By Jennifer Shelton
Courtesy to The Bellingham Business Journal
When you hear the term “entrepreneur,” whom do you picture?
Is it the person working on their laptop at the local coffee shop, the person making the “big pitch” to investors, the person behind the counter of their own shop or the person making their own widgets and selling them online?
The general definition of entrepreneur is someone who organizes or operates a business. In my work through the Small Business Development Center, I’ve noticed that business owners fit into one of three categories: entrepreneur, small-business owner or self-employed.
Although one person can fit all three categories, there are some distinct differences between them.
The entrepreneur is commonly seen as an innovator of new ideas and business processes. Leadership, management ability and team building are essential qualities for an entrepreneur.
One example is Steve Jobs of Apple. He started out with an idea and turned it into a leading global company.
A self-employed person is defined as one who gets their income directly from a consumer rather than being the employee of a business.
Think of a massage therapist who operates as a solo practitioner. The amount of income the therapist generates is directly related to how many clients he or she is able to work with.
A small-business owner is someone who has a business entity and decision-making ability toward growing profits. The president of a “brick and mortar” retail store would be a good example.
The similarities are that all are running businesses and have direct influence on them. They all expect to generate an income from their businesses. They all know their industries and products or services well.
Some differences I see are in character traits and business goals.
Small-business owners want to “feed the family,” not necessarily become billionaires. They can work in a business, but are able to take time off and still generate income because of the systems or employees they have in place.
Self-employed people typically don’t have employees. Their income is limited because it depends on how many hours they personally can work in their businesses. They enjoy providing a service or product and are content with the jobs they have created for themselves.
Entrepreneurs are known for certain capabilities such as vision, optimism, risk tolerance, drive and persistence, negotiation, critical and creative thinking and recognizing opportunities. They are good at moving a business idea forward. Often, employees are called on to have more entrepreneurial thinking.
A small-business owner or someone that is self-employed can both be considered entrepreneurs. The main difference may be the desire and ability for growth.
The bottom line is that no matter where you fall in the spectrum, you make up the majority of our local and U.S. economies. We are thankful for your leadership and contribution to our community.
Jennifer Shelton is the director of the Small Business Development Center, part of Western Washington University. The SBDC is part of a nationwide network and provides no cost, confidential advising, technical assistance, and research to business owners and managers in an effort to help businesses thrive throughout Whatcom County.