesses. The products and services are already established. People know what bread and haircuts are already.

 

The risks are also already known. Maybe the barber has to worry about the barber in the next city and fears a price war. Or the bakery has to be concerned about the rising cost of the real estate lease.

 

Small business owners often use more manual talents than entrepreneurs. They often have to work many hours and there is limited upside to business expansion and net worth. You probably won’t find a barber sailing his megayacht in Monaco. The business often doesn’t scale well. It’s the quintessential “Mom-and-pop” operation with maybe a few locations at most.

 

An entrepreneur is also technically a business owner. Examples could be Tesla’s Elon Musk or Twitter’s Jack Dorsey. A big difference is that their products are new innovative offerings to the market. Before Tesla, there were few quality mass-market electric vehicles. Twitter was remarkably different from competing social media networks when it launched.

 

The risks are unknown with entrepreneurship. Musk has to worry about everything from what BMW is planning to do to the price of lithium (for the batteries). Twitter has to worry about how to properly monetize and government regulation.

 

Entrepreneurs use their high-level cognitive skills more than small business owners. They often scale well. Tesla has billions of dollars in revenue and tens of thousands of employees. Meanwhile, a small business owner might be able to expand to a few locations.

 

While entrepreneurs might work many hours in the beginning, they’ll often be able to take the occasional vacation. After a while, they sometimes can step aside, like what Amazon’s Jeff Bezos is doing.

 

The upside is also very different. At $197 billion, Elon Musk is the richest man in the world. A very successful small business owner with several locations might reach low 7 figures.

 

The difference between small business owners and entrepreneurs is distinctive. You can find small business owners in every town while entrepreneurs have a much greater chance of reaching the national spotlight.