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Entrepreneurs vs. Managers: What’s the big difference

What’s the difference between an entrepreneur and a manager? It’s never my intention to make this article controversial but I could help express my own view after witnessing a heated debate between my friends and the subject of the argument was “entrepreneurs vs. managers; which is more important to the process of building a business.” Though I am an entrepreneur to the core, it is never my intention to place a kind of supremacy of one over the other; I just want to highlight some fundamental differences between an entrepreneur and a manager and their relevance to the entrepreneurial process.

“When entrepreneurs and investors come together to pool resources, they form a team. When employees and self employed specialists come together to network, they form a union.” – Robert Kiyosaki

Sometimes, both of them are mistaken as being the same but they are not. However, both entrepreneurs and managers are needed for the growth of any business. One cannot do without the other. So without much ado, below are 12 differences between entrepreneurs and managers.

Entrepreneurs vs. Managers: What’s the big difference?

1. The Job of an Entrepreneur Begins Before Even the Business is Created

An entrepreneur will perceive an opportunity, assemble a team, locate resources for his new business idea, raise the needed capital and start the business while the manager comes in only after the foundation has been laid and the business established. What this mean in essence is that the job of a manager begins only after the entrepreneur has done the ground work. Without entrepreneurs, the managers will have no business to manage.

2. Entrepreneurs are more concerned with the launching and sustainability of a business in the face of uncertainty while managers are more concerned with the effective and efficient operation of an on-going business.

3. Managers are specialists; business management specialist to be precise. They are focused on managing and growing a business. On the other hand, entrepreneurs are generalist. They need to know a little about everything. An entrepreneur must know a little about product development and design, business law, accounting, communication and public speaking, investing, leadership, business systems, finance and insurance, marketing and sales, raising capital and so on. An entrepreneur’s cup must never be full.

“A cup that is full is useless.” – Chinese proverb

4. Entrepreneurs are street smarts; they learn  by trial and error, they learn from their own mistakes and the business mistakes of others. An entrepreneur starts with whatever is on ground and learns the hard way. That’s why most of the successful entrepreneurs of the world are school drop out billionaires. On the other hand, managers are thoroughly trained in school in the area of business management. That’s why they are refered to as MBAs. Entrepreneurs get their education from the streets.

“Business and financial intelligence are not picked up within the four walls of school. You pick them up on the streets. In school, you are taught how to manage other people’s money. On the streets, you are taught how to make money.” – Ajaero Tony Martins

5. Financial freedom is the utmost priority of entrepreneurs. Freedom to do what they want, freedom to live the kind of life they love and freedom to make a choice. To managers, security is the utmost priority. Security comes in the form of a steady paycheck, pension, gratuity, pay raises, job titles, promotions, bonuses and entitlements.

6. An entrepreneur owns the business; a manager is simply an employee that works in the entrepreneur’s business. In essence, a manager owns a job. A manager is paid to run the entrepreneur’s business.

7. The reward of entrepreneurs come in the form of capital gains, asset acquisition, cash flow, and dividend while the managers reward come in form of salaries, pay offs, promotion, job title, bonus and incentives.

8. Entrepreneurs thrive on risk and uncertainty. To entrepreneurs, risk and uncertainty are part of the game of entrepreneurship; risk is what makes the game exciting. Managers on the other hand are conservative and detest risk; they simply avoid it.

“Without the element of uncertainty, the bringing off of even, the greatest business triumph would be dull, routine and eminently unsatisfying.” – J. Paul Getty

“You must take risks, both with your own money or with borrowed money. Risk taking is essential to business growth.” – J. Paul Getty

9. Entrepreneurs see mistakes as an avenue to learn something; they learn more from their business mistakes. Managers avoid mistakes because it will cost them their job. Besides; that is why they are being paid; to avoid mistakes. That is where the word “professionalism” comes in.

10. When entrepreneurs come together to pool resources or network, they form a team but when managers who are usually employees come together to work towards a common goal, they form a union.

11. Entrepreneurs are primarily motivated by the need to build a business that solves a problem or provide a need, while providing them cash flow and freedom. Managers on the other hand are motivated by the next paycheck, bonus, incentive, pay off, job title and promotion.

12. Entrepreneurs are committed to the business from its inception till they achieve their goal. Managers on the other hand are committed till the next paycheck; delay or cut their paycheck and they are gone.

“I’m not afraid of turning 80 and I have lots of things to do. I don’t have time for dying.” – Ingvar Kamprad

As a final note; the successful entrepreneurs and business leaders of the business world are Henry Ford, Andrew Carnegie, Henry Ross Perot, Bill Gates, Oprah Winfrey, Larry Ellison and Aliko Dangote; the richest black man in the world. On the other hand, the renowned corporate managers of the business world are Alfred P. Sloan, Jack Welch and Lee Iacocca.


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