What's the Difference Between an Entrepreneur and a Businessman?

A lot of people are unsure what the difference is and I thought I’d take a minute and add my thoughts. It’s an important question and needs to be understood by anyone who is thinking about going into their own business.

An entrepreneur is someone who creates a business from their own unique idea and makes it work. Being an entrepreneur is more difficult because he has to identify a target market, build a unique brand that speaks to them and establish a marketing platform that reaches them with information and products that they want. This is customer focused.

The personality of an entrepreneur is that of an artist. Establishing a new business from a fresh idea is a creative process. Frequently, entrepreneurs are uncomfortable with routines and probably are not the best administrators although they can do it if forced to by the situation. Entrepreneurs enjoy the process of creating a flourishing business as much as the results.

A businessman is someone who starts a business on an existing market platform. Someone else has already come up with the successful idea. It’s just being repeated with little innovation. If it works, don’t mess with it.

The personality of a good businessman is that of a good administrator. He’s great at the daily routine of running a business. He’s usually driven by the goal of making money and the routine is important. 

Routine is the basis of efficiency in management. It also makes it easier to evaluate the profitability and condition of the business through analysis and projection of the financial statements. Investors love businessmen!

A great example of people who fit these two descriptions can be found at McDonald Restaurants.

The original McDonald brothers were businessman. Their goal was to make a decent living by selling hamburgers and shakes. They were astute enough to streamline it so that it became a very efficient operation and that made them lots of money.

Ray Kroc was a salesman who made his living by selling milkshake machines. He was fascinated by the large number of machines that the McDonalds were buying and wanted to know why?

When he talked to them he realized they had a great system that was more efficient than any of their competitors but they weren’t taking advantage of the potential. They just liked making hamburgers and eventually wanted to sell the business, retire and live on the proceeds.

Ray was an entrepreneur. A light bulb went on in his head! He saw what they were doing and quickly made them an offer which they couldn’t refuse. He took his idea and their business and made billions.

He franchised new restaurants with extremely favorable terms and owned the land they sat on. He would tell people he wasn’t in the hamburger business; he was in the land development business.

He created an empire on an idea and an opportunity. He kept doing what he loved and hired administrators to run the day to day business.

Ray stayed ahead of his competition through understanding his market, building a brand and giving the people what they want with great efficiency and consistency. And, he sold a lot of franchises!

He did what all great entrepreneurs do. He looked for and saw an opportunity which triggered an inspired new idea which he used to build his perfect business.