Distinguishing the Entrepreneur From The Manager

The terms Entrepreneur and Manager may sound similar but they are actually two different roles. For some companies, only one person plays both roles where the Entrepreneur also acts as the Manager. In other businesses, the Entrepreneur hires a Manager to run his company for him.

In order to give a clearer distinction between these two positions, allow me to highlight some points.

The Main Differences

The Entrepreneur is the owner of the business; therefore he bears all the uncertainties and risks involved in operating the organization; while the Manager is a hired employee and does not face any direct risk.

The objective of the Entrepreneur is to create and innovate business ideas. The Manager puts these ideas into action and implements the plans.

The Entrepreneur starts a business venture for profit and has a personal stake in it. The Manager provides his services to run an enterprise that is owned and established by someone else.

The Entrepreneur’s income is more uncertain because it is contingent on the performance of the business. On the other hand, the Manager, being a hired employee, can expect a fixed monthly salary because his compensation is not dependent on the performance of the organization.

The Entrepreneur is not faced with an option to misbehave at work because he has personal interests in the business; while the Manager may cheat by not giving his best at work because his income is not determined by the company’s performance.

Being the company owner, the Entrepreneur is not necessarily required to have certain educational qualifications or specific qualities like innovative thinking, high accomplishments, risk-bearing abilities and forethought, although all these are very important for an entrepreneurial mindset. As for the Manager, it is mandatory for him to be educated in the fields of management theories and practice.

The Entrepreneur may commit mistakes or fail and be responsible to no one but himself. However, the Manager makes every effort not to make mistakes. As much as he can, he will try to postpone failures.

Most often, the Entrepreneur has limited experience and knowledge and therefore his perspective of certain business practices may be narrow. On the contrary, the typical Manager streamlines the organization with professionalism and brings invaluable fresh ideas, perspectives and approaches to troubleshooting and problem solving.

Unless he transfers the ownership of the business to someone else, the Entrepreneur is not at a risk of losing his position in the company; but the Manager may be fired and lose his job if the Big Boss is not impressed by his management performance.

To sum these all up – In a company, the Entrepreneur can be the Manager, but the Manager cannot be the Entrepreneur. The Entrepreneur is passionate about developing and innovating business concepts in order to put his organization to a higher level. He has a choice to employ a Manager in order to perform some of his roles and functions like goal setting, policies and rules, etc. But even with such arrangement of duties, the Manager cannot replace the Entrepreneur because the Manager has to perform in accordance to the guidelines set by the Entrepreneur.

Both the roles of the Entrepreneur and Manager are very important in running a business as they create the “culture” in the workplace. If the leaders are excellent, they can model such excellence to their team. A good leader should not require his subordinates to be something that he himself is not.

Understanding these distinctions will be very helpful in starting a business or in streamlining an existing company. There may be other points of difference for these two roles but these are the main ones.