Carla Solo, April 12, 2018
(Photo Source: Buddy Mantra)
I decided to write some articles that could teach my readers about subjects or topics they wanted to learn. Please look out for my Education Series, as I will be posting more articles in this category in the future. What better than to pass on information that could be valuable to a learner? By learner, I don’t necessarily mean a student, but anyone who is willing or passionate to learn something new. I am qualified to teach various subjects in further education, so sit back, relax and enjoy the topics. Today, I want to go back to basics, and explore the question: What is an entrepreneur?
(Photo Source: Northglen News)
To answer this question, we must first distinguish between an entrepreneur and a business owner. All entrepreneurs are business owners, but not all business owners are entrepreneurs. This may be a subjective opinion, but from my experience, entrepreneurs have the creativity and vision that regular business owners seem to lack. Let’s take a look at an example. A person decides to set up a convenience store to support themselves and their family. Is this person an entrepreneur? Most likely not. This person is a business owner with 1 vision only, to work and support their family. Let’s take a look at another example. A person joins a company like ACN, Kleeneze, or Avon. They work hard in their spare time, and they own a proportion of the sales they make. Is this person an entrepreneur? Well, I would say this person is very motivated and determined to make sales. I would call them self-employed, because they are responsible for their own business accounts and paying their own taxes. I would even call them a (partial) business owner, because they earn a proportion of the sales they make and do their own accounts, but I wouldn’t necessarily say he or she is an entrepreneur. Why? Because they sell products created by other people, and work under their organisation policies. Now don’t get me wrong, you could sell products created by other people and still be an entrepreneur, but if the business idea wasn’t yours to begin with, you’re probably not an entrepreneur. Now let’s take a look at a case study of someone who is an entrepreneur.
(Photo Source: London Loves Business)
Richard Reed is a British entrepreneur, who started a smoothie and drinks company called Innocent Drinks in 1998, alongside other entrepreneurs. They started selling this drink on a market stall, and after some years, their brand came to be the most popular smoothie brand in Europe. They had vision from the start, and gave up their 40K salary jobs to launch this business. In 2013, they sold their drinks range to the Coca-cola company.
Richard Reed is an entrepreneur, because he was one of the original founders of the company, because he was involved in creating the business idea, because he took on the risks of the company, and because he had a long-term creative vision for the company. Entrepreneurs are much more creative than regular business owners.
So what is my definition of an entrepreneur? A founder of a business, who assumes the risks of the business, and has a unique business idea or a set of ideas, with creative vision for the future of their business. The entrepreneur often has an ambitious incentive for business growth from the start.
What is a business owner? A person who owns a business or more. This person also assumes the risks of the business.
What is a freelancer? A freelancer is a self-employed specialist worker e.g. writer, designer, travel agent, private tutor, social worker, cab driver etc. who owns a micro business. This micro business contains only 1 person, this being themselves. The person who owns this business is responsible for their own business accounts and taxes, just like all business owners. Some freelancers work from home, or on-site, and some may even have their own office or business premises, depending on how successful they are. Freelancers often work with external companies, or have their own customers. Freelancers also assume the risks of their business.
What is a self-employed person? All entrepreneurs, business owners, and freelancers are self-employed. This is a general term to describe anyone who starts their own business or more. It is most often used to describe a 1 person business for tax purposes, and most commonly used interchangeably with the word freelancer. However, anyone who employs themselves is self-employed, regardless of the size of the business. A person of working age is categorically either employed, self-employed, unemployed, a home maker, or a student. Therefore, all business owners are self-employed, because no one else has employed them.
What is a proprietor?
A proprietor is the owner of a business who also owns the business property. For example; some one who sets up their own shop, and also owns the business premises.
Is there a difference between a business owner and a self-employed person? No, all business owners are self-employed, and all-self employed people are business owners, regardless of how small or large the business is. These terms can be used interchangeably. However, the term self-employed is most often used to describe a 1 person business. For taxes purposes, a self-employed person is known as a sole proprietor. Whereas, a person who hires other people is known as a small business owner etc.
What is a trader?
A person who buys and sells products and/or services, this may be for their own business, or on behalf of another person or business. They may even buy and sell currency or shares.
What is a shareholder?
A person who owns shares in a company, but is not responsible for running the business.
Is a shareholder a business owner?
Technically yes, a shareholder partially owns a business, but they do not possess the same ownership rights that most business owners do.
(Photo Source: Better Life Training)