Businesses run their business for the primary purpose of making profits. Entrepreneurs intend to make profits but with the purpose of making a difference. They want to change their world by addressing a problem they become aware of. They are passionate about providing unique solutions for problems in the community and typically have creative ideas that they’re not afraid to take risks with to achieve their goals.
Businesses typically follow a linear path, while entrepreneurs zigzag their way toward success. Entrepreneurial efforts are proactive, opportunistic, focused on growth, dynamic, and flexible. Businesses conform to society, while entrepreneurs challenge it. Our world needs businesses but also entrepreneurs to keep pushing boundaries, develop new ideas, and create change.
The difference between entrepreneurial and business boils down to this:
- Intent
- Focus
- Risk
While businesses might provide products or services that improve our lives, they do so within the confines of what is already established. On the other hand, entrepreneurs are focused on coming up with new ideas and solutions that can change things for the greater good.
Is everyone who runs a business always an entrepreneur?
No, of course not. Although today’s entrepreneur has become almost synonymous with “business owner,” the reality is that there are many business owners who are not entrepreneurs — they are not pursuing a “new idea.” Entrepreneurs and business owners face significantly different issues.
The term “entrepreneurial firm” is often used interchangeably with “small business,” but there are some essential differences between the two. First, small businesses are usually defined as companies with fewer than 500 employees, while entrepreneurial firms can be any size.
In addition, small businesses are often family-owned or privately held, while entrepreneurial firms can be public or private. Lastly, small businesses typically have a more traditional business model, while entrepreneurial firms are more likely to be disruptive and innovative.
What are entrepreneurial firms?
If an entrepreneur is someone who identifies and seizes opportunities, then an entrepreneurial firm is one that systematically seeks out and exploits new opportunities. This definition implies several things about entrepreneurial firms.
While there is no single formula for success, entrepreneurial firms typically share some common characteristics. They are proactive, opportunistic, focused on growth, dynamic, and flexible. They are also usually small or medium-sized businesses with a commitment to innovation.
First, they are proactive; they don’t wait for opportunities to come to them but instead actively search for them. For example, a company always looking for new technologies to develop or new markets to enter is likely to be more entrepreneurial than one that relies on its existing products and markets.
Second, entrepreneurial firms are opportunistic; they take advantage of opportunities as they arise rather than sticking rigidly to a pre-determined plan. This means they are often willing to take risks and experiment, leading to innovation.
Third, entrepreneurial firms focus on growth; they want to expand their businesses and increase their profits. This means they are often willing to invest in new products, processes, or services, even if there is some uncertainty about the outcome.
Fourth, entrepreneurial firms are typically small or medium-sized; they are usually too small to have dedicated research and development departments and too new to have established brand recognition.
Finally, entrepreneurial firms tend to be dynamic and flexible; they always look for new ways to do things and quickly adapt to change. This means they can be very responsive to customer needs and market trends.
While all entrepreneurial firms are different, they all share one common goal: to grow and succeed. To do this, they must be willing to take risks, seize opportunities, and be innovative in their approach.
What is the difference between an entrepreneurial firm and a business?
As we have already come to understand, small businesses usually deal with known and established products and services, while entrepreneurial ventures focus on new, innovative offerings. Because of this, small business owners tend to deal with known risks, and entrepreneurs face unknown risks.
In general, businesses are risk-averse, while entrepreneurs are risk-takers. Businesses focus on incremental change, while entrepreneurs pursue radical change. Businesses seek to exploit existing opportunities, while entrepreneurs seek to create new ones. Lastly, businesses are usually local, while entrepreneurs have global aspirations.
There are several key differences between entrepreneurial firms and businesses. Entrepreneurial firms are proactive, opportunistic, focused on growth, dynamic, and flexible. They are also usually small or medium-sized businesses with a commitment to innovation. Businesses, on the other hand, are typically risk-averse, focused on incremental change, and exploit existing opportunities.
For example, I have a friend with an entrepreneurial communications firm focused on making an impact through words. Whether their clients need a simple message, a 1,000-word executive summary for their annual report, or an announcement about an award recently received. Their team of writers can and will fashion the kind of copy every company needs, to have its brand noticed.
They believe in what I always hoped my ex-husband would understand, “Words mean things!”. They are wordsmiths, and I love them for it. Whether we’re communicating in a relationship or helping other small businesses find their voice and reach their market, carefully crafted and chosen words are essential in all areas of life.
This is their entrepreneurial difference: They focus on the power of words and how those words can make an impact – whether it’s in a personal relationship or for business purposes. They are constantly exploring new opportunities to help their clients communicate more effectively. And they are always looking for ways to grow their business and reach new markets.
When entrepreneurial businesses focus on incremental change, they are trying to improve upon an existing product or service. They might do this by making a new version of the product slightly better than the old one, offering the same product at a lower price, or carefully cultivating impactful content. On the other hand, when entrepreneurs pursue radical change, they are trying to create something entirely new. This could be a new product or service or a new way of doing business.
Another friend of mine has a visually creative business and was one of the first professional commercial photographers who did not do day rates like the rest of his colleagues but instead offered his clients “per image” pricing.
Which means they only pay for the images they want or have the budget for. If they did not like any of the images, or if time ran out, the photographer would shoot on another day until they are satisfied (within reason, of course). The images are cataloged on file for later purchase too. Additionally, this radical pricing change gave the power to the client and gave the photographer the incentive to produce better work. It was a total game changer in the industry, and many have followed his lead.
What is the difference between entrepreneurial and business?
In conclusion, I think this is the difference between being an entrepreneur and a business: entrepreneurial firms are always looking for new possibilities. They are proactive and opportunistic, focusing on expansion. They are also dynamic and adaptable, which implies they can modify their plans if necessary. In comparison, businesses tend to stick to well-trodden paths. They prefer low-risk situations instead of taking chances and are generally confined to one region, while entrepreneurs have global ambitions.